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Heart, smarts, guts and luck are the defining traits of great entrepreneurs and business builders, say the authors of a new business book that has shot up to the No. 3 spot on the New York Times hardcover and miscellaneous list. And the catalyst that puts those traits to work is self-awareness.
"Heart, Smarts, Guts, and Luck: What it Takes to Be an Entrepreneur and Build a Great Business" (Harvard Business Review Press, 2012) was co-authored by Anthony K. Tjan and Richard Harrington, two partners at Boston venture firm Cue Ball Capital, and CEO adviser Tsun-Yan Hsieh.
The book is based on interviews they conducted with hundred of executives and business builders, such as Google co-founder Sergey Brin and Zappos CEO Tony Hsieh.
Tjan recently shared his thoughts on the four essential traits that make up successful entrepreneurs. Though the blend of attributes varies from person to person, every entrepreneur and business-builder he has met possesses all of these four qualities, he told BusinessNewsDaily.
BusinessNewsDaily: What are the essential skills for entrepreneurship?
Tony Tjan: We describe four critical traits in our book – you need the heart (passion and purpose), the smarts (pattern recognition), guts (to start, to endure and to persevere) and a factor of luck (not chance, but the right attitude around humility and optimism). All of this connects very closely to the ability to be self-aware – where you are strong and where you have gaps.
BND: In "Heart, Smarts, Guts and Luck," you say that self-awareness is the most important leadership quality and is more important than high IQ. What are the differences between the two and what steps and tools can help develop increased self-awareness?
TJ: Self-awareness is about knowing what motivates your decisions and leadership behavior. Ultimately, we all have biases in the way we think and act and those biases are correlated with your strengths and weaknesses. This type of awareness is a by-product of having as much or more high Emotional Intelligence than high IQ. The latter is about analytics and book smarts, the former is having humility and self-consciousness.
You can become more self-aware through psychometric and attitudinal tests such as the Entrepreneurial Aptitude Test we developed for Heart, Smarts, Guts and Luck, by codifying your actions and reflecting on them, and by having a system of peer feedback. See more about how leaders become more self-aware at one of my recent blog postings.
BND: Which trait predominates in small businesses?
TJ: Founders and small business owners tend to be heart-dominant. There is an infectious passion toward their vision and calling. In our research, 60 percent of founders were heart-dominant.
BND: Can you be a successful entrepreneur without passion?
TJ: It is very difficult, I believe. I certainly have not met anyone without it who has had great success. You can have quiet and more introverted passion, but you ultimately need to feel what you are doing is worth caring for.
BND: Are the skills sets and mindsets of creators different from those of builders?
TJ: One is focused on realizing a new idea, often with a heart-dominant personality, while builders and “scalers” are often focused on understanding, which of the founders’ values are acceptable for trade-offs in the name of scale and therefore often have more "smarts-guts" in their profile.
BND: You write about an individual's authentic "true north"— a goal, purpose or calling you know you were born to follow. How important is awareness of that true north?
BND: Can you make yourself luckier?
TJ: Yes – there is a type of luck called circumstantial luck that you help create through an attitude of humility, intellectual curiosity and optimism. It turns out that more optimistic people tend to be luckier, not due to random chance but because they are able to see and take advantage of more opportunities that people misperceive as random luck.
BND: Why is the importance of having a business plan overrated?
TJ: Less than 30 percent of our survey sample of those with a successful business started with a formal business plan. It is simply too hard to be predictive at the beginning across all dimensions. You want to be approximately correct, not precisely incorrect. Most people end up doing the latter with countless spreadsheets and market analyses missing the most critical step – which is often just to start and use that as the initial data of a high-level business plan. There is nothing like real data from just trying.
BND: When you and your-co-authors were developing the core concepts of HSGL, you said that the role of heart was the last to reveal itself. Why?
TJ: It was almost too obvious to us and sometimes was confused with guts – which is more about the propensity for action.
BND: Describe your partnership with small business advisory organizations such as Startup America and The Sandbox Network to stimulate entrepreneurship.
TJ: We recently did a webinar with Startup America and have just begun looking at ways to collaborate to push a greater self-awareness movement through meet-ups and sponsored distribution of some of our books. We have also donated several hundreds of books to Sandbox that is a leading organization for tomorrow’s next generation of leaders who are under 30 today. Their focus on mentoring and having a real community inspired me, and I recently also became their chairman.