Great entrepreneurs have these six skills
What skills do the founders of upstart companies like JetBlue, Chipotle, Tesla and LinkedIn have in common? That's the question researcher Amy Wilkinson set out to answer by spending five years interviewing 200 of the country's leading entrepreneurs, all of whom dreamed up companies within the past decade that have each grown to more than $100 million in annual revenue.
From her interviews and research, she deduced six essential skills that those who create and scale majorly successful ideas share_the ability to spot gaps in the marketplace, maintain a long-term vision, iterate quickly, fail smartly, collaborate and be generous.
Wilkinson is a lecturer at the Stanford Graduate School of Business and compiled her research in the recent book "The Creator's Code." The conversation has been edited for length and clarity.
Q: When you started out, you must have had a hypothesis for what these successful entrepreneurs had in common. What was different from you expected?
A: My original thought was that there might be a generational difference, that these figures might all be under 40 years old. I now don't think it has anything to do with age. It has to do with a mindset and a skill set - it's not a demographic, it's a psychographic. That was a little bit of a surprise. I also originally wondered if there was an East Coast/West Coast divide. But again, I realized it's not that. You can start and scale a company anywhere. Chipotle, for example, is out of Denver. Spanx is out of Atlanta. Under Armour is out of Baltimore.
Q: Any big surprises that came from meeting these entrepreneurs face to face?
A: The entrepreneurs who have succeeded really want other people to also succeed. When you get in front of Kevin Plank, for example, at Under Armour, you realize he very much wants to raise up other people in the sporting industries.
There's a lot of hero worship around entrepreneurs. But actually when you spend time with them, you see they're not that comfortable. Elon Musk, for example, he's a hero right now. But I was on the factory floor with him at Tesla and said, "Wow, you're having such a good year. You're so on top with Tesla and SpaceX and all these things." And he's like, "Really, do you think so?"
He has struggled. If you wind back the clock to 2008, it really was not an obvious thing he would succeed. Tesla could have very easily gone out of business. SpaceX had three big rocket explosions before a fourth one launched. With these kind of endeavors, the people who take them on know how challenging they are and they get comfortable being uncomfortable.
Q: You mentioned how Kevin Plank wants to see other people succeed. That ties into one of the key skills you found in your research, right? That there's a generosity a lot of these creators display?
A: That's one of core skills: gifting small goods. It could look like forwarding a resum�, writing a few lines of code, making an introduction for somebody, critiquing a proposal. As Reid Hoffman, the founder of LinkedIn, likes to say, no one's going to throw himself in front of a train for you, but people will do little things that are helpful.
How this becomes really interesting, especially in the last five years, is that technology has made our behaviors transparent. Because of the rapid speed of communication and the transparency of our reputations, people know when you collaborate and help others - and then information comes to you, deals come to you, people want to work with you, talent shows up at your door.
Q: For people who are thinking of starting a business, where would you advise them to first put their energies and build their skills?
A: I would start by strengthening your ability to spot something others don't see, to spot a gap or an opportunity. I found there are three ways people do that, which I call being a sunbird, an architect or an integrator.
A sunbird is somebody who can pick up an idea in one place then fly it over to another place and reapply it. It requires reasoning by analogy - you see something that works over there and see how to make it work over here. An easy example would be Starbucks. Howard Schultz didn't invent coffee culture. He saw it in Italy and loved how Italian coffee houses worked, and he brought it back to Seattle. All of us could do that. We could be looking for things that work as existing models, and then be lifting and shifting them.
Another thing we could all be doing is thinking like an architect. This is the idea that instead of looking for a working model, you look for a problem that is not addressed and then you build from the ground up. This is certainly Elon Musk, but it would also be Spanx CEO Sara Blakely. She didn't emulate something already in the marketplace, she designed a new kind of hosiery and then became the youngest self-made billionaire.
The third thing is to be an integrator, someone who realizes that integrating things can bring novelty. Chipotle is an example. There were fast-food and casual restaurants, which it pulled together into fast-casual as a category. We could all look for ways to mash and smash things together to create a new sector.
