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   Entrepreneur Attitudes Towards Risk
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   Entrepreneur Personality Types
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   Inside The Business Plan - Management Team
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   Inside The Business Plan - The Executive Summary

Hello, this is Professor Deborah Streeter at Cornell University. Welcome to my podcast series on Entrepreneurship and Business Planning.  In each podcast I’ll cover a specific topic relevant to startup entrepreneurship plus I’ll play clips of some of the comments I’ve collected over the years in my conversations with entrepreneurial experts. These comments can also be seen in video format on my website at eclips.cornell.edu, where you can find over 7,000 interesting, short, video clips relating to entrepreneurship and business. Access is free and open to all with a simple registration.

 

Today I want to talk about that age old question:  What personality characteristics are associated with successful entrepreneurship?  Although this is a topic of great interest among entrepreneurs I work with, I will warn you in the beginning that I am not a fan of this way of thinking about entrepreneurship.  By the end of the podcast, I hope you’ll see why.

 

Let’s start with the “born entrepreneur” theory.  The stereotypical way to think about entrepreneurs is the guy (and by the way, the stereotype usually involves a male image) who had the lemonade stand, etc.  And there are great examples out there.  One is Danny Stein, founder of JDS Capital, which funded e-Music, the world’s largest source of copyright-free music.  When I asked Danny about what defined a successful entrepreneur, here’s what he said:

 Stein01_background1Entrepreneurs tend to be what is commonly referred to as Type A Personalities. People who are aggressive, flexible, and basically want to be the captain of the team and really manage their own game within whatever guidelines they set forth for themselves, which often - or they can be small. They can be big. It could be a small little cottage. It doesn't always have to apply to business. There are many entrepreneurs that are trapped in what is typically referred to as an institutional environment. And they live entrepreneurial existences outside of their nine to five workplace. Some people are fortunate enough to combine the two. You know when you talk to entrepreneurs, they always have stories about when I was eight I did X, Y, and Z. And I'm no different when I was ten. You know, when I was probably earlier, when I was three or four I remember selling marshmallows at the end of my driveway because the other kids were selling lemonade. My brother and I, who is two years older than I am wanted to do something different. So we did some funny - we had some successes and some failures, like all entrepreneurs. In 1979, probably our most memorable sort of crazy entrepreneurial endeavor was during the gas shortage in '79 we were selling doughnuts and coffee to the motorists lined up in front of gas stations. Dunkin' Donuts was literally across the street from the gas station. It was one of the opportunistic. We were next door buying a video game at a video store. This is '79 was the very beginning of the world of video gaming pong. I don't think even Atari was available yet. But anyway, we were at a store. There was you know, 100 cars in line. Dunkin' Donuts was across the street. We went over for a doughnut. We came up with the idea of selling doughnuts and coffee. We bought them. We walked across talking about the idea of you know, because we didn't have any capital. So you can only spend two bucks. You buy a bunch of stuff. You go sell it for five. And now you've got some capital. So I think for me it all starts with the idea of doing things that appeal to myself, as sometimes they would be strange. And some people would think would be strange. And other times they would be more rational. And through high school I had myself engaged in various entrepreneurial pursuits selling tickets. You know, probably more looking like the character Dimone in Fast Times of Ridgemont High than a legitimate ticket broker. And then in college, when I got to Cornell, I started a business with a couple of classmates that took all the schedule - the - of bar specials and the schedule of acts, musical acts performing oat various clubs and bars throughout the Ithaca area selling advertising, and then distributing them to all the dorms and the fraternities and the sororities of both Ithaca College and Cornell. And that business was a you know, it was a small time success. It probably put 50 bucks a week in each of our pockets, which was you know, enough money to buy booze and other sundry items as a college student. And then we actually sold the business to another guy. And I don't know if the business is still there 

Danny is what would be called “opportunity obsessed” and that attitude has been very helpful in launching him into the world of entrepreneurship after college. 

