The 12 Characteristics of Successful Entrepreneurs

After surveying the academic and business press, we narrowed the key characteristics of successful entrepreneurs — personality traits, backgrounds, and circumstances — down to 12. We’ll also share which of those characteristics you can acquire if you don’t already have them, and include a scoring table so you can rate yourself against all 12.

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Winning Personality Traits and Skills

1) Driven by Passion

Successful entrepreneurs are passionate about their business and stubbornly driven to succeed. They have a “calling.” They work long weekends and into the night, give up all but necessary expenditures, and press on through severe setbacks. See this video for an amusing illustration of that extraordinary dedication. Apply this enthusiasm to the activities below.

2) Adapting by Accommodating

It’s not only persistence and resilience that account for their success, but also their ability to adapt — to recognize and respond to rapidly changing markets, technologies, suppliers, and unexpected events. Examples:

• The shift to SaaS required extensive, top-to-bottom revisions to legacy desktop apps. Many organizations that failed to make this change lost market share, were acquired, or closed their doors.
• In the face of abrupt market changes, a young company can suddenly see sales decline or investor interest wane. Some respond by ruthlessly cutting back overhead. Others find new markets. Those who freeze in the headlights or plow ahead, business as usual, become casualties.
• Adaptation doesn’t stop once a company starts generating revenue. It takes new skills to carry a startup into rapid growth beyond that milestone. See Grow Fast and Profitably for what changes and when.

3) Networking the Room

Networking is vital—80% of startup managers credit their success to it. Create opportunities to connect face-to-face with investors, mentors, and clients through alumni groups and industry associations, using persistence and creativity to build relationships.

Communicating effectively in those settings takes clarity and confidence. See this Science of People blog for tips on how to exploit meet and greet opportunities. Beware, however, that the pressures under which entrepreneurs operate can tempt some to shade the truth when promoting their venture’s merits. An interesting Harvard Business Review article discusses why and when networking enthusiasm can edge into misrepresentation.

4) Fast, Effective Decision-Making

Strong entrepreneurs make confident decisions under pressure by gathering key facts, logically weighing options, and acting decisively rather than waiting for perfect information. For example, they’ll jot down pros and cons in two columns, then choose a course of action.

5) Financial Management Skills

Many KPIs (key performance indicators) are financial and operating metrics. Example: quarterly sales growth and the number of qualified engineers hired per quarter. Knowing how to interpret their meaning enables the entrepreneur to plan for the future, manage day-to-day cash flow to stay afloat, and attract funding. This NetSuite blog explains the basics of managing a business through its financial KPIs.

For background on how KPIs affect investor interest, see our article How Investors Value Companies.

6) Mounting the Podium

Once in networking environments, you must convince stakeholders of the value of your vision. Develop this skill through public speaking and debate training—Dale Carnegie’s time-tested programs remain effective for good reason.

7) Ever the Optimist

Pessimists struggle to see solutions—they focus on threats rather than on hidden opportunities. Because of their risk-averse, sometimes even dour attitude, they have difficulty attracting employees, investors, and family support. In a word, successful entrepreneurs are happy warriors.

Young, High-Risk Ventures Need General Managers
A company entering a new industry or another risky venture thrives under the leadership of a general manager. They:

• Inspire and motivate others towards a common goal.
• See the big picture and anticipate future trends.
• Take calculated risks in pursuit of long-term goals.
• Quickly adapt to changing circumstances.

In such early-stage companies, leaders with deep industry expertise may be less effective than those who can manage people while navigating uncharted territory. Think of a special ops platoon leader who improvises when his terrain map proves to be flawed.

Lower-Risk Ventures Need Specialized Knowledge
In contrast, ventures operating in established industries — where innovation is relatively scarce — rely more heavily on managers with specialized knowledge about the business. In this case, the successful entrepreneur would have extensive experience in marketing, production, and supply chain management. Example: the purchasing VP of a specialty paper manufacturer.

8) Learning From the Wreckage

Most entrepreneurs fail at something. Those who succeed extract something usable from it and don’t repeat it.

That requires two things. The first is tolerance for criticism — from partners, investors, employees, and customers, much delivered without tact, some of it even wrong. Entrepreneurs who treat objections as disloyalty stop hearing what’s useful when the market is trying to tell them something.

The second is perspective: the ability to tell the difference between a bad decision and bad luck. A product that failed because the market wasn’t there is a different lesson from one that failed because you shipped it late. One way to learn the difference is to write down what you expected to happen before you find out what did.

Serial entrepreneurs are not simply people who like starting companies. They’re people whose second attempt is better informed than their first.

Traits alone aren’t sufficient. Successful entrepreneurs combine their drive, adaptability, and optimism with key skills like networking, industry-specific knowledge, and financial management. They also match their skills to the type of business they’re building. Their background and circumstances can help too. Read on.

