10 Rules of Successful Entrepreneurship

1. Commit first to the ideal of entrepreneurship. Successful founders commit to the ideal of entrepreneurship itself rather than to a single business model or product. That flexibility helps them react nimbly to market feedback, abandoning products and business models that aren’t working.

2. Look for problems to solve before creating business solutions. Most entrepreneurs start by choosing the product they want to make or the service they want to provide and then try to convince the market to buy it. It makes more sense to start a business the other way around: Identify what the market needs first, and then develop a solution.

3. Focus on innovation and scale. Despite what we’re taught, most entrepreneurs launch businesses in unattractive, static fields and offer no competitive advantage. Clearly, the most successful entrepreneurs combine their deep knowledge of customers’ needs with a commitment to achieving outsized scale and innovation.

4. Assemble founding teams with a history of working well together. Teams of two or three cofounders who complement and respect each other generally result in greater success than companies founded by individuals or those with larger teams. This is especially effective when the founders have worked together successfully before.

5. One cofounder is usually “first among equals.” Notwithstanding the previous rule, usually one of the cofounders in a successful venture proves to be the outsized, driving personality. That person’s quick decisions and a deep commitment can lead to stronger performance when times inevitably turn difficult.

6. Manage risk and don’t spend needlessly. Successful entrepreneurs focus on managing their risks to the point where launching a new company is not much more risky than most of the other professional choices they could make, and where the risk-adjusted return is higher. This requires skill in assembling stakeholders who can survive the loss of the assets they contribute if the worst happens.

7. Learning to lead requires a lifelong effort. Most entrepreneurs aspire to grow their small start-ups into large ventures, but different team sizes require different kinds of leadership. The most successful entrepreneurs read books, hire executive coaches, and recognize that continually learning to lead is a must.

8. Learning to sell requires a lifelong commitment. Ethical, effective sales technique is one of the most important attributes within new ventures but also one of the least common. The most successful entrepreneurs eventually understand that sales requires a balance between making compelling promises and ensuring that they can deliver on them.

9. Persistence means redefining failure. Successful entrepreneurs recognize their legitimate failures, and can talk about them reflectively. That said, they also focus on overcoming, learning, and ensuring that failure is never the end of the story.

10. Time, not money, is the scarcest resource. Successful entrepreneurs sometimesget rich, but they are also deeply motivated by the desire to accomplish worthwhile things: to create, to make a difference in people’s lives, and to leave a legacy for later generations. The most successful embrace entrepreneurship not just as a way of doing business but as a way of life.

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