It’s one of the biggest philosophical questions in business. Are entrepreneurs born with innate talents that make them who they are? Or is entrepreneurship a skill that can be instilled, molded, and shaped. ID8 Nation asked three experts: Brad Feld is the managing director of the Foundry Group, a venture capital firm focused on early-stage tech companies. He has mentored hundreds of would-be entrepreneurs through his Techstars start-up accelerator program; Thom Ruhe is CEO of the Entrepreneurial Learning Initiative and former vice president of entrepreneurship for the Kauffman Foundation; Jeff Stum started Rooibee Red Tea beverage company out of the back of a pick-up truck.
ID8: Let’s define our terms. What is “entrepreneurship”?
Feld: Entrepreneurship is creating something out of nothing in the context of a business, creating an entirely new business or company out of an idea.
Stum: And making sure that what you’re intending to do is something that you know a lot about.
Ruhe: I’d add entrepreneurs are, by definition, individuals who put themselves at personal risk to advance their idea in their chosen market.
ID8: So in that context, what are the essential qualities of being a successful entrepreneur?
Ruhe: Entrepreneurs really need to understand their strengths and weaknesses, and have a knack for recognizing an opportunity. I think for too many people life is just a path of activity. They just see it come and go, and they ride the wave. But entrepreneurs are that rare breed that can step outside themselves, evaluate situations and see things, opportunities that aren’t obvious to others.
Stumm: Being knowledgeable is also key. And not just about your idea, but bringing it all the way through the line, how it gets commercialized. Had I not worked for a liquor distributor in Phoenix, had I not worked in field sales as a beverage supplier and learned how the distribution system works and how to manage just-in-time inventory, had I not worked at the retail level. That experience was vital. You can have the best-tasting tea product ever, but if you don’t know how to take it all the way through the line and get it commercialized, it’s just a good-tasting product.
Feld: At the end of the day, entrepreneurs have to be incredibly passionate and obsessed about the thing they’re working on.
ID8: Passion and obsession – can those things be taught?
Stumm: I think some people are just more passionate about things than others. That’s the born part vs the learned part. I think that’s a really good dividing line between the people that actually make it and the ones that don’t. But I think passion can be spoken to, and I think the good entrepreneurs will be the ones that really hear it and learn it.
Ruhe: You can expose people to the benefits of being passionate about something.
Feld: And not necessarily from a traditional classroom perspective, but from an immersive learning perspective. If you think about start-up accelerators like Techstars, they are actually immersive, fully-engaged learning experiences. Rather than sitting in a classroom and being lectured to, they’re doing experiential learning in the context of entrepreneurship. People in the program all work 18 hours a day, seven days a week together on their companies and are surrounded by mentors. Getting an understanding of how to be focused, how to go really deep on something is certainly teachable.
ID8: Does it work? How many of those who have gone through Techstars have actually become successful entrepreneurs?
Feld: If you go to Techstars.com, and click the results tab, you’ll see every single company that’s ever gone through a Techstars program, and what’s happened to them – whether they’re still active, how many employees they have, whether they’ve been acquired and by whom, or whether they’ve failed. We started our first program in 2007. It takes a long time to build successful companies, but we have a number of companies that have become meaningful businesses, employing hundreds or more people.
ID8: What is the traditional classroom good for when it comes to preparing entrepreneurs? Are there things better learned in a formal educational setting than in the real world?
Ruhe: Some things are better suited to classroom learning, such as administrative things about starting and growing a business. You don’t want to be figuring out tax compliance on the fly while you’re actually running your business. You should probably figure that out before you start. These sound like simple things, but they’re very important, and if you screw that up coming out of the gate, you can irreparably harm your start-up.
ID8: Was there something that you learned in college that was essential in helping you get to where you are today?
Stumm: Probably more than anything else is just learning the ability to network and create friendships that have meaning to them, networking with a purpose. A lot of people network just to have a great rolodex, but I learned in college just how to use relationships for mutual benefit. And that served me well certainly in a corporate setting and then as I’ve done this entrepreneurial thing. So what I learned in college was just how to build relationships. And then how to get something out of those relationships that’s mutually beneficial.
ID8: Let’s flip the question on its head. Are there things vital to entrepreneurship that you can learn only in the real world?
