You can’t just take a blood sample and determine if someone has the DNA of an entrepreneur. Still, I’m convinced from decades of observation and interaction that being an entrepreneur isn’t just something you do; it’s something you are.
So, rather than draw blood, I’ve distilled the essence of entrepreneurism into three very basic questions. Yes, this isn’t exactly a Myers Briggs profile, but I’ve tested these on entrepreneurs over the years in various forms and the results are uncanny in their consistency. They speak to what really drives an entrepreneur–something that is at the same time wonderful and perverse, in that it is so different from what drives most people.
See how you score.
Question #1 (The Start)
You’ve been contemplating starting a new business for some time. As far as you can tell, the idea seems bulletproof, there is a definite need for it, and there is a ready market for your new idea. There’s one problem, you have only six to at most 12 months (if you eliminate vacations and non-essential expenses) of financial runway to get this idea launched and to the point where it can possibly sustain you. After that you’ll be financially tapped out and will have to start borrowing from your home’s equity and possibly family. It’s also getting very hard to develop the idea while working full time for someone else.
Prioritize the following scenarios from your most likely to your least likely and exclude those (if any) that are totally out of the question:
1) Give it a few more years. When you have at least a few years of cushion then you can try to jump ship and start your newco.
2) Sustain yourself through your day job and just keep plugging away and making incremental adjustments to your new idea.
3) Close your eyes, take the plunge, do it with all of the uncertainty that it entails, and work like heck to make it happen.
Question #2 (The Struggle)
Your business has been going gangbusters, you’ve doubled in size each of the past three years, you made the Inc 5000, and you’ve even had offers to sell. But you’ve held off until you can double in size yet again. Then a severe economic downturn hits your industry. Suddenly profitability has dwindled and you’re burning through cash reserves. It’s not clear how long this downturn will last but it is clear that if things don’t pick up you will not be able to sustain your current business model at these levels.
Prioritize the following scenarios from your most likely to your least likely and exclude those (if any) that are totally out of the question:
1) Cut the heck out of costs by downsizing your operation. This will mean layoffs, cutting back on all non-essential activities,
2) Have a fire sale and try to offload the company onto a buyer, perhaps one of the folks who had already offered to acquire you.
3) Trim expenses to the bone where you can, but keep your people as long as you can, and try to ride out the storm.
Question #3 (The Exit)
You just sold your business–congratulations! After many years of hard work you’re sitting on a nice pile of cash and if you’re smart about managing your money you really do not ever have to work again.
Prioritize the following scenarios from your most likely to your least likely and exclude those (if any) that are totally out of the question:
1) Kill all of your social media accounts, change your phone number, head for a nice tropical paradise, set up an umbrella and sip your favorite beverage while you manage your portfolio and never work again.
2) Take a break from work for a while. Go on an extended vacation. Come back and do an about face and focus on all of those things you’ve been putting off for so many years, like spending time with your family, spouse, kids, etc. Stop thinking about work.
3) Pat yourself on the back for achieving your goal, rebalance your life a tiny bit, set a new goal to build your next business, start relentlessly networking to identify opportunities to collaborate and stay engaged intellectually and stay relevant.
So, here’s the funny thing about these questions. To entrepreneurs the correct answers are so plain as to make the other choices seem absurd. However, that’s not the case for people who see entrepreneurism as some sort of magical event where a rainbow suddenly emerges from the sky, leading to a pot of gold. For true entrepreneurs that rainbow may meander but it never really ends. Asking them to stop being an entrepreneur is like asking an artist to stop painting.
It’s not what they do; it’s who they are.
Here are the answers: (But you already know them, right?)
Question #1 (The Start)
Entrepreneurs are impatient when they see a good idea. While many people will work on developing the idea and waiting on the right time, all of the entrepreneurs I’ve known (myself included) will seize the opportunity and ignore much of what others see as perceived risk. Their instinct is always options 3 and then 1. In this case option 2 doesn’t even rank since it puts the entrepreneur into a perpetual state of wait and see with no plan for action. At least option 1 has a plan for action.
Question #2 (The Struggle)
Entrepreneurs have one overwhelming obligation–to keep their dream alive. Often that means doing things in the short term that are not pleasant. True entrepreneurs will answer this question in the order of options 3, 1, 2. Preserving the team, especially when they have gotten the company this far is always worth trying. But when that’s not enough they won’t hesitate to cut headcount, as painful as that may be. Having a fire sale is the last thing any entrepreneur wants to do, but it’s still a minor win in comparison the vast majority of business that simply shut down. The worst thing you can do as an entrepreneur is to run something into the ground, destroying the people, partners, and investors who helped you build it.
Question #3 (The Exit)
This question is the one that even I have been most amazed by. For the true entrepreneur the only option is option 3. Options 1 and 2 are out of the question. While there is a strong societal gravity around the first two responses, the DNA of the entrepreneur doesn’t vanish with an exit. Sure, we all want balance in our life and having the ability to define how you use you time is part of that. However, what I’ve seen is that the exit causes a deep retrospection, which results in a keen awareness of how important the entrepreneurial journey is.
Original Article by Thomas Koulopoulos
