Entrepreneurial Leap, Updated and Expanded Edition

1. Know Thyself

Overview

Before you commit to the entrepreneurial path, you have to judge whether it actually fits you. That's hard to tell, because the same traits that give you drive and vision can also make you volatile and blind to your own flaws. There's no clear signal about whether you belong.

The entrepreneurial profile looks like this: an entrepreneur is an idea generator, a learner, a big-picture thinker, an optimist, and a risk taker who is gritty, persuasive, financially motivated, and accountable. Angela Duckworth defines grit as passion and perseverance for long-term goals. Dr. Edward Hallowell's formula is pop equals grit plus imagination plus optimism. Joe Haney, at thirteen, hired friends to clear concrete for profit.

But there's a challenging side. Entrepreneurs can be unfocused, disorganized, controlling, perfectionist, selfish, and narcissistic, and they often lack financial savvy. John D. Gartner's The Hypomanic Edge links hypomania to entrepreneurial success.

So apply the rule. If 80 percent of these qualities fit, you're on your way to becoming an entrepreneur. The next chapter's six essential traits require 100 percent. Feeling different, scared, or like a misfit is normal. Separate how you feel from who you are. Without 80 percent, don't leap.

Key takeaways:

• Run the self-check honestly against the whole list. If most of the profile matches, you're ready to start. If it doesn't, the venture can wait.
• The difficult qualities come from the same place as the useful ones. A need to control outcomes and a short attention span usually come with the imagination and drive that make the work possible.
• Separate how you feel from who you are. Feeling unlike the people around you, or uneasy about the path, says nothing about whether you have the constitution for it.
• Expect the next stage to be stricter. The profile here is a starting gate. The qualities that follow require complete alignment.
• Build grit alongside imagination and optimism. Hallowell treats all three together as the energy entrepreneurs run on, so a missing ingredient is worth naming before you commit.

2. 6 Essential Traits of an Entrepreneur

Overview

Many aspiring founders think entrepreneurial success can be learned like any other skill. But what if the qualities you need are already fixed before any training starts? Then chasing that path could be a years-long mistake.

Here's the hard truth. A trait is in your DNA, not something you can learn. And essential means absolutely necessary. Three decades of working with thousands of entrepreneurs points to six traits that are inborn.

1. Visionary
2. Passionate
3. Problem solver
4. Driven
5. Risk taker
6. Responsible

Visionary and Passionate

Vision means connecting dots, seeing the big picture, and knowing how money works. How much vision a business needs depends on a few things:

• the type of industry
• growth goals
• how much the market shifts

Passion is a strong belief in your product or service. It carries you through failure. EOS Worldwide took more than 500 full-day sessions with leadership teams.

Problem Solver and Driven

A problem solver sees solutions and loves trial and error. Bob Verdun rebuilt CFI twice, after his market became too common and after the 2000 dot-com crash cut revenue from $28 million to $4 million.

Drive is an internal fire about winning. It's separate from passion for a product. Douglas Brackmann puts the share of people born with the gene behind it at nearly 10 percent.

Risk Taker and Responsible

Risk takers leap knowing they may fail. They weigh reward against risk and treat failure as learning. Responsibility is total accountability, blame turned inward. M. Scott Peck described two opposite mistakes people make about responsibility: taking on too much or too little.

Clearing the Bar

You need all six traits. Yes to all six means you have what it takes to be an entrepreneur. Anything less means you do not. Those who clear the bar face three more chapters that serve as final tests, followed by a look at what entrepreneurial life can actually look like.

Not clearing the bar is nothing to be ashamed of. The whole point is clarity about where you belong instead. Frederick Buechner said your calling is found where your deepest gladness meets the world's deep hunger. Know yourself.

Key Takeaways

• Accept that these six qualities are fixed at birth. Energy spent trying to acquire a missing one is energy wasted.
• Judge yourself on all six at once. Strength in a few does not cover for a single absence.
• Treat a failed result as information about fit, not a verdict on your worth. Let it point you toward work that matches the person you already are.
• Expect the bar to exclude most people. Douglas Brackmann estimates that only about 10 percent are born with the gene behind drive.

3. What If You’re Missing an Essential Trait?

Overview

Most people who go out on their own think the work itself will be the hard part. The real question is what happens when one essential piece is missing, and you can't see it in yourself. Does that one gap mean you shouldn't do it at all?

Michael Gerber's E-Myth Revisited says most businesses are started by technicians, not entrepreneurs. Gerber calls it an entrepreneurial seizure when someone jumps into starting a business just because they're good at the technical work, without checking whether they have what it takes to run the whole thing. Every company needs three roles filled: the technician, the manager, and the entrepreneur. All six Essential Traits are required. If one is missing, it's like a car missing a vital part. The leap probably won't work.

Where each gap leads

• If you're not a visionary, you're better off in a sales role where someone else sets the direction.
• If you're not passionate, early setbacks will end the business.
• If you're not a problem solver, buy a proven franchise system instead of building your own.
• If you're not driven, you'll be outworked by people Dan Sullivan calls "batteries-included."
• If you're not a risk taker, bring in a partner. Or work inside an existing company as an entrepreneur.
• If you're not responsible, go solo, so there are no employees to blame.

Key Takeaways

• Check yourself against every trait a founder needs before you commit. If one is missing, delay or restructure. Don't treat it as a small weakness to fix later.
• If you're a technician and you suddenly want to start a business, that might be an entrepreneurial seizure, not proof you're ready. Fill the three seats every company needs, production, management, and ownership, with people who actually fit them.
• If you're great at selling and talking to customers but not at setting direction, take the sales role and let someone else carry the vision.
• If your enthusiasm fades at the first setback, or you know others will outwork you because you lack drive and appetite for risk, bring in a partner, work as an entrepreneur inside a company, or pick a structure that supplies momentum.
• If systems thinking or personal accountability is your weak spot, buy into an established operating model, or stay a solo operator until you can own results without employees to blame.

4. Second-Generation Entrepreneurs

Overview

A founder ready to step back naturally looks to family for a successor. But handing over what one person built rarely goes as expected. When it goes wrong, everyone pays: the business, the family, and the person stepping in. So what really has to be true before that handoff is worth making?

Who Qualifies

A second-generation entrepreneur joins the family business and transforms it. But entrepreneurship cannot be inherited. There are six traits that matter:

• visionary
• passionate
• problem solver
• driven
• risk taker
• responsible

If even one is missing, don't hand over a company that depends on an entrepreneur's drive. Find someone who has all six, even outside the family. A child who isn't an entrepreneur can still take over, but only if the goal is to keep things running, or they can join in a role that fits.

Odds and Advice

Research cited in the book shows about 32 percent of second-generation businesses survive. That drops to 13 percent in the third generation, and just 3 percent beyond that. Prove yourself elsewhere first. Expect to work harder than anyone else for the same respect.

Key Takeaways

• Send the next generation out to build a career and a reputation elsewhere first. Inside the family firm, they will have to earn twice over what the founder was granted on arrival.
• Figure out whether the business you're passing on needs growth or just steady hands. A child who's better at keeping things running can hold a role in the firm, but can't be trusted with a company whose survival depends on an entrepreneur's drive.
• Treat each handover as the decision that determines whether the company outlives you. Assume survival into the later generations is the exception, not the rule.