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 your mind?
Yes, they all have built successful companies, but other than that what commonalities do you see?
When you look at it from a high level these successful entrepreneurs don’t share much in common. They aren’t all men, they have different levels of education, they are made up of different nationalities, and they live in different regions of the world.
However, there are a lot of commonalities between them and other successful entrepreneurs when you dig a bit deeper.
You have to be somewhat smart
By no means is a college degree required in the entrepreneurial world. Some of the most successful entrepreneurs like Michael Dell and Bill Gates don’t have college degrees, but yet they 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; which happened to revolve 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 did not help him get there, instead he was smart enough to figure out what consumers wanted. Once he had enough eyeballs on his website he tested various monetization methods which is how he got 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. Granted a college degree may help, 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 dollars 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 following your gut and doing whatever it tells you to do. But if you are like a great entrepreneur, you’ll making calculated decisions.
A few years ago Tony Conrad launched a company called Sphere, which competed directly with Technorati. Within a few months after 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 under served compared to the blog search engine market.
In a short period of time websites like New York Times, AOL, TechCrunch, CNN, and 20,000 other blogs were using the Sphere widget. The mass adoption caused Sphere to receive over 1 billion pageviews a month, which led AOL to acquire the company.
You can’t be afraid to roll the dice
I know I previously said that you have to be willing to take calculated risks, but at the same time you 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 in time the company used to charge for premium accounts, which accounted for $500,000 in month revenue.
After a few years or running Hot or Not, James and his co-founder decided to remove their paid subscription model and solely rely on revenue from advertising and virtual gifts. Within the first month of doing this the company had a growth of 60% in traffic and luckily they got to break even.
Although James reverted back to a premium subscription model due to spam, he was still willing to roll the dice when he needed to. The company still did very well and he ended up selling it for around $20 million in 2008.
You need to be cheap
Andy Liu isn’t a well-known entrepreneur like Evan Williams or Marc Andreessen, but none-the-less he is successful. His first company, NetConversions, sold to aQuantive in 2004 and his current company, BuddyTV, is dominating the television space. According to Comscore it is actually more popular than TV Guide and TV.com.
Similar to many other successful entrepreneurs Andy is well educated; he has an MBA from Wharton. But his degree isn’t what makes him successful, it is his frugal nature. If you read Andy’s blog you’ll get to know that he bargains whenever he can (even at department stores), which is what makes him an exceptional negotiator when it comes to business related affairs.
Whether it is consultants, employees or even potential investors, Andy makes sure he is getting the best deal. And 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, it was bought for around 2 million dollars, and with their traffic growing from 10 million pageviews a month to 170 million, the 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 it’s 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 it’s 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; they have been through roughly 116 variations of basecamphq.com in a span of 4 years.
You have to constantly evolve
Have you heard of 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 are they making 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. Yes a lot of it is on things like lawsuits, but a good portion of it is about new website features and changes to their business model.
And 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 even though they have 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, naturally you will work harder and spend more time doing it. And best of all, it won’t seem like work.
A great example of this is Gary Vaynerchuk. He was able to turn his families $4 million wine business into a $50 million business within 3 years. Through his passion for wine and the social web, he was able to combine them and create an empire.
After Gary conquered all things wine related, he realized he had a passion for all things brand related. So he created Vaynermedia, a company that helps build brand equity. So far it seems that things have been going well for him. He locked in a 7-figure book deal and he has shares in a lot of predominate web companies like Twitter.
If you love what you are doing like Gary, not only are you more likely to make a decent chunk of change, but you will be happy.
Good entrepreneurs come in different colors, sizes, and even personality types. But they all share these quality traits. If you know of any other qualities that make up great entrepreneurs, feel free to leave a comment.