Entrepreneurial DNA
- 1. “All humans are entrepreneurs not because they should start companies but because the will to create is encoded in human DNA.” Reid Hoffman, co-founder LinkedIn Entrepreneurship is not for the faint hearted. Beyond the romanticized image of a visionary risk- taking innovator lies a harsher reality. Entrepreneurs dedicate every waking hour to their venture constantly battling against a system that often has a vested interest in their failure. They risk their wealth, health, reputation and relationships all the while knowing the statistics on start- up failure rates suggest the odds are stacked against them. Few get to realize their entrepreneurial ambitions. So what separates the failed entrepreneur from the successful? I believe it is the combination of strategic foresight and executional agility sparked with innovative resilience. All three of these critical building blocks of entrepreneur’s DNA are essential to the success of any entrepreneurial venture.
- 2. Strategic foresight – Seeing now what others think is absurd but later will consider obvious “If you had asked people what they wanted, they would have said a faster horse.” Henry Ford, Founder of Ford Motor Company Envision: Do you foresee critical trends and dynamics in your industry before your competitors? Entrepreneurs create opportunities by looking at the dynamics and trends of their industry through a critical lens. They exist to challenge the status quo and are unwilling to accept “this is how it’s always been done around here.” Entrepreneurs see “but {insert name of incumbent} does it this way” as the floor, and not the ceiling, of what is possible as they look to make what has come before them redundant and obsolete. Successful entrepreneurs not only home in on the key trends in their industry in a unique way but also pinpoint key opportunities faster than those around them. Pioneer: Can you translate these trends into a solution that is a significant improvement on what exists today? Entrepreneurs must be able to translate an opportunity into a tangible solution that is a significant improvement on the status quo. A common myth about entrepreneurship is that the idea has to be a brand new “eureka!” moment. The iPod was not the first digital music player. Google was not the first search engine. Where these solutions excelled was in the order of magnitude improvement on what directly or indirectly came before them. Otherwise, there simply isn’t enough of a reason for customers to adopt, or switch to, your solution. Create: Are you able to build and deliver a solution that will capture the value created? The final component of strategic foresight is defining how to capture enough of a share of the value created for all key stakeholders to have a sustainable business. Regardless of whatever hype, excitement or goodwill the entrepreneur is able to muster, eventually the immutable laws of economics catch up. Apart from an understanding of the evolving cost structure and revenue model, this requires clarity on how to get the solution to the end consumer and how to overcome the inertia and resistance to adoption (nobody said entrepreneurship was easy!) Executional agility – Laying the runway, and building the plane, as you are taking off “Innovation is when you put your idea into action." Marc Benioff, Founder, Chairman and CEO of Salesforce.com Focus: Can you identify and prioritize what is critical before it becomes a crisis? Entrepreneurs possess a remarkable 24 x 7 work ethic driven by willingness to do whatever it takes to succeed. They have to constantly switch from the big picture to a micro level detail, from an external sales role to an internal technical role, from being coached by board members or advisors to mentoring their own team, from sticking to the course to scraping what has been done and recalibrating. In this chaotic environment, it is easy to run at 100 miles an hour and go nowhere. Focus is critical to getting the right things done in the right way at the right time.
- 3. Align: Are you able to build a talented team and ensure they are all pulling in the same direction? Great entrepreneurs understand the importance of building a team with the right complement of backgrounds, experiences and skills. One of the key lessons successful entrepreneurs always share is the importance of bringing on people as much for their values and cultural fit as for their capabilities. A team with the complementary talent and cultural fit will always be greater than the sum of its parts. Without this competitive advantage, the internal executional challenges will overshadow the external market challenges. Finally, the entrepreneur must proactively engage other key stakeholders, such as partners, suppliers or regulators, so that they see their success as being aligned to the entrepreneurs. Act: Can you keep the team executing faster & better than your competition can? To drive effective execution, the entrepreneur must enable three things among the team: clarity on objectives, accountability for performance and transparency on progress. Clarity on objectives means the entrepreneur is able to work with their team to translate the grand vision into tangible actions and outcomes. The team must then be given the responsibility to execute the actions to deliver the required outcomes. Finally, there must be openness on how things are actually going so that the necessary corrective action can be taken early enough to have an impact. Entrepreneurs who cannot provide clarity, accountability and transparency are effectively throwing sand in the gears of their start-up’s engine. Innovative resilience – The entrepreneurs’ “x-factor”: Being able to stick when its needed and to pivot when its not “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” Steve Jobs, co-founder and ex-CEO of Apple. Inspire: Can you get your team, investors and customers to passionately share your vision and see beyond the naysayers? The successful entrepreneur can make key stakeholders see the graceful and beautiful swan the start-up will one day become rather than the ugly duckling it is today. The entrepreneur must embolden their team to embark on a perilous and uncharted journey all the while believing their success is inevitable. Investors must not only be convinced to invest their capital but must also passionately advocate the start-up and push open doors that would otherwise remain firmly closed. Finally, customers must believe that adopting the solution will pay off handsomely and make them look like heroes inside their risk averse organizations. Persevere: Will you be able to stick to your plan when others would have quit long ago? By definition, the entrepreneur is proposing an idea that is contrary to the prevailing conventional wisdom. It can be dispiriting to hear people, some of whom may even be mentors, suggest that the idea won’t fly. This feeling only gets compounded when the entrepreneur invariably faces a catalog of dead ends, false starts, set-backs and disasters. What others in the business world see as failure, entrepreneurs see as a process of experimentation until the right answer is forced to appear. Their belief in their idea is so strong, they simply don’t know how to quit.
- 4. Evolve: Can you tell when to stick and when to pivot? Inspiration and perseverance are admirable only when they are matched by an entrepreneurs’ strategic foresight and executional ability. It is the difference between pig headedly sticking to a bad or failing idea and having the dexterity to reset course, even if it means jettisoning months of hard work and effort. This is one of the biggest dilemmas an entrepreneur will ever face. Unfortunately, the very nature of a start- up environment means that they will also frequently face this dilemma. Concluding thoughts The third, but most critical, entrepreneurial DNA building block is also the most difficult to capture and describe. Innovative resilience is the fundamental reason that smart and hard- working entrepreneurs are elevated into successful entrepreneurs. It is the spark that enables entrepreneurs to see opportunity where others see challenges. It is the driver that keeps entrepreneurs pushing past the seemingly never-ending inertia and long line of “experts” who keep telling them why their idea won’t fly. If their strategic foresight and execution ability matches their belief, the payoff can be magnificent. To effectively navigate start-up challenges, the entrepreneur must excel at all three of the entrepreneurial DNA building blocks. A deficiency in any one of these building blocks is a certain precursor to the death spiral to failure. Any time spent by an entrepreneur to gauge their proficiency in these three building blocks and to redress any issues is one of the wisest investments they will ever make. About the Author: Sohail Gondal, Founder & Managing Partner [email protected] Sohail has a proven track record of delivering shareholder value for principal investors through active management of a portfolio of companies. Over the course of his professional career, Sohail has built new businesses as a founder and early stage Director, delivered operational and bottom line improvements to companies in Family Office portfolios in interim positions, restructured or turned around businesses as a CEO and served Boards and CEOs of large corporations as a strategic advisor. At home in a broad number of industries, Sohail has a deeper understanding, from the strategic, the investment and the operational leadership perspective across sectors including retail, technology, telecoms, media, education, financial services and private equity. Sohail holds an MBA from Columbia Business School, a Masters in Industrial Engineering from the London School of Economics and a bachelors degree with double major in Accounting & Computer Science from the University of Liverpool.