10 Important Skills Every Entrepreneur Should Have
Entrepreneurship is not for the faint of heart. It takes steely determination apart from a willingness to take risks.
Entrepreneurship has changed over time.
The typical young entrepreneur in India today needs to be far more tech-savvy than an entrepreneur from several decades ago.
The typical entrepreneur also needs to have a more ‘well-rounded’ set of skills. Every entrepreneur cannot go around driving a car without a number plate.
Here are the Top 10 skills entrepreneurs need to have:
- Risk-Taking
- Living With Failure
- People Skills and Leadership Skills
- Money Management Skills
- Focus and productivity
- Spotting Talent
- Trendspotting
- Persistence
- Adaptability & Innovation
- Sales & Branding
- Risk Taking.
You have to trust your ‘gut feeling’ and just go for it. That’s the foundational nature of entrepreneurship.
If an entrepreneur isn’t a ‘risk taker’ at heart, he or she won’t take that jump into the unknown. He or she would prefer well-paid banking or a Wall St. job rather than starting an online store selling books.
- Living With Failure.
Failure will be part of any life journey whether it’s Edison with his incandescent bulb or entrepreneurs building companies.
In the course of running your company, you might take many wrong steps but you have to realize your mistakes and make course corrections swiftly and decisively.
Jeff Bezos says that Amazon has made lots of mistakes but the successes have been large enough to overcome the mistakes. “Failure is the opportunity to begin again, only this time more wisely.” Henry Ford.
- People Skills and Leadership Skills.
This has many facets. Different entrepreneurs have different kinds of people skills. Not everyone can draw upon or fall back on their power to create a ‘Reality Distortion Field.’ Entrepreneurs interact with angel investors, VCs, employees, vendors, and clients.
Entrepreneurs need to be able to take everyone on board.
- Leadership skills are mostly people skills.
How to motivate those working for you? It’s by giving people challenging responsibilities and opportunities and motivating them.
It’s important to recognize our biases if we are to become good leaders. How to motivate people — via criticism or praise?
Michael Lewis writes about Daniel Kahneman’s observations with respect to the training provided by the Israel Air Force instructors to their trainee pilots.
Lewis writes about how the IAF instructors “explained to Danny that he only needed to see what happened after they praised a pilot for having performed especially well, or criticized him for performing especially badly. The pilot who was praised always performed worse the next time out, and the pilot who was criticized always performed better. Danny watched for a bit and then explained to them what was actually going on: The pilot who was praised because he had flown exceptionally well, like the pilot who was chastised after he had flown exceptionally badly, simply regressed to the mean.
They’d have tended to perform better (or worse) even if the teacher had said nothing at all. An illusion of the mind tricked teachers – and probably many others – into thinking that their words were less effective when they gave pleasure than when they gave pain. Statistics wasn’t just boring numbers; it contained ideas that allowed you to glimpse deep truths about human life. “Because we tend to reward others when they do well and punish them when they do badly, and because there is regression to the mean,” Danny later wrote, “it is part of the human condition that we are statistically punished for rewarding others and rewarded for punishing them.”’ (Source: The Undoing Project.)
- Money Management Skills.
Entrepreneurs need money upfront to get things started.
You need to be able to raise money and then manage the money well.
Lots of businesses fail because they don’t learn the art of living within their means. Your business needs to become cash-flow positive as quickly as positive.
- Focus and productivity.
Entrepreneurs will face challenges and distractions — the challenges could be professional while the distractions could be in the personal domain. Entrepreneurs need to have the ability to focus on leading their companies. It takes focus to be productive. The ‘recipe’ to be productive varies from individual to individual — so, there is no ‘one size fits all’ solution about how to achieve focus and productivity. Entrepreneurs have to find what works for them.
- Spotting Talent.
If you are the smartest person in the room for a long time, then you are doing something wrong. From Steve Jobs to Tim Cook, lots of leaders have attributed the success of their companies to spotting the right talent and then letting them do their magic. Scaling is a big challenge for growing companies.
It takes different skill sets to run a company with a headcount of 10 versus a company with a headcount of 100 versus a company with a headcount of 1,000 and so forth.
As the company grows, the founder needs to have a vision about how to manage a large and growing workforce. Some entrepreneurs hire professionals as CEOs — think Page/Brin and Zuckerberg — while others take a different approach.
Reed Hastings of Netflix took the approach of empowering his senior managers to be as independent as they could be. Some entrepreneurs can be controlled freaks. Hastings is the opposite of that.
- Trendspotting.
Or, how to have second acts.
You don’t want to be one-trick ponies.
Companies that have been around for decades have undergone major transformations during that time. Apple started with manufacturing PCs, came close to being bankrupt, then became the world’s most valuable company by leveraging its unique combination of hardware and software skills and putting that to work to create a great smartphone and then selling it with one of the greatest marketing strategies that any company has ever come up with.
