When you think of some of the most successful entrepreneurs on the web (Evan Williams, Jason Fried, Marc Andreessen, Caterina Fake, Elon Musk, Niklas Zennstrom, and Arianna Huffington), what similarities come to mind?
Yes, they all have built successful companies, but what other commonalities do you see?
At first glance, these successful entrepreneurs don’t have much in common. The list contains both men and women, all with different levels of education, differing nationalities, and from different regions of the world.
However, when you dig a bit deeper, you see that they share many commonalities with other successful entrepreneurs.
You have to be somewhat smart
By no means is a college degree required in the entrepreneurial world. Some of the most successful entrepreneurs, including Michael Dell and Bill Gates, don’t have college degrees, but have made billions.
I know they are rare examples, but another candidate who has done well is Jeremy Schoemaker. He hasn’t made billions like Bill or Michael, but he has made millions.
Jeremy never graduated college and has always had a passion for computers. He was a security admin for Wells Fargo, and like most entrepreneurs Jeremy hated working at his 9 to 5 job. So he decided to start a business that revolved around ringtones.
Because of his knowledge of the web and cell phones, Jeremy figured out how he could pull in 6 figures a month through a ringtone website. Formal education was not responsible for his success; rather, he was smart enough to figure out what consumers wanted. Once he had enough eyeballs on his website, he tested various monetization methods, which helped him get to 6 figures a month in revenue.
You don’t need a college degree to be a great entrepreneur; you just have to be smart enough to make money and run a business. A college degree might not hurt, but street smarts can be a more valuable asset.
You have to be scrappy
Unlike most of his competitors, Kamran walked away with a good chunk of money from his acquisition because he raised under $2 million in financing, while some of his competitors raised over $30 million.
Kamran’s scrappiness didn’t start with PriceGrabber. He had that quality since he was young. When Kamran first immigrated to the U.S., he did whatever it took to succeed. Nothing was beneath him — he even tried selling knives door to door.
Are you willing to do whatever it takes to succeed?
You have to take calculated risks
Your business is going to change, whether you like it or not. New opportunities will come your way as time goes on, but it is up to you to seize them.
If you are like most entrepreneurs, you’ll end up trusting your gut. But if you have what it takes to be a great entrepreneur, you’ll make calculated decisions.
A few years ago, Tony Conrad launched a company called Sphere, which competed directly with Technorati. Within a few months of launch, Tony took a calculated risk and switched Sphere’s business model to be centered around widgets. Although the move was bold and risky, it was smart because that market was underserved compared to the blog search engine market.
In a short period of time, websites like The New York Times, AOL, TechCrunch, CNN, and 20,000 other blogs were using the Sphere widget. This mass adoption caused Sphere to receive over 1 billion page views a month, which eventually led to AOL acquiring the company.
You can’t be afraid to roll the dice
As I’ve said, you have to be willing to take calculated risks, but you also have to be willing to roll the dice.
Case in point: James Hong was the founder of a company called Hot or Not. At one point, the company charged for premium accounts, which accounted for $500,000 in monthly revenue.
After a few years or running Hot or Not, James and his co-founder decided to remove their paid subscription model and rely solely on revenue from advertising and virtual gifts. Within the first month of doing this, the company saw a 60% increase in traffic and was lucky enough to break even.
Although James reverted back to a premium subscription model due to spam, he was willing to roll the dice when he needed to. The company did very well, and he ended up selling it in 2008 for around $20 million.
You need to be cheap
Andy Liu isn’t as well-known as fellow entrepreneurs Evan Williams or Marc Andreessen, but he is very successful nonetheless. He sold his first company, NetConversions, to aQuantive in 2004, and his current company, BuddyTV, is dominating the television space. According to Comscore, it is more popular than TV Guide and TV.com.
Like many other successful entrepreneurs, Andy is well educated; he has an MBA from Wharton. However, his success is not defined by his degree, but rather by his frugal nature. If you read Andy’s blog, you’ll discover that he bargains whenever he can (even at department stores). This, in turn, makes him an exceptional negotiator when it comes to business affairs.
Whether he is dealing with consultants, employees, or potential investors, Andy makes sure he is getting the best deal. To top it off, he has also been able to buy companies for a steal — just take a look at I Can Has Cheezburger! According to this article, he bought it for around $2 million; with their traffic growing from 10 million page views a month to 170 million, the current value of the company must be much higher.
Although there isn’t anything wrong with being frugal, you need to know when your company should spend money. For example, if you don’t spend money on things like marketing (when the time is right), your company will never reach its full potential.
You can’t ever be satisfied
If you are satisfied, there is nothing that will push you to grow. Two entrepreneurs that are never satisfied are Jason Fried and David Heinemeier Hansson from 37signals.
Even though their software company has been doubling its revenue roughly every year, they never seem to stop improving their products. They are constantly getting feedback from users and making tweaks to improve the experience.
They are also monitoring how users are interacting with their website so they can maximize their conversion rates. If you don’t believe me, just take a look at archive.org; there have been roughly 116 variations of basecamphq.com in just 4 years.
You have to constantly evolve
Have you heard the saying, “the bigger you are, the slower you move”? Well, it isn’t true in all cases. Mark Zuckerberg’s company, Facebook, is always evolving. Not only do they make tweaks to the website on a regular basis, but they are able to evolve their business model fairly quickly.
Just look at all of the news coverage they received on TechCrunch in 2009. While some of the attention they received was on things like lawsuits, a good portion of it was about new website features and changes to their business model.
If that doesn’t bring things in perspective for you, compare Facebook with Twitter. Both of the companies are growing rapidly, but Facebook has been able to evolve faster, despite having 14 times the number of employees.
You have to love what you do
You can make money doing something you don’t love, but you can make much more money if you spend your time on something you love. If you love what you are doing, you will work harder and spend more time doing it. Best of all, it won’t seem like work.
Gary Vaynerchuk is a great example of someone with a passion for his work. In just three years, he was able to turn his family’s $4-million wine business into a $50-million business. He was able to combine his passion for wine and the social web to create an empire.
After Gary conquered all things wine-related, he realized he had a passion for branding. He then created Vaynermedia, a company that helps build brand equity. Things continue to go well for Gary. He secured a 7-figure book deal and has shares in many prominent web companies such as Twitter.
If like Gary you love what you are doing, not only are you more likely to make a decent chunk of change but you also will be happy.
Good entrepreneurs come in a variety of colors, sizes, and personality types. Still, they all share the traits mentioned above. If you know of any other qualities that make up great entrepreneurs, feel free to leave a comment.