Ruhe: I think the best venue to really understand who you are is in the real world. I came out of college and the Air Force as a programmer analyst. And I was absolutely miserable the first year on the job. I had never given a thought about whether that was something I wanted to do. I didn’t know myself in that regard, and I left that job without another to go to. I ended up joining this entrepreneur who was starting this ill-funded operation in a dirty industrial park, but I connected with the idea of entrepreneurship. And in the first year, I secured his first government contract ever. It was worth millions of dollars, and I saw how overnight I helped this entrepreneur become a millionaire. And I made that connection of a self-directed life enabled by an entrepreneurial mindset. I was screwed after that point. I was chronically unemployable, or at least not in any company, other than very entrepreneurial companies in early lifecycles of their growth curve. Happily, I’ve never really looked back.
ID8: Can anyone be an entrepreneur?
Feld: I think anybody can be an entrepreneur, but I don’t think that everybody should be an entrepreneur. Nor do I think it’s something that people just wake up one day and say, “I’m an entrepreneur.” I don’t think that means all that much. If you want to pursue an entrepreneurial path, go start something. Go create a company, come back to the definition that we talked about at the beginning, which is you can’t say, “I’m an entrepreneur,” and then not have done anything in the process of actually creating companies.
Ruhe: I love the question of whether anyone can be an entrepreneur. And I would say a very enthusiastic “yes.” I get to interact with entrepreneurs from every walk of life – ex-convicts, returning war veterans, later-stage divorcees, senior citizens that have been retired for two decades, children that started something at the age of 10 and go on to be successful. I’ve seen it in just about any slice you can define. It’s really just about helping people unlock the beliefs and assumptions that drive entrepreneurial behavior and once they connect with that idea, they’re changed forever.
ID8: Jeff, what’s your take? Can anyone be an entrepreneur?
Stumm: I think so, I really do. Depending on what the commercial space is, anybody can be an entrepreneur if they have the “perfect storm” of background, expertise, and passion.
ID8: Are there any intangibles that are part of that “perfect storm?”
Stumm: The ability to deal with it day to day. I had lunch with a marketing partner of mine yesterday. He’s had his own marketing deliverables company for pushing 15 years. And still he said what he has trouble coming to terms with is how you can go to bed one Friday night the king of the world, and by the next Friday night, you’re barely in business anymore. Just that ebb and flow, that’s something I still don’t deal with well, but that kind of put it in a nutshell for me. When you’re the entrepreneur, you’re the one that has to deal with that. You don’t have a boss to deal with that. It comes down to you. I have a hard time celebrating success because I know that right around the corner is something else that’s going to come up and take us back down a peg. So we try to do what we do with confidence, but then with a huge dose of humility. We’re full of humility in our company — to the point of comedy, sometimes.
ID8: Can you teach the level of perseverance required to be an entrepreneur?
Feld: I think it’s very difficult to teach things like that. But I do think it’s possible and extremely important to create a context in which people who are entrepreneurs and are going through the process of creating their first company understand how important it is to try things, to fail, to go through the experience of this didn’t work, OK, what did I learn from it? Now on to the next thing.
Ruhe: There’s so much useful information in failure. Oftentimes, it can be the key to becoming ultimately successful. So working with the entrepreneurs, you say, you will fail, not a question of if, it’s only a question of when. You will fail, dust yourself off, have a wake, as Brad likes to say, and move on. Think about anybody that’s ever won a big poker tournament. In the course of winning a poker tournament, you lose a majority of the hands you play in. Yet, if you persevere, you ultimately make it to the final table and win. That’s the kind of mentality that we should try to imprint on people in their entrepreneurial journey.
ID8: At the end of the day, where do you fall: is entrepreneurship a talent or a skill?
Feld: It’s both. I think that there are, as with many things in life, different people with different innate abilities. I think there are an enormous number of things that you can learn. I think you can master the art of different elements of entrepreneurship. But great entrepreneurs know their strengths and weaknesses, and so they don’t do things solo, right? Most successful companies have more than one founder. Entrepreneurs surround themselves with other people to augment their own abilities.
Ruhe: Entrepreneurship is more of a vocation. It takes both an understanding from a purely academic sense, like if you need to understand certain basic principles of running and operating and starting a company. But that alone isn’t sufficient to be successful. It’s an applied science. You have to get out into the marketplace. You have to have your nose bloodied. You have to test your market concepts and see that you’re actually serving a market need.
Stumm: I see it as people who can see an opportunity and actually pursue it. I remember when it was clear and obvious to me that I was going to go in on a Monday and turn in my resignation. I beat myself up for a while. I mean what kind of arrogant person gives up a six-figure job with two kids at home and living a nice life in the middle of Louisville, Kentucky? But I was literally at a point where it could not not happen. It took a lot of different things. I wanted to move forward with something that was mine and try to control my own destiny. At that point in my life, it could not not happen.