Ever since working NextGenAngels, I’ve lost 26 inches from my waistline... well, not really. But I have learned a lot.
Mentoring under CEO Dan Mindus taught me some valuable lessons about managing up, enduring challenges, and what pitfalls to look for in my own ventures. Most importantly, it helped me develop what I have come to view as characteristics of a successful entrepreneur are. So what are these characteristics? If I had to sum up in 3 words: grit, brains and capital.
Grit
By grit I mean you must have perseverance and passion for long-term goals, as explored by Duckworth in 2007.
Grit is passion and perseverance for very long-term goals. Grit is having stamina. Grit is sticking with your future, day in, day out, not just for the week, not just for the month, but for years, and working really hard to make that future a reality. Grit is living life like it's a marathon, not a sprint.
- Angela DuckWorth
NextGen started as a group of young entrepreneurial leaders looking to invest in startups. The group later turned into a network of amazing personalities and diverse experiences that would lay the framework for something bigger.
Although NextGen started as a group, Dan saw the potential for more. It took some time for him to test whether this group could evolve, like a premier membership organization akin to the Young Presidents' Organization (YPO). What's more, he was passionate about the idea.
You must have the guts and dedication to be completely devoted to your goal. Incidentally, devotion to your goal is much more likely if you have a love for your intended business.
Life is too short to start a business that doesn't give you satisfaction and joy. And, through good times and bad times, you will stick with something you love. As Steve Tobak said, "If you want to become a successful entrepreneur, you’ll need to find your passion."
Brains
While relevant academic credentials are important, entrepreneurial "brains" means more than scholastic achievements.
Dan didn't just succeed with an idea, he looked at the state of venture capital and what the group could provide. Was there a market for this? What was NextGen's unique value proposition, or distinguishing feature?
It turns out that while there were other angel groups out there, most VCs were over 40 and less likely to be able to relate to the new younger generation of entrepreneurs. Some entrepreneurs today are as young as 12 years old!
What's more, Dan spent a few years mentoring under John May, an impressive VC himself, and working at CIT GAP Funds. He had experience in startup investing along with an understanding of other factors like market opportunity.
The biggest distinguishing identifier, though, is the access to the members themselves. Most are entrepreneurial leaders, with a collective experience spanning almost every industry. This is valuable because not only can NextGen provide funding (their sweet spot is between $500K to $2 million), it can also provide access to relevant industry experts and their networks.
It's obvious that biotech or software startups exist to solve hard technical problems, but I think it will also be found to be true in businesses that don't seem to be about technology. McDonald's, for example, grew big by designing a system, the McDonald's franchise, that could then be reproduced at will all over the face of the earth. A McDonald's franchise is controlled by rules so precise that it is practically a piece of software. Write once, run everywhere. Ditto for Wal-Mart. Sam Walton got rich not by being a retailer, but by designing a new kind of store.
- Paul Graham
Leadership is also a factor in all of this. Dan hired for his weaknesses. He can't do it all, and he isn't planning to. Instead, he is putting the people in place to offload the operational aspects to focus on what he does best, growing the business. As NextGen grows, so do the people around him.
So when I say brains, it doesn't mean you need to have been born a prodigy or have gone to the best schools - although these do help. Having brains means securing the necessary skills and tools to realize your goal. Also, having more than one can do wonders!
Capital
Many businesses can be started on a very small scale with a small investment. In fact, starting lean is actually a growing school of thought that began with Steve Blank, and has been popularized by Eric Ries through his Lean Startup methodology.
Then, as the business grows and you gain experience, cash flow from your business can be used for growth. In some cases, you don't need starting capital to hire other people because you might start by doing everything yourself.
NextGen started lean as a group initially, then later secured seed funding, and just recently closed a Series A round. Other startups started lean and received no angel investments. What works for other companies may not be the best way for your company.
Grit + Brains + Capital = Success
To become a successful entrepreneur, you should have a working knowledge about the business you plan to start before you start it. Common sense, combined with appropriate experience, is the necessary brainpower. Vision, follow through and attention to detail are very important. And funding, while useful, is not necessarily a barrier.
What are your three words for entrepreneurial success?