5 Traits of Successful Entrepreneurs
The word “entrepreneurship” is overused. It’s hard to even know what people mean when they say it these days.
On the one hand, you have people like Donald Trump, who has started many businesses and oversees billions of dollars in assets.
On the other hand, you have enterprising young folks doing “side hustles” trying to earn some extra cash on the side, or freelancers and consultants providing services to a small number of clients.
Unfortunately, both sides use the word “entrepreneur.”
I’ve always demonstrated the distinction between a true entrepreneur and someone who simply is self-employed by utilizing the CASHFLOW Quadrant.
On the left side of the quadrant, you have employees and self-employed folks.
As much as self-employed people want to call themselves entrepreneurs, they’re not. They do not own a business. They own a job. They don’t employ people, and they’re constrained by their own capacity. If they don’t work; they don’t get paid.
Do they have the potential to become entrepreneurs? Absolutely, but they aren’t there yet.
On the right side of the quadrant, you have business owners. These are true entrepreneurs who have built businesses that make money whether they work or not. They employ people or build a system that automates their work and sales, and they see their business scale at a rate that is way beyond just their work capacity.
Perhaps you’re reading this and realizing you are self-employed. If your desire is to move from the left side of the quadrant to the right side, here are five traits you’ll need to develop in order to stop owning a job and start owning a business.
1) Be a Contrarian
Becoming an entrepreneur is in and of itself a bit of a contrarian move. Many friends and family members simply don’t get it. Why start a company when you could get a “safe and secure” job? Of course, those who have been through layoffs or replaced out by technology realize there is nothing safe or secure about being an employee.
But there is a level of contrarianism that an entrepreneur needs to develop beyond just leaving the job market in order to succeed. This is what many people mean when they talk about being “disruptive.”
For instance, Uber is a company that disrupted the taxi industry. The founders of Uber looked at a long-established industry and realized there could be a better way. That was a contrarian move. And a risky one. But it paid off handsomely.
In short, successful entrepreneurs don’t accept the status quo. They ask questions that challenge long-held assumptions. And they profit from the answers — when they get them right.
2) Draw no Distinction Between Work and Play
Guess what? Starting a business and scaling it to success takes a lot of energy and work. True entrepreneurs, however, don’t look at this as a deterrent.
Most employees can’t wait for the weekend or their vacations. They view work as something that gets in the way of the things they really want to do.
Most entrepreneurs will have the opposite problem. They work and work, sometimes too much to be healthy.
Why? Because they don’t draw the distinction between work and play. To them, their work is play. The challenge is to create balance to eat well, exercise, and cultivate meaningful relationships.
But the fact remains, if you aren’t ready to work a lot — and enjoy that work — you’ll have a hard time being successful.
3) Think in Patterns, Not in Details
This is one of my favorite stories about Steve Jobs: When they were working on building iMovie, the team at Apple had an important meeting with Jobs. They had compiled stacks of plans and schematics to share with him. They had all the details on hand.
Jobs, however, walked into the room, ignoring the details, and went to the whiteboard. He drew a picture of a video player. Next to it, he drew a picture of a movie file. He then drew an arrow indicating the user could drag the file into the movie player. “This is what we’re building,” he said.
Steve Jobs foresaw the larger patterns of what users really wanted from Apple’s software. He was aware of the patterns in consumer behavior and as a result understood what Apple had to make, rather than stick with the status quo.
He didn’t let the details lead the way. He used vision to drive what the details would be.
Successful entrepreneurs do the same thing.
4) Act as a General Manager
In pro sports, it’s the general manager, or GM, who builds the team. The team coach then manages those players for success. The primary job of the general manager is to build the team for success. If he or she does a poor job, the team will fail, no matter how good the coach is.
In business, the entrepreneur needs to be a GM, not a coach. Rather than focus on managing people, you need to find the right talent and entrust that talent to a manager who will execute your vision.
As rich dad taught, business and life are team sports. Without a great team, you will fail. Often the entrepreneur is the least-intelligent person in the room, except for one area, his or her genius to find the best talent. In fact, if you’re not the dumbest person in the room, you’re probably doing something wrong.
5) Have a Higher Purpose
Finally, and perhaps most important, you have to have a purpose greater than just making a lot of money. When times get tough, when you’re not seeing the success you’d like, fighting through is near impossible if you’re only in it for the money. But if you have a greater purpose, you fight through to success.
At Rich Dad, our purpose is to elevate the financial well-being of humanity. We do this through education. And yes, we make good money doing it. But if money was our only driver, we would never have made it. Everything goes back to our purpose.
What’s your higher purpose for being in business? If you don’t have one, I doubt you’ll succeed.
Play it smart,
Editor, Rich Dad Poor Dad Daily