The Entrepreneur’s Background & Circumstances

Personal traits and skills aside, background and circumstances also shape outcomes.

9) The Ideal Age

A surprise to many, the entrepreneurs most likely to succeed are, on average, about 45 years old, according to Harvard Business Review. However, it wasn’t a surprise when HBR also found that the average age of entrepreneurs who succeed varies by industry. For software, it’s 40. For oil and gas, and biotech, it’s 47.

In fact, each age brings certain advantages and disadvantages:

• Younger individuals often bring energy and adaptability, but may lack industry knowledge and connections.
• Mid-career managers typically have more professional experience and financial resources than their younger counterparts, which are clear advantages when launching a new business. And they may still retain much of their youthful energy and enthusiasm.
  
• Older players can bring extensive expertise and good judgment. (As Will Rogers said, good judgment comes from experience, and much of that comes from bad judgment.) They also often have well-established networks. Yet they may not tackle the day’s challenges as energetically, fail to keep on top of tech developments, and not adapt as rapidly to change.

If you’re younger or older than mid-40s, consider whether your age aligns with your company’s stage, industry requirements, and timeline to profitability.

10) Strong Family Support

Domestic partners can be valuable assets, offering emotional support, creative ideas, and practical assistance with tasks such as bookkeeping and marketing.

But if they don’t buy into your aspirations (for instance, they’re anxious about the risk and lack of financial security), then pursuing business goals while facing tension at home becomes stressful and exhausting. Instead, share your plans with them in advance and seek their feedback before proceeding.

Family support also matters for teenage entrepreneurs. Many benefited from parents who encouraged experimentation. They introduced their children to new experiences, shared knowledge about how things work, fostered curiosity, and helped set up small income-generating ventures such as lawn mowing, painting, and car detailing.

11) Education & Experience

By now, it’s clear that even prestigious college degrees aren’t mandatory. A large number of top founders, such as Bill Gates, Steve Jobs, and Mark Zuckerberg, succeeded without one. Rather, deep industry experience and market knowledge often matter more. Experience helps you build a capable team, choose the right trade shows, and identify reliable suppliers. Investors understand those advantages.

12) Financial Stability

Set aside enough savings to cover business losses and living expenses until your startup is self-sustaining or can attract outside funding. Plan for a year.

And juggling a day job with a new venture can divide focus when it’s most needed. Commit fully when you’re financially able. Until you can, very few investors will find your pitch persuasive. When you take the leap, avoid burning bridges: you may need to reenter the nine-to-five world.

For where to spend time seeking funds, see our article on Which Investor Fits Your Company’s Stage.

Background & Circumstances Takeaway

A frequently successful combination is being mid-career, having a supportive family, relevant industry experience, and the financial resources to test a “minimum viable” product or service while meeting life’s necessities.

Do You Cut It?

Now, honestly assess how well you match some of the traits and behaviors associated with success. Score yourself on each item from 1 to 5 (5 = strong). For accuracy, also ask someone who knows you well to rate you, then average the two scores.

No.	Item	Score
1	I spend time thinking about how to improve the potential of my business idea
2	People would describe me as being persuasive and clear both verbally and in writing
3	I can point to instances of adjusting quickly and appropriately to changing circumstances
4	I’m energized by the thought of the entrepreneurial lifestyle and seeing how my ideas fare in the marketplace
5	People who know me think I’m generally optimistic
6	I have a broad network of friends, associates, mentors and others to call on for support
7	I make decisions efficiently, weighing both quantitative and subjective factors, and I can make decisions with incomplete data
8	If I launched a new venture, I’d have my family’s support
9	I have the financial resources to weather a protracted period of reduced or no income
10	I have the experience, connections and education relevant to my venture
11	I am open to feedback and criticism, and as a result can make the necessary mid-course corrections
12	I try not to make the same type of mistake twice. Said another way, I make a point of learning from my mistakes
13	If I’m not the ideal age for an entrepreneur (mid-forties), I know what the downsides are and can consciously manage them
14	I’m good at finding productive team members and delegating tasks to them

A total score of 55 or more out of a maximum of 70 bodes well, although a very low score on any individual item merits closer attention. The good news is that you can actually develop at least half of the 12 desired characteristics above.

Conclusion

Successful entrepreneurs are different. They take leaps into the unknown even though they may return with nothing to show for it but the experience. Some even leap again and again before finally prevailing… or not. It’s an exciting and demanding lifestyle, but obviously not for everyone. Most people actually prefer a stable, fulfilling career and family life.

For those who do take the leap and make it work, the payoff can arrive years later, at sale. That’s what we do — advise mid-market technology owners on selling the companies they built.

The Key Predictors of Startup Success
Guess which few factors account for half the successes

 

Some Industries Welcome Startups
Others, not so much

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