What makes a successful entrepreneur?

Simon Middleton believes there is a specific pattern which highlights those entepreneurs most likely to succeed. He tells all to SmallBusiness.co.uk.

Over the last decade entrepreneurship, particularly in the UK, has become one of the most dynamic trends to emerge in the business sector – some 450,000 new businesses were registered in 2011/2012. (UPDATE: Analysis by Iwoca of Companies House data showed that over 436,000 businesses were registered in the UK between January and June 2023, up by 8% from H1 2022.)

A feature of this trend is the search for ‘silver bullet’ insights around the topic of what makes for a successful entrepreneur. The search for simplicity has, we think, led to some confused perspectives, especially around the almost automatic requirement that an entrepreneur has to be an innovator. This has come about through our love of story about the struggle, breakthroughs and disappointments experienced by those who have succeeded ‘big time’. ‘Innovation’ is a constant feature of these accounts. But we know that there is much more. Indeed, without the capacity to execute on the vision or idea the innovation remains literally a figment of the imagination.

What truly defines an entrepreneur goes beyond innovation. We are starting to see the emergence of a specific pattern which highlights those entrepreneurs most likely to succeed. We know too that there are four stages which mark out the entrepreneur’s journey and that each stage requires a set of behaviours which, if not present will need to be augmented by a person, or people who have these skills. Needless to say this raises an absolute requirement for deep-level capability in teamwork and co-operation and team leadership.

Seeing opportunities

Underpinning the first stage which is marked by scanning the environment and identifying opportunities is, we believe, what we call a ‘contrarian spirit’. It enables them to see opportunity where others don’t. Mobile phones are now being used as secure money transfer banking units in Africa leading to a revolution for rural people who have always had to rely on the insecurities of a local agent. The connection between the different elements (high technology phone, money movement, IT systems) required ‘dot connection management’ (‘environmental scanning’ in our language) at a high level. Being able to connect dots in a novel way when others don’t even see the dots is without doubt a prerequisite. There is innovative thinking here. But it is just the starting point. The journey to successful execution calls for much more.

Having the self-confidence to defy conventional wisdom is another key requirement. Pigs certainly don’t fly. Neither would the Airbus A-380 if you were around in the early 1900’s. neither would a laptop be possible if you were a Watson working on the first digital computers in the 1940’s. They needed a large room to house the parts. As marketing guru, Seth Godin, wryly notes ‘all good ideas are terrible until people realise they are obvious. If you’re not willing to live through the terrible stage, you’ll never get to the obvious part’. Self-confidence and persistence are without doubt traits which will likely ensure that an idea is turned into a commercial reality, but what if the idea is truly a bad one after all?

Just because someone feels they have hit on a great idea or business concept does not automatically mean this idea will float. Even persistence may look like banging your head against a brick wall if the concept is doomed to sink. So this brings us to the next point, flexibility. This is ‘to let go and let others’. The ability to re-work the idea, to develop an ecosystem that will support it, to build partnerships with others who can add value to the idea and look at it in other, potentially more viable ways, is essential. One of the most compelling insights that emerge from The Apprentice is the debilitating impact on a team’s ability to execute when rampant egos push for their preferences.

The reasons for failure

Lack of self-awareness is one of the key reasons for failure, and in young people with little to no corporate experience there are huge chunks of missing expertise, not to mention commercial gravitas, to overcome. The Young Report, ‘Make Business Your Business” (May 2012) observed that the success rate for new business ventures is much higher for those who start in their 50’s. The success rate is 48 per cent within this age group. For those up to age 49 it is 29 per cent.

The ability to de-risk the entrepreneur, both for their sake as well as the investors’ sake is key. We all have a deep and vested interest in ensuring the survival rate of the 450,000 newly-registered companies mentioned above. It is this de-risking process that enables us to draw a clearer picture of the type of entrepreneur most likely to turn their dream into a commercial reality. With this clearer entrepreneurial profile comes the clarity around what needs to be developed/trained and what additional skills need to be brought into the venture to ensure its success.

There is further good news. It feels to us that there is an emerging readiness to ‘entrepreneur’ in a different spirit. While the current mindset still points to the main motivator for entrepreneurs as making big money, closely followed by becoming what we coin an ‘iconic’ ‘Apprentice-style’ entrepreneur this is beginning to look like narrow, conventional thinking, especially when you consider that our current economic plight is due to repetitive, damaging attitudes around ‘profit’. This is where transformative thinking and behaviour is worth aiming for when we nurture, source and invest in future commercial entrepreneurs.

The change in attitude embraces the emerging collaborative economy whereby those with the expertise collaborate with those who have the funds and join forces to offer would-be entrepreneurs an opportunity to expand their own opportunities, at no cost. This makes little sense in the conventional world and we continue to explore and learn how it functions. This approach, known as Radical Generosity, might seem counter-intuitive and financial suicide. However what we are seeing is a different return on our time and financial investment as the young entrepreneurs progress.

Further reading on entrepreneurship

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