Entrepreneurial cortex  Enterprising minds are extraordinary

So, what causes this difference of thought; this distinct mindset that sets the entrepreneur apart from others? The surprising news is that entrepreneurs are defined as much by what they are not as what they are. Through my own experiences working in and with businesses at home and abroad; personal conversations with colleagues and peers; and the rich testimonies of entrepreneurs in interviews I conducted for the But Tell Me How podcast series, I identified eight key traits that – in their presence or absence – characterise the entrepreneurial mindset. Five qualities exist in most entrepreneurs. Three behaviours are notably missing.

What entrepreneurs are

They are from all backgrounds

Two classic myths of the entrepreneurial upbringing endure. The first is that entrepreneurs are mostly graduates of the School of Hard Knocks, brought up in poverty or from broken families, playing a terrible hand skilfully. The second myth is the opposite: that entrepreneurs are born into comfort and privilege, and that the mental space this affords is conducive to imagination and ideas. Neither legend is true. Background and schooling are irrelevant. Entrepreneurs hail from all walks of life; from council estates to Eton. This reality contains an important lesson: there are no excuses – neither a tough background nor a privileged one should preclude anyone from becoming an entrepreneur.

There is, however, some evidence that an unusual background – financial, familial or locational – might enhance drive and hunger for success. PensionBee founder Romi Savova featured on But Tell Me How. Savova was born in Bulgaria as communism was falling apart. She emigrated to South Africa at just six years of age, as her parents – both medical doctors – sought work abroad. She moved again, to Atlanta, Georgia, as a teenager, to study. “I always knew that I wanted to do something, to get out there, to have an impact and to make change,” she tells the podcast. “I’d always been a bit of an entrepreneurial child.”

They are iconoclastic thinkers

Entrepreneurs are independent in the way they analyse and evaluate problems and opportunities. Capital Xtra is a London-based radio station featuring urban music such as hip-hop and R&B. When Dr Yvonne Thompson, who founded the station as Choice FM, asked for investment into the nascent channel she was told “black music will never happen”. Dr Thompson begged to differ.

Entrepreneurs rarely follow the crowd: they like to stand out. “Of course it worked,” Thompson tells But Tell Me How. “Everything shifted. The charts eventually shifted from rock ‘n’ roll to pop music, then from pop music to blue-eyed soul, then from blue-eyed soul to black soul, and every other kind of genre of black music, which we can still witness now. Choice FM filled the need for the black community to hear the kind of music that they wanted to hear, because you could not hear black music on mainstream radio stations at the time.”

Thompson eventually sold the station to Capital Media – the idea that would “never work” was purchased by a major brand. “Almost everyone will tell you that your business will not work,” says Simon Rogerson, chief executive and founder of the Octopus Group. “But entrepreneurs are optimistic and feel there will always be a way.”

This optimism bias is a classic trait of the enterprising mind: entrepreneurs have a conviction that they will – eventually – succeed. “Being optimistic has great business benefits,” says Rogerson. “It is easier to generate new ideas and solve problems when we are optimistic. Our brains are freer. We are more inclined to see solutions rather than problems.”

They are dogged

Entrepreneurs never quit. They have a clear idea of what they want to achieve. They are flexible and adaptable: they twist, turn and pivot until they achieve it. “Don’t be afraid to fail!” says Rogerson. This is an area where the entrepreneurial cortex differs from its managerial cousin. “Most people in an organisation spend their time trying to limit, control or stop risk from happening,” Rogerson adds. “They see failure as exactly that – rather than the natural path to building something successful.”

It is this doggedness, this instinctive tendency to use mistakes as building blocks to reconfigure and reframe, that gives the entrepreneurial mind its distinctive resilience. “It always takes more time than you can imagine,” an entrepreneur reports. “The critical thing is to keep going. There is no such thing as an overnight success. It usually takes years of patient effort.”

Trial and error – test and learn – are principles hardwired into the entrepreneurial mind. When I ask Savova about her biggest failure, her answer is instructive: “Yeah, entrepreneurs don’t do that,” she laughs. “It’s not that you don’t fail – of course you do. But you don’t see it as failure. You frame almost everything as learning – because that is what gives you the mentality to do better.”

They are great innovators

Too many associate entrepreneurialism with the pursuit of riches. This is wrong. The entrepreneurial mind is rewarded not by money, but by solving problems.

