The Most Valuable Trait for an Entrepreneur

Is there one trait, above all else that is essential for an entrepreneur?

In my view this is the ability to admit to oneself ‘I don’t know’. The ‘I don’t know’ forms the basis of openness, humility and bestows upon us an agility in thinking. The minute we think we know, ego ensues.

This openness and the ability to admit one’s failures is critical for all startups. Startups fail for a number of reasons : poor vision, a dysfunctional team, a deficient product, inadequate cash, a lackluster marketing strategy and so on. But what prevents these risk taking entrepreneurs in making corrections? Is a lack of resources? No. In the age of information, there are plenty of resources available that can help course-correct. What prevents a group of intelligent, talented and risk taking adventurers from using these resources?

They think they know.

An entrepreneur is more akin to a scientist conducting an experiment based on a hypothesis. We do not know if our product or service will work. We can’t gauge demand. We do not know customer preferences. Market surveys do not tell us what customers really want. They only tell us what potential customers think they want. Eric Ries in his book, ‘The Lean Startup’ quotes this example:

Zappos is the world’s largest online shoe store, with annual gross sales in excess of $1 billion. It is known as one of the most successful, customer-friendly e-commerce businesses in the world, but it did not start that way.

Founder Nick Swinmurn was frustrated because there was no central online site with a great selection of shoes. He envisioned a new and superior retail experience. Swinmurn could have waited a long time, insisting on testing his complete vision complete with warehouses, distribution partners, and the promise of significant sales.

Instead, he started by running an experiment. His hypothesis was that customers were ready and willing to buy shoes online. To test it, he began by asking local shoe stores if he could take pictures of their inventory. In exchange for permission to take the pictures, he would post the pictures online and come back to buy the shoes at full price if a customer bought them online.

This is decidedly different from market research. If Zappos had relied on existing market research or conducted a survey, it could have asked what customers thought they wanted.

The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

This approach of experimentation, as opposed to thinking ‘I know what they want’ underlines an important aspect of flexibility in one’s thinking.

Nearly all successful business have this in common – they adapt very quickly to changes in technology trends, market needs and customer desires. And the root and core of this adaptability is to have a flexible mind – to be able to honestly tell ourselves “We really do not know what the future will look like” , “We do not know what consumers may want in the future”

A classic example of this is described by Tim Harford in his excellent book Adapt’.

In 1931, the British Air Ministry sent out a demanding new specification for a fighter aircraft. The immediate response was disappointing: three designs were selected for prototyping, and none of them proved to be much use. Even more remarkable than the initial specification was the response of the ministry to this awkward failure. [..] when Supermarine approached the ministry with a radical new design, an enterprising civil servant by the name of Air Commodore Henry Cave-Brown-Cave decided to bypass the regular commissioning process and order the new plane as ‘a most interesting experiment’. The plane was the Supermarine Spitfire.

Harford, Tim. Adapt: Why Success Always Starts with Failure (p. 81). Little, Brown Book Group. Kindle Edition.

The rest of course, is history. The Spitfire single handedly won the Battle of Britain and managed to keep the German Luftwaffe at bay. This was perhaps the single most important invention to help Britain win the Battle of Britain (the other perhaps being the radar). The then Prime Minister Winston Churchill, paying tribute to the spitfire pilots had this to say:

‘Never in the field of human conflict has so much been owed by so many to so few.’

Winston Churchill

Hartford goes on to say this:

It is only a small exaggeration to say that the Spitfire was the plane that saved the free world. The prototype cost the government roughly the price of a nice house in London: £10,000.

Harford, Tim. Adapt: Why Success Always Starts with Failure (p. 81). Little, Brown Book Group. Kindle Edition.

How was the Spitfire so successful? And how was it so cheap? As entrepreneurs, can we plan such technological breakthrough?

But the idea that we can actually predict which technologies will flourish flies in the face of all the evidence. The truth is far messier and more difficult to manage.

That is why the story of how the Spitfire was developed against the odds offers a lesson for those of us who hope technology will solve the problems of today. It was developed in an atmosphere of almost total uncertainty about what the future of flying might be.

In the mid-1920s, it was widely believed that no aeroplane could exceed 260 miles per hour, but the Spitfire dived at over 450 mph. So it is hardly surprising that British air doctrine failed for such a long time to appreciate the potential importance of fighter planes.

It is easy to say with hindsight that official doctrine was completely wrong. But it would also be easy to draw the wrong lesson from that. Could ministers and air marshals really have predicted the evolution of aerial combat? Surely not. The lesson of the Spitfire is not that the Air Ministry nearly lost the war with their misconceived strategy. It is that, given that misconceptions in their strategy were all but inevitable, they somehow managed to commission the Spitfire anyway. The lesson is variation, achieved through a pluralistic approach to encouraging new innovations. Instead of putting all their eggs in what looked like the most promising basket – the long-range bomber – the Air Ministry had enough leeway in its procedures that individuals like Air Commodore Cave-Brown-Cave could fund safe havens for ‘most interesting’ approaches that seemed less promising.

Harford, Tim. Adapt: Why Success Always Starts with Failure (p. 85). Little, Brown Book Group. Kindle Edition.

The lesson as Harford says, is variation through a pluralistic approach to innovations. We need to admit to ourselves – we just don’t know the future. This openness helps us respond of the needs of the present, without imposing our own moral judgements on it. This helps us experiment by testing our assumptions about the market, about technologies and customers.

As I said earlier, the opposite of such an approach in hubris – the idea that ‘I am an expert and I know everything’. We must avoid this psychological trap at all costs. And this forms the basis of success – both at the personal level and at the level of the organization.

How do we, then go about safeguarding ourselves against hubris?

We embark on a journey of self-discovery. Many of us derive our identities from our job functions – as the CEO, as the lead of a project and so on. This gives us some meaning, some status and some pride. The risk with gaining meaning with titles and past achievements is that it cements us to that position. We need to maintain this and constantly prove to others that we are indeed worthy of this title. On the journey of self discovery, we do not stop at titles, or successes or awards. We move past them to understand – who I really am and what makes me truly happy.

This may sound all philosophical, but it hits the core of why we succeed or fail. Self discovery implies that we do not stop asking questions in life. We base our life on curiosity – of the outer and inner world. When we are promoted to a CEO and people around us are slapping our backs, we stand aside and ask ourselves in great honesty – “Does this really bring me happiness?”. Most often than not, this happiness is fleeting. It is gone as quick as it comes and in order to prolong it, we have to hold on to the identity – the shadow – the fact that I was promoted.

Abandoning all transitory things and simply basing one’s life on curiosity – the thirst to know – is what keeps us open and flexible. What we thought we know, may change tomorrow. What we thought unfalliable, can break down. What we considered to be permanent, can be washed off in a second. Basing one’s life on the inner journey, with curiosity as its cornerstone, helps us stay every fresh, ever open. This in my view is the most valuable trait that any entrepreneur, or for that matter, any human being can have.