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July 09 2010


Where Did We Go Right? How to Be a Successful Entrepreneur

Imagine a well-known Pulitzer Prize-winning journalist. Wanting to repeat his success, he scrutinizes all his articles and discovers they contain the letters "E" and "R" 10 times more frequently than any other letters. In his next article, he focuses on increasing the use of these letters, and then plans on teaching his new-found secret during his journalism seminar next fall.

More than likely, his success as a reporter is due to a combination of talent, hard work, circumstances, personal relationships and some luck. Which means that evangelizing the benefits of proper letter frequency is irrelevant at best and probably harmful to his journalism students.

Entrepreneurial Mortality

Successful entrepreneurs make this same mistake. New ventures are born every day and the sad fact is most die young. Yet the causes of startup death are predictable: Lack of cash, lack of funding, arriving too early or too late to market, insufficient experience or talent on the team, or just plain bad luck.

In a startup, you may not be able to avoid death, but at least you'll know what killed you. Triage is easy on a corpse; it's a lot harder to dissect a healthy Olympic athlete to understand what makes them a champion.

Entrepreneurs who experience failure usually have lots of time to ponder the question "Where did we go wrong?" in order to learn from and avoid making the same mistakes. It's much harder for them to figure out "Where did we go right?" so success can be repeated.

Success As Poison

Before becoming entrepreneur-in-residence at the Knight Center for Digital Media Entrepreneurship, I spent my career as a serial entrepreneur. I was surrounded by entrepreneurs who had worked on as many successes as failures. Some of these entrepreneurs are very well known and have achieved legendary status, while others are just starting to become the next generation's Steve Jobs, Bill Gates and Mark Zuckerberg. Failures, fizzles, flameouts and near misses are the norm -- and in Silicon Valley they are rites of passages for every entrepreneur.

Experience gained from failure is more valuable than an Ivy League M.B.A. and can serve as a passport for long-term success. Misinterpreting prior success factors can doom the entrepreneur, as well as infecting all other ventures they mentor. Yes, early success can be worse than failure -- just ask any child star.

Many entrepreneurs who taste success attribute it to their own intelligence, vision, creativity or business savvy. They ignore the critical influences of timing, circumstances and luck. In many cases I've seen people ignore an inheritance, an influential relative or a family name when they take stock of their success. This brush with success poisons future attempts.

Snake-Oil Success

Far more dangerous are former entrepreneurs who have one success to their credit and spend the rest of their career imparting (or worse, selling) their secret to wide-eyed aspiring entrepreneurs everywhere. The books and seminars shout, "Be like me! Use more E's and R's than your competition and you'll be successful."

Being an entrepreneur is often like driving a half-built race car 200 mph in a thick fog -- and not being sure if the steering wheel works. There are lots of voices in the crowd telling you which direction to drive, but who can you trust? Even if one of the voices belongs to an experienced racer, they have not been successful in these exact same circumstances -- so their advice could be fatal.

Success is Simple. It's Just not Easy

Mark Zuckerberg's path to success was different than Steve Jobs' path. They are different people with different backgrounds and situations, so trying to copy their path and methods is probably futile. A more reliable way is to look at the majority of success stories and find out what they had in common, and apply the lessons to your own situation.

Great entrepreneurial success often looks like a combination of luck, timing or brilliance -- or sometimes sheer genius -- but when you dissect it, there are really just two groups of entrepreneurial success factors:

1. Personal Factors:
  • Hard work and commitment
  • Sufficient intelligence
  • Interpersonal skills/relationships
  • Location and proximity to resources
2. Circumstantial Factors:
  • Economic and business situation
  • State of technology
  • Social trends
  • Customer wants/needs/behavior
  • Competition

When looking at these two groups, notice that all the personal factors are within your control, and the circumstantial factors are the same for every other entrepreneur. So what's the catch? The best entrepreneurs play to their strengths on the personal factors and develop a particular clarity on the circumstances and leverage them to their advantage. Most successful entrepreneurs actually have one key personal factor and one key circumstantial insight that makes all the difference in their success.

Now we can better understand what appears as luck, timing and brilliance:

  • "Luck" is when any of the personal or circumstantial factors are stronger without any extra effort. Recognize it, embrace it and use it -- but don't count on it.
  • "Timing" is when several circumstances are aligned with the entrepreneur's interests. Wait for it, recognize it and move fast when it happens.
  • "Brilliance" is when you are aware enough to take advantage of luck and timing.
  • "Genius" is when the entrepreneur overcomes the personal and anticipates the circumstantial.

Where Did You Go Right?

As an entrepreneur, what can you do to make these success factors work for you? First, take a look back on any success you've had in the past -- no matter how minor -- and ask, "What did I do right?" Think about which personal factors were your strengths, how you can use them again, and which personal traits need more work.

Next, take a look at the circumstances surrounding your prior success. Which of them were you able to foresee or even predict? Perhaps you have a special gift or insight in that area. Are you particularly observant as to customer needs, or can you understand technology or spot trends better than most? These are your success factors, and they don't come out of a bottle sold by someone else.

All entrepreneurs, and potential entrepreneurs, have the necessary success factors -- personal traits and circumstance. The key is being aware of which are your own relevant success factors, and which ones are someone else's snake oil.

Don't be the product, buy the product!