COULD anyone have predicted the amazing success that Bill Gates, Jack Ma, Anne Wojcicki (founder of biotech firm 23andM), and Byju Raveendran (founder of ed-tech firm BYJU’S) would see when they were just starting their businesses? What does it take to succeed as an early-stage entrepreneur? How can one decide whether they have what it takes to become one? In the last couple of years, I have worked with more than 400 early-stage entrepreneur, and I have come to believe that entrepreneurs are made, as opposed to born.
Here is what I think it takes to be a successful early-stage entrepreneur:
1. Intelligence: ability to absorb and process information fast, and communicate well.
2. People skills: understanding your own and other people’s emotions, and ability to influence self and others.
3. Hard work: which implies discipline, grit, hunger and the ambition to build something big.See also Aviation startup accelerator launched to attract innovations to local industry
4. Deep knowledge: of a sector, a function, a technology or business in general.
5. Network: who you know, and how you can connect with others in the ecosystem.
6. Bias to action and agility: execute quickly and keep experimenting till you get something to work.
7. Safety net: personal savings, other family income or just a low burn rate will keep you going for longer.
8. Luck: there are thousands of people who have all the above but only few become unicorn founders.
Only the first two success factors, intelligence and people skills, are primarily, although not exclusively, nature. The third one, hard work, is both nature but also how life shapes your personality. The next two on the list, knowledge and network, can be acquired. Yes, they do depend on the socioeconomic status of the family you were born in. However, if one is intelligent and hardworking, it is likely that they will eventually acquire knowledge and build a network through their education and work experience.
The crucial factor and how one can acquire it
To illustrate factor number 6, bias to action and agility, consider the stories of Marc and Emma, both early-stage entrepreneur founders I’ve worked with. They both were top university graduates with about 10 years of work experience in large multinational companies. The only difference was that Emma had also worked at an early-stage startup for about a year. They both entered our program without a co-founder, and without a business idea. Two-and-a-half months later, Marc had produced a detailed 80-page business plan based on the extensive desktop analysis. Meanwhile, Emma had found a great co-founder (after “testing” two others), iterated three business ideas by building and testing minimum viable products with real customers, and was getting her first investment.
Contrary to all other success factors in the list above, we are all born with a natural bias to action and agility; which we then lose during several years of education in a schooling system and work environment that had been designed for the 19th-century industrial era. In Peter Skillman’s design challenge, six-year-old kindergarteners always outperform Fortune 500 executives, engineers, and top MBA students. This is because kindergarteners do not spend time analyzing, honing ideas, strategizing, and planning. They immediately start experimenting and keep trying different designs until they find what works. Kindergarteners “prototype and test”, exactly like a successful early-stage entrepreneur. So, the question is: How can this crucial skill be reacquired? The best way is by starting your own company, working for a startup, or being part of a truly entrepreneurial department within an established company.
The sky’s the limit
Number 7, the safety net, is another critical success factor and one that people rarely talk about. Roy quit a successful corporate job and started building his startup in our programme, partly because he wanted to have impact and be independent, and partly to get away from a soulless job. Things were going great for a few months. Then the market turned, and tension built up between him and his co-founder. Roy and his wife had two little kids and a mortgage. Her income was not enough to provide for the family, and it could take another year before Roy’s startup started paying a meaningful salary. He decided to quit and go back to the corporate world. Now, in hindsight, Roy thinks that if they could endure another six months of low income, they would have certainly had a breakthrough.
Building a company from the ground up is already very challenging, so worrying about paying the bills makes it even more difficult. Most successful entrepreneurs had a decent personal runway; from their family, or savings from a successful previous career, or their spouse’s income, or simply due to a low burn rate. Luck is, by definition, outside our control. But if we see failure as an opportunity for growth, the longer we try for, the higher the chances we succeed. And that’s exactly what the safety net offers.
How have we, at Antler, been helping entrepreneurs with the success factors listed above? First, we help them build their co-founding team and become part of a trusted network of advisers and investors (it takes a village to grow a startup, to paraphrase the known African proverb). Second, we have been motivating our founders to exhibit bias to action and agility by validating their business ideas in the real world by building prototypes and testing them with customers. Thirdly, we help them beef up their safety net by investing in their newly formed startups.
In the course of interviewing thousands of candidates during the last two years, we realised that there are many professionals who have everything it takes to become a successful entrepreneur; but whose safety net does not suffice to justify quitting a financially rewarding full-time job, without having the basics (team, idea, investment) in place. So, we asked ourselves how we can remove this barrier to entrepreneurship and enable more people in Singapore to start up? Our response was to complement our regular (full-time) programme with an executive (part-time) programme; giving people with full-time jobs the opportunity to build a team, find and validate a business idea, and get an initial investment, before taking the leap.
Singapore has a job market with plenty of financially rewarding opportunities, a very high cost of living, and a culture that deeply values stability and security. These three factors lead to high-risk aversion and deter many from going into entrepreneurship. But as a candidate I was recently interviewed told me: “I decided to build my own startup because it is an opportunity with limited downside and unlimited upside; if it doesn’t work, I’ll go back to corporate after a couple of years, a bit poorer in the short term but wiser and stronger in the long term. But if it does work, the sky’s the limit. Plus, the pandemic has created so many problems that can be viewed as business opportunities for those who attempt to solve them.”