Microsoft has adopted cloud technologies with religious fervor after being a latecomer to the field and falling way behind the innovator, Amazon. IBM has been making hardware for a century. However, hardware constitutes less than 10 percent of its turnover today.
Disruptive innovation tests companies and only those who are tenacious and innovative enough survive.
Entrepreneurs at the helm of companies have to be particularly nimble in spotting trends.
A company in the cloud business has to be super-sharp about understanding client attitudes about private cloud versus public cloud versus hybrid cloud models. IBM realized that PCs had become commoditized and proceeded to get out of the low-margin business.
Peloton took a pretty commoditized product and built a successful brand by spotting a lifestyle trend focused on fitness. The same is true of Fitbit in smartwatches. Peloton, Fitbit, and GoPro have built a community of consumers who are into sports and fitness.
- Persistence.
Walls are there to keep the other people out, Dr. Randy Pausch mentioned in his lecture about achieving your childhood dreams.
It takes persistence to succeed at anything. Certainly, the entrepreneurship journey takes persistence too. You need persistence to succeed in business because there will be headwinds in your path and you’ll need the determination to keep your nose to the grindstone and to keep your mind focused on your goal.
You will need the persistence to succeed as you face new and unforeseen challenges in your entrepreneurial journey. You’ll need to research and find the answers for yourself.
- Adaptability & Innovation.
Innovation is at the heart of successful businesses — both old and new. Only those businesses that are adaptable survive in the long term.
BlockBuster once had an opportunity to acquire Netflix. It was Netflix under Reed Hastings that knew that ‘DVDs via mail’ was only a short-term business and online streaming was where the future was.
Today, Netflix is the leader in streaming and also a leader in producing original content. A great example of adaptability and innovation.
Amazon started selling books online and then started selling everything online. Or, almost everything.
Somewhere it realized there was a niche market for cloud computing and created Amazon Web Services (AWS). AWS soon became the most profitable part of the company as established players like Microsoft ignored the low margins that AWS was dealing with.
Another great example of innovation.
Microsoft itself showed that it was adaptable by realizing that the cloud was going to be big. It created its own Microsoft Azure suite of cloud products and now is a strong challenger to the no. 1 player, AWS.
IBM has shown adaptability by changing from a hardware company to a services company. This 100-year-old corporation now earns less than 10 percent of its revenue from selling hardware. As IBM realized that PCs were becoming commoditized, it got out of that business and stuck to high-end hardware such as servers and mainframes where margins were reasonably high.
Dell has shown similar innovation and adaptability by making its own foray into services rather than sticking to making PCs, which was its original business.
- Sales & Branding.
Sales and marketing are crucial for a business to succeed.
No matter how good your product might be, it takes clever sales and marketing effort to establish a new product against competitors. Entrepreneurs who really get into the weeds of marketing efforts rather than delegating that part of the job to others will likely succeed more often.
It’s only by getting into the trenches of the marketing activities of the company that you’ll learn to iterate your marketing efforts based on what actually works rather than your assumptions about your products or how to sell it or what the market needs.
Your business will ultimately succeed if it meets some market needs.
In the days when individuals are focusing on building their brands, it’s crucial that companies think of developing a long-term brand identity.
Peloton, Patagonia, and Apple are examples of companies that have developed unique brand identities.
Your company’s brand image will be how your customers perceive your business. Entrepreneurs should focus on defining their brand and then developing it. It’s not insignificant that Apple’s iconic ‘1984’ ad was written by Steve Jobs to reflect Apple’s brand.
Entrepreneurship is an attractive route if you want to be your own boss and make a dent in the universe. For an entrepreneur to succeed, he or she needs to be ambitious yet humble; entrepreneurs need a willingness to learn and an ability to listen; and entrepreneurs need confidence, courage, risk-taking, and perseverance.
What do you get when you combine the latest advances in robotics and AI with advances in nanotechnology and 3D printing? The Fourth Industrial Revolution. Advances in quantum computing, biotechnology and genomics, the Internet of Things, and self-driving vehicles are part of the Revolution as well.
In a time of technological advances, what entrepreneurs need is a combination of complex problem-solving skills, critical thinking ability, and emotional intelligence.
Much as technologies keep getting replaced by the Next Big Thing, one thing remains the same — it’s the human brain that evolved over hundreds of thousands of years and has remained more or less the same since the last several tens of thousands of years.
It’s rather critical that people should at least be aware of the imperfections of their minds. Londoners erroneously thought during the Second World War that German bombs were targeted; they were not. Statisticians showed that random bombing would in fact lead to some parts of a city getting bombed repeatedly.
People find it a remarkable coincidence when two students in a class or two colleagues in an office share a birthday. The math says that there is a better than even chance, in any group of 23 people, that two of its members will share a birthday.
Imagine there is a very sick person. What is the likelihood of the person dying within a week and within the next year? People assign a greater probability to the person dying within a week.
We are bad at judging the probabilities of uncertain events.
Once you are aware of these imperfections, you’ll be better at judgments and decision-making.
And you’ll be better entrepreneurs.