 

But the born entrepreneur is really only one type of successful personality in the entrepreneurial world.  In my hundreds of interviews for eClips I have run into many other types as well.   There is the “accidental entrepreneur,” who is doing a certain thing and suddenly finds he or she has started a business…..there is the “reluctant entrepreneur” – someone who is downsized from a job or is thrust by life circumstances into the arena.  Throughout my interviews with people from all different walks of the entrepreneurial life, there are some very important themes.   One is that entrepreneurs need to have a strong work ethic.  Sheila Johnson, co-founder of Black Entertainment told me she gets frustrated with young entrepreneurs who think it is easy to make money.  In the first part of this clip she is answering my question of whether you need a business degree to be successful.  

 Johnson40_entrepreneurYou do not need an business degree. Believe me, neither my ex-husband and I had a business degree and look at what we did, Black Entertainment Television. He was a teacher, social studies teacher, education. I was a teacher. There's just something within you. To be an entrepreneur and a lot of people don't understand, you have to learn to get into the trenches. You've got to learn sacrifice. You've got to learn. You may put your social life to the side for the next 10 years but it is tunnel vision 24/7 work. If you're not willing to put the sweat equity into this, don't even bother doing it. And too many of them want to make money fast. You cannot do it. Whatever little money you make, you hang on to it, you invest it, you save it, you do what you have to do and then just keep building on. Just keep building onto it. 

I have heard this theme of sacrifice and hard work from many of my interviewees.  The companion theme is the ability to handle many different tasks at once.  Here is Sandeep Kumar, founder of an educational software company called Edusmart talks about this need for a slightly ADD, multiprocessing approach to starting a business:

 Kumar26_entrepreneurDefYou know, besides the definitions, being an entrepreneur is really about juggling 1,000 different balls. It is - you are no longer just focused on one element, which you would be if you were to work. It consumes your life. It essentially, whether you are at home. There is essentially no distinction between your private time and your work time. It is really going out without a road map and you know, a lot of sense. Because even if you do have a business plan, it is subject to change at a moment's notice in a young company. One contract can completely change the direction that your company goes in. It is keeping your eyes open 24 hours for opportunities. Making connections. Again, across borders, across fields, across you know, your social networks. You are constantly seeking those connections. So yes. It is intellectually stimulating and yet exhausting. It is financially scary that you are living on the edge here. But worth every moment.  

Sandeep’s definition really raises an important point: if you are going to be an entrepreneur, you have to be able to tolerate ambiguity.  I almost think that is more important than what is often called the “risk-taking” attitude of an entrepreneur.  But this ability t

  

In addition to the tolerance for ambiguity, entrepreneurs I have talked to also seem to have an Intolerance for structure and bureaucracy.  Consider my conversation with Maggie Coffeey, founder of Tetragenics, Maggie has an MBA from Harvard Business School and her Doctorate in Veterinary Medicine from Cornell University and started a business focused on new technology for the large-scale production of recombinant proteins for use in human and animal medicine.  She told me she was marked from an early age as someone who would not fit into a corporate culture:

 Coffey04_imageVsResultsI think most people are born entrepreneurs. It is a personality trait that sort of fits a certain description. If you have enough of these traits, you will probably do well in entrepreneurship, but the professor I talked to when I was about 21 years old, I was working at a corporation, and he said right then and there. He said, You should always try to work in small business. He goes, Because small business cares about results. Big business cares about image. That's not a good thing for you. He said, You need to work in a company where they wouldn't mind if you wore the Star Spangled Banner wrapped around your butt, that's all you had on, and you just produced results. He said, They will thrive on your results in the small business. He said, In the big business, you are going to have a very hard fit. He was right. I think based on--that was many years ago he said that. I really think that an entrepreneur just has certain personality characteristics, and as you get older, you go, Oh, I guess I am not a corporate type. I guess I am an entrepreneur. I guess I am a scientist, whatever it is. I think you sort of seek your own level. 

