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A Key Personality Trait for Entrepreneurs
Posted by Mitchell York under Franchising
I’m just finishing up writing a book for executives who are thinking about becoming entrepreneurs. I was trying to come up with an anecdote about how entrepreneurs need to be flexible thinkers, about to dodge roadblocks without much time to plan. I think I came up with one.
I went to Columbia Business School. One of my good buddies in class was an electrical engineer, whom I’ll call Todd. He designed photovoltaic cells for industrial buildings. I remember vividly when we took our first Corporate Finance midterm. The test consisted of one problem in which we had to use discounted cash-flow and other analysis to create a valuation for a company.
I got to about Step 14 of a 30-step process and then forgot how to calculate the cost of equity. After a minute of trying to remember, I made a little note in the margin: “Professor, I forgot how to do this step, so I am assuming the cost of equity is 12%.” Then I moved on to step 15.
Meanwhile, I could hear Todd in the seat next to me, and it sounded like….whimpering. Sweat was beading on his forehead….in the middle of December! When the test was over I asked him what happened. He said he got stuck after about 10 minutes (of a two hour exam) and couldn’t go on. I asked him, “Why didn’t you just make something up?” He was too dazed to answer.
We had a long conversation about it afterward. We concluded that the reason I was able to keep going and he was not had to do with our core personalities, our DNA. I am a marketing guy. I make stuff up for a living. If I’m wrong, so what? He is an engineer. If he makes stuff up, buildings are gonna fall down! He has to be right.
Once we talked it through, he was able to adjust for his personality type and vowed next time to keep going even if he didn’t know the answer to a piece of a problem. He got an “A” on the final and the course. I got a “B.” But should Todd be in his own business? Maybe not. Last I heard he is happily designing the most advanced solar panels in the industry for bigger and bigger buildings, and having a great life working for someone else.
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6 Responses to “ A Key Personality Trait for Entrepreneurs ”
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Pingback from Why Successful Entreprenuers Don’t Make It Up | Chris Clark's Web Site
March 1st, 2009 at 10:15 am[...] Source: A Key Personality Trait for Entrepreneurs [...]
March 1st, 2009 at 10:17 am
Do I agree you need to fail forward faster, sure. That’s the key to being on top. Find what does not work and fix it. Does that mean you make up some bullshit and keep going on task. Not if you want to say in business. If you don’t know the answer, take the time to find the right one.
How much wasted time are you going to spend running down the wrong road, only to find it was the wrong road too late. Do I think you need to get into analysis paralysis, no, don’t spend forever working on something that you don’t know the answer to. However, don’t throw in some complete bullshit thinking you don’t need to revisit it either.
One of my personal philosophies is to not spend over 15 minutes doing the same thing expecting different results. If I can’t figure it out, then I move on and come back to it later. Making a mental note that I need to solve that problem and need some help.
It is important that entrepreneurs build a support network, build a master mind alliance of like minded individuals you can rely on when you are in a bind and get stuck. Do your homework, don’t expect to muddle your way through life. If you don’t know it the first time, that is acceptable. Just make sure you know the answer the second time.
In my business, software architecture, you can’t go around making stuff up. My value to organizations is my credibility. Winging it, is not an option. If I were to make it up and be challenged, without being able to substantiate my claim, I would lose credibility. It think it’s more important for entrepreneurs to be able to think outside the box than to make things up. Take away all you know to be assumed and think about what is possible without those assumptions, brings many opportunities to light, that were not thought to be possible before.
Another thing, I love to hear “I don’t know” in interviews. Our interviews are extremely hard and in 7 years I have never had anyone know all the answers. However, I have heard my fair share of bullshit coming from people trying to answer questions they should have not tried to answer. Credibility ruined and I have never hired one of these people who try to answer questions they can’t answer.
March 1st, 2009 at 10:26 am
Chris, great points! I think we agree more than disagree. In your business of software architecture, you definitely can’t wing it–same as my friend the electrical engineer. But as you point out, you have to learn how to zig and zag your way to an answer when you are in business–and thanks for bringing up the “mastermind” idea of getting help from like-minded colleagues.
March 1st, 2009 at 3:00 pm
I agree with you although I would use the phrase “Think Outside the Box” instead of making something up. That has a negative conotation and could lead others to question the integrity and moral charatcer of the entrepreneur (leading to a loss of trust). Thinking outside the box is what makes a great entreperenuer and marketing person. We dont think in black and white while we operate in shades of gray. I love your new webiste by the way..
March 1st, 2009 at 3:58 pm
Great entrepreneurs have a sense of creative optimism that makes hurdles easier to overcome.
They learn as they go. Not knowing an answer to a question doesn’t deter them. Instead they reformulate the question and move ahead — just as you did on Step 14 at Columbia.
A key entrepreneural characteristic is the ability to apply existing resources to changing circumstances to achieve an objective.
March 1st, 2009 at 5:03 pm
Walter, I love that idea of “reformulating the question.” There’s a video floating around on the internet with the same basic idea: one line of it always makes me laugh: “When God gives you lemons…get a new god!”