Q: Was there a particular question you found yielded the most interesting and insightful responses from these entrepreneurs?
A: One thing I tried to ask was "How do you come up with your own breakthroughs?" People had different things to say there. Sara Blakely at Spanx lives five minutes from her office, but she drives a 45-minute commute in the morning. That made no sense to me. I was like, "What are you talking about?" She said she gets her best ideas while driving a car, so she schedules that time into her day.
Elon Musk talked about how he gets the classic idea in the shower, or he'll wake up in the morning and have an idea. The Chobani founder, Hamdi Ulukaya, talks about going on nature walks in upstate New York. He has to be by himself walking, and his team knows to give him the space to do that. It was interesting how these people learned to structure their own time.
Q: Now that you've identified these skills, is there one you've been working on for yourself?
A: One of the six skills is the ability to fail wisely. That's the one I personally am working on, because by nature I am more of a perfectionist. That doesn't work in the new economy. We can't know the perfect answer. Businesses used to operate on the idea that we could take risk out of a system, scale up an idea, take it global - and know exactly what that should look like. I don't believe we can do that anymore. Our world is too technologically accelerated and too globally linked and too hard to anticipate.
But we can test a bunch of small experiments. We can set a failure ratio. I'm personally trying to do this, where I think: One in three things I try is not going to work. And that's actually what I want, because then I'm pushing the envelope. People who are willing to create things are also willing to get it wrong.
Q: Did you find that successful entrepreneurs had roughly the same risk tolerance? Or each made a different calculation?
A: They all had different risk ratios, but no one's ratio was zero. Nobody wants a perfect record. It also depends on where you are in the life cycle of your company. At the beginning, Kevin Plank at Under Armour was maxing out credit cards and going home so his mom would cook his meals, at the same time as he was sending a Christmas card to Phil Knight at Nike saying, "You haven't heard about us yet, but you will." Now Under Armour has $3 billion in annual revenue, so his risk tolerance is different from it was at the very beginning of that company.
Q: Did you find the personalities of these entrepreneurs were just as varied as their risk appetite?
A: They were completely wide ranging. There are introverts and extroverts, convergent thinkers and divergent thinkers, there are some real perfectionists and then there are some people who can play it loose and experiment all the time. Some are soft-spoken, some have a lot of bravado.
They're all very driven, so there's that commonality across their personalities.
Q: Did you get a sense of their leadership styles?
A: A common thing all the creators of these pretty revolutionary and successful companies share is they can really attract other people to work with them. That's a big deal. People who are creating new ideas, they have to have the ability to influence other people to join their team. They have to be able to find allies, because their business is changing rapidly. If you're in a high-scale, high-growth scenario, you have to be able to bring people in very, very quickly.
Another thing I think is pretty common, and different from traditional leadership, is their ability to cultivate, encourage and harness conflict. Creators are willing to bring in other points of view, they're willing to be told they're wrong. The PayPal group is a great example of this. The PayPal founders describe plenty of pushing and shoving, and their business was six different models in 18 months. But then they sold it to eBay, and went on to start YouTube, Yelp, LinkedIn, Tesla, SpaceX, Palantir, put the first money behind Facebook. It's an amazing team.
When you spend time with them, they talk about sparring. They talk about debate. They talk about telling each other that they think they're wrong, and then respecting at the end the decision that gets made by whoever's leading the team. That's pretty different from a lot of other settings of leadership, where the boss is always right and everyone else follows from the top down.
Q: Is there anything that didn't make it into the book that you wish had?
A: The point about getting comfortable being uncomfortable is not in there enough. I don't think people ever get completely comfortable scaling up ideas. It's always a wild ride. You need the ability to cope with ambiguity and to constantly find solutions. You also need the ability to be really curious and ask a ton of questions, because there isn't an answer that's obvious. You just keep probing until you find a way. That's important across all professional pursuits. If it's thrilling and exhilarating and exactly the right thing, you're going to have some uneasiness in the pit in your stomach, right?