I disagree with those who believe that people can be trained to be entrepreneurs.
Scores of scholarly pieces have been written that claim that entrepreneurs are not born, but instead are trained to be good entrepreneurs. In fact I’d say that most of the pieces I’ve read on the question tend to side with nurture over nature when it comes to entrepreneurial success. After more than 20 years of working with entrepreneurs of all types, I’m coming to the conclusion that there are three layers of capabilities required to be successful: 1) business skills capabilities; 2) entrepreneurial empowerment beliefs and 3) the secret entrepreneurial energy. The last one is by far the most important of these.
Those who argue that smart people can become successful entrepreneurs by learning important entrepreneurial skills aren’t necessarily wrong, but they have things in the wrong order. Business skills such as learning how to manage a sales process, how to select good employees and how to create financial projections are important for running a business, but not for the cliff-leap of STARTING one. If you don’t first start one, your business skills won’t matter…except for supporting someone else’s venture. If you do start one, but don’t learn advanced business skills (or don’t hire someone with advanced business skills), your likelihood of success is diminished but not eliminated. As review: good business skills are important, but the secret energy of entrepreneurs is imperative. Moving on.
After many years on this planet, I’ve come to the conclusion that no one amounts to anything unless someone teaches them that they can amount to something. Countless, countless, countless people on planet earth have instincts, smarts and guts enough to become anything they want to become. However, if there is no one around you to tell you that you CAN do it, even though you’re a little afraid, you will never do it. People who are taught that “Failure might happen, but you can recover” or “Failure can happen, but you can try again” are the only ones who are NOT afraid to fail. I’ve made a lot of dinner-table speeches to my kids helping them understand how they can become whatever they want to become. They know it takes hard work to succeed at what they pursue. They’ve seen us sacrifice today for the things tomorrow brings. And I’ve seen some of their friends who, I believe, have never been taught that success is an option. If Mother/Father make it ok to be an entrepreneur…and allow what they teach…the business founder who has heard that message has a much greater chance of succeeding. I haven’t quite figured out how to work this into my due diligence when evaluating a client. But I’ve learned to look for it…and after several months, I know it is there or it is not.
Posession of business skills and the notion that entrepreneurial success is an option are important. But, possessing the secret entrepreneurial energy is the imperative, seminal ingredient. The secret entrepreneurial ingredient cannot be discovered under questioning alone. If I ask an entrepreneur the question “after 14 months of $0 sales when you expected $1.2 million in sales, can you continue to look your spouse in the eye”, I will not learn if that entrepreneur has “it” from his answer. I cannot expect an accurate answer in June, 2012 “if your business still has no investors in October, 2014, even though you will have 2nd-mortgaged your house, will you be tempted to take another job?” I could try a more direct question…”If you discover that your master plan sucks two years after you thought you’d retire, will you still battle on?” Or this: “How many “No’s” will you accept before a “Yes”? Or this: “Son, as your father, I beg you to give up this false hope and take the job with Uncle Joe.” How do you test for that? Exactly what “nature v. nurture” scholarly piece do you ascribe to that makes this an obvious investment decision? What answer will indicate “winner”? What answer will indicate “loser”?
I do not wish to leave my precious reader in suspense. My answer is that you cannot determine whether your prospect has the secret entrepreneurial energy from questioning alone. No southern-Cali-successful 12 week accelerator can successfully separate winner entrepreneurs from loser entrepreneurs. You have NOT uncovered the nature of the entrepreneur. The founder might give a wicked-awesome investor presentation on “Pitch Day”. The founder might have the perfect B-School pedigree-pitch-deck. The founder might believe he is the chosen-one, possibly fulfilling the two least important successful-entrepreneur characteristics. But will she dig deep? Will he sacrifice beyond reasonable American limits? Will the founder be selective in taking advice instead of chasing every suggestion that comes her way? Will that founder sacrifice when sacrifice seems ridiculous? If you are a seed stage investor with an Accelerator, Incubator, State Fund, Local Fund, Family Office, Angel Group or Venture Fund, and after a few months you observe the secret energy…please, please, please invest in that person. Put yourself out there with the founder. Be one with the energy that built this country and together, rebuild it.