These comments echo many others who tell me that once they run their own show, they are “virtually unemployable.”    And as a balancing comment, it is important to say that the desire of entrepreneurs to live without structure and bureaucracy CAN become an issue as the company grows.  I talked with Venture Capitalist Anita Stephens about this aspect of entrepreneurs.  Anita  is a  General Partner of Opportunity Capital Partners ("OCP"), a private equity firm that provides equity capital to later stage companies for acquisition and expansion as well as early stage companies with leading edge technologies. The fund's investments are primarily in the areas of communications, information technology and healthcare, with a particular focus on businesses that are owned or managed by minority and women entrepreneurs.  She has worked with many entrepreneurs over the years and here are some of her thoughts:

 Stephens23_challengesNewBizEntrepreneurs are to me, and I love them - they can be an interesting bunch of folk - they like the idea of creating, they like the rush of putting it together. They even like the notion that the cash is tight. There is a period early on in a company when it's about getting the deal done and an entrepreneur likes that. Once it gets on a track - now you're hiring people, you've got people reporting to you, you've got to have meetings, you've got to know where your VP of engineering is and your VP of finance is, that's where I find entrepreneurs are not very comfortable. That's when they get out of their space and only some are able to transition to a more organized life. It is the disorganization, period, that entrepreneurs love. There are no rules to it. People are working all day and all night. Everybody is sitting around a table. There is no form and things get done - that's an ideal environment for an entrepreneur - because you're in a creating mode. Once that creating mode is gone and you're now transformed into a company and all of the things that go along with building a company occur I find that most entrepreneurs are out of water and that's when trouble begins because they're not necessarily paying attention to the detail so some of the habits that were OK before.   

So far, we have only talked about entrepreneurs who have started their own businesses – but that is just one flavor.  Others apply their entrepreneurial attitude and thinking to corporate environments.  Here are some thoughts from Paul Joseph, an entrepreneur who ran a highly successful business teaching bartending while a student at Cornell and then has worked in several small companies before and after getting his MBA from Babson.

 Joseph04_entrepreneurI do still think of myself as an entrepreneur even though I've succumbed to a corporate type of job. And trust me, day one I walked into that cubicle and I rolled my eyes wondering what I was doing there. I think the definition to me of what an entrepreneur is and whether I fit into that mold or not. It hasn't changed but I think the ambiguity of the word has gotten more real. It's easy when you're self-employed when you're bootstrapping yourself to say you're an entrepreneur because you're supporting, you're perpetuating it and all of that. In thinking about what an entrepreneur is and observing...especially the dot com rage and then bust. I dealt with a lot of people who considered themselves as entrepreneurs but I looked at them more as opportunists. You know they were taking advantage of free flowing venture capital. They were more concerned about valuation and exit strategy than they were about developing a business and creating value. So I looked at a lot of people that many...other people might consider entrepreneurs and I just considered them opportunists and for lack of a better word a sister...just sort of working within that system and cashing out. And now, even within the corporate environment, I think one of the traits that I bring to this and one of the reasons they brought me in was I spent the last eight years really providing that external market focus to enterprises. And its not unusual within technology companies in particular to lose sight of why you build and why you develop a piece of technology. So I don't think the definition of entrepreneurship has changed so much as how it applies. And I think its...it definitely is a personal...there is a personal bias in there as whether an individual considers themselves one or not. In fact, last night I had dinner with someone who just recently sold his business to a major computer manufacturer and I asked him if he considered himself an entrepreneur and he didn't know. And I think that's common among a lot of the people you've interviewed and when you study what entrepreneurship is...entrepreneurship is about undertaking something. Its getting it done and a lot of time people are entrepreneurial but don't have that, you know, lemonade stand or, you know, venture invested entity to say to the world this is the mold that I'm fitting in to. By definition it lacks definition. 

One thing I have not mentioned yet is the “fire in the belly” factor – that is, that venture capitalists and other investors really look for entrepreneurs who have a great passion for what they are doing.  Jim McNair, who has worked with entrepreneurs for years in the investment banking and private equity businesses, says it well.