Rather than wealth, entrepreneurs seek instead to remove customer pain points – making life better for people. They have an unshakable belief that they must solve the key problem that they set out to address. “I didn’t want to just sit on the money – that has no meaning,” one successful entrepreneur, who invested most of the returns from his first big exit on a new venture, tells me. “I just wanted to make this new business work.”

They are inspirational

“The facts are boring,” says Rogerson. “Humans only remember 5% of the facts we are told, ten minutes after hearing them.” Entrepreneurs know this, hence why they seek to enthuse their teams with the power of storytelling. “People remember 65% of stories,” Rogerson says. “Stories make us feel things. Emotions are far more powerful than logic. Entrepreneurs tell good stories about their business.”

Rogerson’s testimony reveals an important truth. Entrepreneurs are inspirational – they are expert at garnering others’ buy-in for their ideas. This is a crucial quality: for businesses to be a success, entrepreneurs must motivate their teams to share their goals.

This talent for storytelling is in part born from entrepreneurs’ distinct ability to separate the signal from the noise. They are adept at identifying the essentials that lead to success and communicating them clearly, eliminating the mind-fog that can otherwise muddle others’ comprehension of complex projects.

It is this ability to foster belief and clarity in colleagues that helps create a collective will. “You need to find people who believe in the same things that you believe in,” Savova tells But Tell Me How. “You have a responsibility to make sure that you’re doing the right thing for your customers from that position of knowledge – so find individuals who believe in that as passionately as you do – and therefore bring with them similar values to building the business.”

What entrepreneurs are not

They are not good at running businesses

Do not adjust your magazine. The strapline is correct: entrepreneurs are rarely good at running businesses. They typically make poor senior managers. Much of this is born of their predilections – the enterprising mind has a bias for ideas; it finds day-to-day management boring.

Great entrepreneurs recognise this. They find people who like – and are skilled at – the everyday administration of organisations. “The best thing I did was to hire a CEO,” a serial entrepreneur says. “I don’t like running the business day to day. But I love to get things started and prove we have made a sustainable company.”

They are not compliant

“Tell HMRC to eff off,” says the founder of a creative agency. His financial director knows this would be unwise – and tells him so. Yet this founder’s attitude – while rarely as starkly expressed – is common among entrepreneurs. They seldom contemplate key compliance matters such as audits or tax regimes. They believe that breaking things is necessary to make their ideas work.

This entrepreneurial reluctance to comply can cause problems when liaising with those who hold the purse strings. Yet it also brings benefits: protecting the purity of ideas is essential. “It’s really important for entrepreneurs to remember that investors are backing them and their ideas,” Greg Jackson, chief executive of Octopus Energy tells But Tell Me How. “As soon as you get into cocreation, it’s going to be a disaster… If people start tinkering, the holistic idea starts to fall apart… In the short term, you may all feel good. In the medium term, it’s far less likely to be successful.”

They are not popularity-hungry

It is human nature to seek approval. Popularity is popular. Yet entrepreneurs are different. They care little about the affirmation of others. They are out of step with general opinion – and happy to be so. “If you do things well, do them your way,” said Anita Roddick, the late founder of beauty chain The Body Shop. “Don’t always follow the crowd. It’s what makes you unique — and often unpopular — that makes the difference.”

This suspicion of popularity is not callous – rather it is born from a recognition that any idea seems crazy until it works. The entrepreneurial mind is avowedly nonconformist – comfortable consensus is anathema. Thus, many entrepreneurs court unpopularity – even tolerate mockery – until their idea succeeds. Thankfully, most are thick-skinned. “The difference between successful people and others,” the US investor and business commentator Barbara Corcoran once said, “is how long they spend feeling sorry for themselves.”

Working with entrepreneurs

The enterprising mind is critical to starting up and developing businesses. Yet it requires managerial minds around it to maintain them and help them grow. It is the combination of both skillsets – the creative brain and the supervisory one – which lead to great businesses. It is true that some entrepreneurs can make the transition to the managerial mindset – Greg Jackson, Bill Gates and Steve Jobs are outstanding examples. They can morph between the two mindsets, applying each as appropriate. Yet, such double psychologies are unusual. Most have only one.

The distinction between the entrepreneur and the manager is an important one. It is an essential difference which all directors should identify and act upon. The entrepreneurial mind is precious. But it is not omniscient. Great ideas need support. As one venture capitalist says: “It is not the best idea that always wins. It is usually the most persistent and flexible teams who just make it happen.”