1. Most people spend their money to get the most utility – fun, food, whatever. Entrepreneurs spend their money to make the most money. This one habit pretty much accounts for everything, and it’s a big reason why the rich get richer, and the poor stay poor.
- Financial restraint. The budding entrepreneur delays their own gratification to maximise return. If you want to see a failed wannabe entrepreneur, look for one who’s spending frivolously (my own co-founder famously wanted to buy us both company cars in our first month of business; I declined). Well after they’ve made a fortune, most self-made wealthy people remain comparatively frugal; their lifestyles may be lavish, but they’re almost always spending much less than they earn.
- Develop skills that compound. Entrepreneurs even think of their own skills as an investment; whatever time they put in should have the greatest possible return. For example: creating software, leading others, spotting future trends. They are typically self-taught, and diligently so. They work to make themselves the type of person who would be wealthy.
- Own assets that compound. The sweat of your own brow will rarely make you rich. As entrepreneurs soon realise, the most efficient vehicle is generally ownership of a company; your own efforts combine with others. Bill Gates may be a smart kid, but he was never going to earn $50 billion from freelance programming. For this reason smart entrepreneurs hang on to every precious percent of ownership as if it were their last breath.
- Time and attention conscious. Time and our attention are the only truly finite constraints – incalculably precious and easily squandered. Successful entrepreneurs are absurdly conscious of the fact, and tend to become highly organised, intolerant of inefficiency and laser focused. Many famous figures famously wear the same outfit every day (Zuckerberg, Jobs) claiming that anything else is an unnecessary waste of their attention.
- Positive realists. To make smart gambles – and that’s what becoming rich entails – you need an honest appreciation of odds that few possess. Many of life’s truths are uncomfortable, complicated, or counter-intuitive, and it takes real effort to discern otherwise. But in the absence of perfect information, it helps to see the world in a positive light. Pessimists make poor entrepreneurs.
2. “The conventional view of why people become entrepreneurs is dead wrong. There are three drivers for why people become entrepreneurs.”The Three Drivers:
- Problem Solver: They recognize something is wrong or broken, they know how to fix it and they know how to fix it better than anybody else. It irritates them that nobody has not already bothered to fix it.
- Autonomous: They have a sense of autonomy…a sense of wanting some control over what they do in their lives.
- Authentic: They do not want to have to check-in their values at the front door every time they go to work. They want the company they work for to reflect their values, personality and principles.
People get confused when they see entrepreneurs make a lot of money. They think because entrepreneurs have made money, that was all they desired from the beginning. The three drivers have very little to do with money. Rather, making money is a consequence of having a sense of a problem you want to fix, a sense of autonomy and a desire to be authentically who you are.
Entrepreneurs see something that needs to get done…a product that must be offered… a problem that must be solved…and they feel so deeply about these that they can face the opposition when starting a business. They are; a problem solver, autonomous and authentic.
3. Quantitatively successful entrepreneurs — are 100% comfortable free climbing (in business). Crossing the tightrope without a net. This is not to say successful entrepreneurs don’t perceive risk, or that they take inordinate amounts of risk. Or that they don’t worry all the time they won’t make payroll, or will fail, or not make it. Not at all. They see all of this. In fact, in my experience at least, they are highly risk averse where they see risk they cannot overcome.It’s just that successful entrepreneurs see the Other Side; they see the way across.