 McNair15_entrepreneurshipEntrepreneurship is being willing and able to do anything anywhere anyhow to make a business move forward. And not get lost in the structure. Not get lost in the formalities. But be willing to do anything. You'll find most the great entrepreneurs, if there is a problem on a machine, they go out and they fix it. And they understand it. I was trying to buy a business one time from a fellow named Lee. And Lee was this genius. But Lee knew how to operate every single machine in there. And if something went down, he could go out and figure it out. So being willing to do almost anything anywhere anyhow to keep the business moving forward is a true entrepreneur. Not looking for an assistant. Not looking for the next VP. You have to be able to delegate. But you have to be able to do almost anything. 

But it turns out that the passion has to also be tempered with other characteristics that make it possible for the entrepreneur to really listen well to others.  Seth Goldman, who founded Honest Tea talks about this need to see beyond one’s own beliefs and stay tuned to customers, employees and investors:

  Goldman29_listenAnother important thing is to listen.? It is very easy to, as much as ... if you really believe in something, it is very easy to believe in what you are doing is right and not necessarily listen to those around you or try to listen to the marketplace and so you really do have to be able to react and listen and not necessarily hear what you want to hear as much as listen to what people are saying and that goes with employees and it is easier to take for granted that all employees are going to be happy and you know, what they want to do, something you ask them to do.? You have to sort of listen not just to what they say but to the subtext of what is being said and that can be... it can be in a small organization where you do not have the ability to have, you know, very intensive supervision.? You have to listen carefully.? I think, you know, the other thing from just a business perspective is you have to keep pushing, it is easy to want to sort of self-congratulate yourself and say, you know we are finally doing what we have said we would do but you can always do better and that is a little frustrating because sometimes you wanted to say, you want someone to say 'great job, congratulations', but you know there is still so much more to do and I think that if we are satisfied with what is happening then we are not really being honest with ourselves. 

I think Goldman’s comment is very important.  Over the years, a universal theme among entrepreneurs is their surprise that others, especially their employees, aren’t motivated in the same way they are.  So for many, managing others and even managing partner relationships is difficult.  But if you look at any success in entrepreneurship and you can see that it took a team to get there.

Let’s see,

Flexibility, drive, can-do attitude, tolerant of ambiguity, passion, integrity, good people skills listening skills.

 

That’s quite a list of characteristics.  But notice none of them mean that you have to be just a certain personality to be a successful entrepreneurs.  I have known entrepreneurs who are shy, outgoing, nerdy, hip, book-smart, street-smart, logical and linear in their thinking, creative and non-linear in their thinking.   I’ve know entrepreneurs of all ages, all races, all ethnicities, all nationalities and all sexual orientations.   So as you consider your own entrepreneurial path, don’t let anyone say you are not “typical. ”  Instead, focus on what you do well and look for ways to become more flexible, to increase your tolerance for ambiguity, to improve your management skills, to apply your passion ,and above all, strive always to keep your integrity intact.    I will close the podcast with a great clip by an extremely successful friend and colleague who is in commercial real estate, Jacie Stivers, founder of Commercial Investment Real Estate, based in Florida. Although she is both successful and wealthy today, she started with nothing, and these comments tell you how she (and many other entrepreneurs) got through it all:

 Stivers12_entrepreneursI think an entrepreneur is first of all a little nuts. They can't be really security oriented because...my mother used to call Jimmy and I when we were young and say would one of you get a real job with insurance and benefits. You know, we didn't take a vacation for ten years because we didn't make any money when we were not working. So I think the entrepreneur has to be passionate, a little bit naive, willing to take risk, committed in more ways than one, and probably have a great sense of humor because I don't think you can make it without that. That’s all for today.  Thanks for listening and tune into to our next interesting podcast series on Entrepreneurship and Business Planning, in which we will focus on attitudes to risk.