This article was originally published on Salesforce, and written by Laura Norman.
Troy Henikoff is an entrepreneur, venture capitalist, lecturer at Kellogg School of Management, and founder of Techstars Chicago. I recently had the opportunity to talk to him about whether the ability to become a successful entrepreneur is predetermined at birth.
Q: Troy, you’ve started several successful companies. Did you always know you wanted to be an entrepreneur?
No! I got into entrepreneurship by mistake. Like many people, when I graduated from college I wasn’t exactly sure what to do next. At the time, PCs were just becoming a legitimate business tool. I’d seen a tech company in Boston I was interested in, but there wasn’t anything like it in Chicago. A friend suggested that I should leverage my previous couple of summers of programming and start a consulting company myself.
Q: How did you get from there to where you are now, teaching the next generation of entrepreneurs?
After building and then selling that first company, I started several more. I picked up a lot of knowledge along the way and decided I wanted to help other entrepreneurs. That’s when I began teaching entrepreneurship at Northwestern and the University of Chicago. I also started a venture firm to invest in great people and ideas, and started Techstars Chicago, an accelerator program that mentors great startup talent.
Q: You’ve worked with a lot of great entrepreneurs. What do you think: are they born or made?
Although you can learn a lot about what it takes to start a successful business, there are some skills that you just have to be born with. There’s a certain type of personality that does well as an entrepreneur, and that just can’t be taught.
Q: What are the essential qualities of a great entrepreneur?
I’ve thought a lot about this during my years teaching and working at Techstars. I have seen the most successful entrepreneurs have three buckets of skills :
- The right DNA. There are some innate traits that make it easier to become a successful entrepreneur. You need to be very comfortable with uncertainty. You need to have a bias toward action. You need to have unwavering optimism. It’s not that you can’t be successful without these traits, but it will impact the way you make decisions and operate, and to be a successful entrepreneur you need to be able to manage the adversity that you will encounter every day.
- Book smarts. This is probably the easiest skill to develop, but you can’t be successful as an entrepreneur unless you learn the basic fundamentals of running a business. It is critical that you understand basic financial statements like Income Statement, Balance Sheet and Statement of Cash Flow. You need to learn the mechanics of your particular industry, etc. There are things you can learn through books, apps, online classes, and more.
- A network of mentors. There are some skills you need to grow a company that you can’t learn from books, but only from others. Experienced mentors can help you parse the details of a particular problem and figure out how to respond. Building on their own experience, they can help you consider all the aspects of a situation. Venture firms talk about “smart money,” which is having people on the board of a startup who’ve been through it before.
- A lot of practice. There are other skills that you can only master with practice. Pitching your business is one of these – practice, practice, practice. It doesn’t matter how many videos you watch; until you’ve been in the hotseat — dozens of times — it’s hard to be good at it. Practice helps you become good in a stressful environment. Negotiating, problem solving, understanding your customer – all these are skills that take time to master and there is no substitute for practice!
Bring all four of those together you will have an amazing entrepreneur.
Q: How can you tell if someone has the right DNA?
I don’t have a particular formula for telling whether or not someone has the right DNA, but you can ask open-ended questions that give a picture of how that person handles adversity, risk, and uncertainty. For example, you might ask someone to describe his or her ideal vacation. Someone who’s more risk-averse will have every detail rigidly planned, maybe even by someone else. That might be a great person in my company, but it’s not my entrepreneur. I’m more interested in the type of person who will go on vacation with only a rental car and the first night’s lodging booked. That person is looking for adventure and definitely comfortable with uncertainty!
Q: What’s the best way to pick up the tools of the trade?
I advise my students to find a business that excites them and a company where the leadership is whom they want to learn from. Then get in that door anyway they can, even if it’s sweeping the floors. The thing is, you’ll be so good at sweeping the floors that you won’t be doing it for long. Soon you’ll be helping with marketing, and before long you’ll be heading the whole department. If you’re good you’ll get more, more, more. And all that time you’ll get to learn from the people you want to learn from. Obviously this doesn’t happen at a big corporation with a lot of bureaucracy for moving people up the ladder, but it happens every day at startups.
Q: What’s your advice to people who are considering going back to school?
It really depends on the portfolio of tools you have. For most people, going to school for school’s sake isn’t going to help them be a more successful entrepreneur. After I started my first company I realized I needed to know a lot of things that hadn’t been on the syllabus when I got my engineering degree. I went back to business school and took the 5 or 6 classes I needed, but I didn’t finish the degree. There wasn’t going to be a promotion for me at the end of it all, but I’d picked up the tools I needed to take my company to the next level. While it’s a great resume-builder to finish the degree if you have the time and resources, it’s not a requirement. In general, you learn best through experience. It’s more valuable to wrestle with a problem than to read about it in a book.
Want to hear more of Troy’s entrepreneurial insights? Join us at our Chicago popup event on April 11 and get hands-on advice for growing your business. Meet with experts from Salesforce, along with partners Facebook, Zenefits, Sage, Chase for Business, RelationEdge, and more for a powerful half-day growth extravaganza. You’ll get hands-on advice for running your business, working more efficiently, and building close connections with customers. And best of all, it’s FREE. Learn more and register here.