How to lead like an entrepreneur

“I’m thinking of starting my own company!” is a comment I often hear as a subtle warning that I’m going to be asked “how to” questions. I started my company over forty years ago and have enjoyed a fun and successful journey. I’m still learning. However, at this point, the pace of my highly practiced work probably seems like an easy path for an aspiring entrepreneur. It’s not easy at all. And there have been many challenging moments along the way.

The rise in “how to do something” queries is partly related to an improving post-pandemic economy. It’s also driven by Gen Z or Zoomers, who are more interested in freedom than a gold watch as a reward for loyalty to a single employer. And it sometimes comes from naive contenders who don’t know that more than 80% of startups fail within the first 18 months.

As my friend Elizabeth Lortardo points out in her new book: Leading yourself“A recent Harvard Business Review A survey found that nearly 90% of respondents said they expected to experience a substantial degree of joy at work, but only 37% reported having had that experience. The rules of conduct for successful entrepreneurs are equally applicable to people employed by an organization. Below are five critical success factors for most entrepreneurs: passion, distinction, intelligence, sacrifice, and resourcefulness, along with their leadership implications.

Passion: the groundwater of entrepreneurship

The opening statement: “I am thought about starting”—always gives me pause. I usually reply, “Come back when it’s ‘me.'” have “Having a mindset” suggests a passing whim or a timid exploration. Beneath the emotional surface of every successful entrepreneur is an insatiable drive, zeal, and longing. It is the source of their unwavering tenacity and unwavering persistence. Employed people often live their work at work; entrepreneurs always live it. It’s not like an obsession, although some are obsessed. It’s more like a child waiting for Christmas morning. Filmmaker George Lucas said, “Making movies is hard work. It’s like being a doctor: You work long hours, very hard hours, and it’s emotional, tense work. If you don’t really love it, then it’s not worth it.”

Message for leaders: Find what your associates are passionate about and help them tie it to your team’s mission. Tell stories about what greatness looks like to your team. Be a role model of obvious passion. Remember: making a difference can be much more motivating than making a living. So what do you do if you have associates who seemingly aren’t interested in anything? Take an honest look at your selection process. Change people or change the people!

Distinction: The Market Differentiator

Successful entrepreneurs look for market gaps filled with opportunity: products that solve problems, solutions that have meritorious appeal, and services that meet unique needs. Uniqueness creates a story that fosters buzz that grows a reputation. Distinction helps answer the question: Why will customers want to do business with me? A couple decided to start a pizza business. He was a wine connoisseur; she loved cooking gourmet pizza. They opened a restaurant and closed it within months. Their passion for their product wasn’t enough. There were already two pizzerias nearby. Their offering was good, but it was far from a unique value proposition. They couldn’t tell a story that was out of the ordinary. In short, their distinctiveness is a virtue only if it’s one that their target market values.

Message to leaders: Train your associates on how to better market their skills and talents to you and others. Encourage associates to constantly look for ways to improve their roles, and help them “pitch” the merits of their suggestions. Coach them to think like salespeople, not just workers. Ask a colleague to let their associates interview for a position and get feedback on their selling practices. Remember: benefits count; features bore.

Intelligence: source of preparation

Intelligence is not about quick thinking, but about reliable information about the market you are targeting. Intelligence helps answer the question: who will do business with me? It involves doing demographic studies, competitive analysis, an honest SWOT analysis (Google it), assessment, plus marketing, social media, and PR requirements. It is gained by interviewing successful startups in the same space but in different markets. Too often, a budding entrepreneur starts with a website and business card design without giving much thought to how to drive traffic to their website or create contexts to provide a business card. Branding elements should be well-thought-out responses to market research. Intelligence helps answer the question: how will I serve my target market?

Message to leaders: Share with your associates everything you know about your customers. Give them detailed updates just as you would your superiors. Help associates gain and maintain a clear line of sight with customers. Make sure they value their role and understand that they are responsible for meeting customer needs rather than simply performing tasks.

Sacrifice: the fuel of entrepreneurship

I was attending a dinner at an association meeting. Half of the group of twelve people owned their own companies; the other half worked for large companies. The topic was popular television shows. The employees chatted about television trivia; the entrepreneurs had not seen any of the shows. Entrepreneurs are not aware of work hours or even work days. Their work pace is determined by what needs to be accomplished, not by the hands of a clock. It’s not that they are workaholics; their quest for results drives them, and they are willing to sacrifice to achieve them. Successful entrepreneurs see constant change as their advantage, not their adversary. Their orientation is, “I will adapt quickly while my competitors wring their hands.” They stayed focused on a goal, not on sideshows or rabbit holes. Sacrifice helps answer the question: How much am I willing to invest to succeed?

Message to the leaders: Foster such deep pride in their work that associates feel so energized by what they do and the difference they make that they take their mind off leaving. Offer sincere and frequent affirmations and celebrations. Obviously, you must follow labor laws, but genuine engagement is about feeling inspired, not enslaved. Demonstrate your inspiration and invite your associates to join you.

Resources: Tools for trust

Successful entrepreneurs take risks. Not reckless risks, but well-thought-out risks. Risk-taking comes from trust, and trust comes from the comfort of knowing that you have the backing of others. Resources include a network of people who can give you candid advice, like your own “board of directors.” This means a carefully crafted business plan and a smart staff handpicked for valuable talents who shore up your weaknesses (not your brother-in-law because he works cheap). Resources include a line of credit, not massive debt. My business partner, John Patterson, likes to say, “Confidence is the arrogance of someone wise, humble, and wealthy—or at least someone convinced they are!” The comfort John describes only comes from a pool of relevant, respected resources.

Message for leaders:An important part of your role as a leader is to provide associates with resources that enable them to succeed. This includes training them to be resourceful and always on the lookout for assets and methods that reinforce their excellence. It means helping them to “think like owners,” not like worker bees. It includes treating associates’ failures as valuable learning opportunities, not reasons for blame and blame.

Being an entrepreneur can be a fun and happy lifestyle, but the joy comes from success, the fruit of discipline, organization, planning and investment, not just from an exciting vision or a clever idea. It comes from a hunger for freedom to order one’s life in a meaningful way. The next time you meet a successful, confident entrepreneur who swims gracefully through life like a swan on a lake, never forget that there is a very different landscape beneath the surface of the water.