The words “entrepreneurship” and “vision” are frequently used in tandem. The implication is that both encapsulate the ability to make a difference, to innovate, to spot what others cannot within a business setting.
This gives rise to a long debated question: is this ability, this “vision”, something innate or is it something that can be developed? In other words, is entrepreneurship fundamentally a question of “nature” or “nurture”?
The point is especially important when one factors in the related question of whether successful entrepreneurship is sometimes simply a matter of luck. Is an entrepreneurial outlook an inherent gift bestowed only upon a fortunate few? Might it actually be better to be lucky than good?
The answers perhaps become a little clearer if we ask an alternative question: why do some entrepreneurs have only a single notable success and lots of failures while other entrepreneurs succeed again and again? It is by getting to the bottom of this vital and revealing distinction, I believe, that we edge much closer to the truth.
We all know there are many entrepreneurs who have enjoyed a major success but cannot manage to repeat it; and we know, too, that there are others seemingly possessed of a “magic touch” – those who somehow get it right again and again. If you took away all of their money tomorrow, they would make another million within a year. Let us call the former “one-hit wonders” and the latter “serial achievers”. Are either lucky? It may be tempting to think of the serial achievers as uncommonly lucky. After all, they are the ones who succeed again and again.
In reality, though, it is the one-hit wonders who are more likely to have had luck on their side – usually because they were in the right place at the right time. This is often how some entrepreneurs get lucky once; and it is also probably why they never get lucky again. They will succeed again only if fortune smiles on them again. There’s nothing wrong with luck, but it’s important to recognise it for what it is, rather than presenting lucky successes as case studies for emulation.
If we recognise that anyone in the game can be lucky once then there must be something else behind the track records of the serial achievers who create wealth on a consistent basis, maybe even in different industries. What is the secret to their success – if, indeed, it is a secret at all?
Of course, any entrepreneur with a conspicuous success story to their name will subsequently find it easier to attract both human and financial capital second time around. Yet this cannot be the explanation we are looking for, because this is the case for one-hit wonders as well.
What about the aforementioned “vision”? Vision is a wonderful thing for motivation and for inspiring others, but it changes as a business evolves and learns. Almost every day I see business ideas, and some are interesting, yet they are of strictly limited value in the absence of effective execution.
And it is here that the answer surely lies. Serial achievers succeed again and again not because of luck, but because of the skills and experience they bring to bear and the processes they apply. What sets the multi-hit wonders apart from their one-hit counterparts is a particular ability to frame problems, articulate propositions, establish early ‘touch & learn’ cycles with customers, and iterate their value hypothesis (or ‘pivot’ in today’s parlance); thereby minimising risk and maximising opportunities.
Curiously, it is skills such as these that routinely go unnoticed or are largely misunderstood; being habitually hailed as part of the mysterious “gift” with which certain individuals are supposedly imbued. This idea of an ineffable natural ability is as unhelpful as it is damaging. It is possible that a lucky few do have natural skills, but it does not mean that those without them cannot learn them at almost any life stage.
These are skills, and skills can be taught. At Nottingham University Business School we have been involved in various studies demonstrating how would-be entrepreneurs of all kinds can be trained to develop the sort of innovative mindset and problem-solving discipline liable to foster success not just once, but repeatedly.
Nassim Nicholas Taleb, the author and risk analyst, once observed that to understand why some people succeed it is essential to analyse why others fail: “Some traits that seem to explain millionaires, like appetite for risk, only appear because one does not study bankruptcies.” To put it another way: it’s only by comparing equivalent failures and successes that we can uncover any crucial lessons and insights.
We might usefully reflect on the analogy of a lottery player who scoops a multi-million-pound jackpot and promptly writes a book about their statistical technique to come up with the winning numbers. Some readers may regard him or her as tremendously clever, but the fact is that lottery wins are down to pure chance and involve no talent whatsoever.
Ultimately, there is nothing wrong with luck. Moreover, there is nothing wrong with celebrating it. But in teaching the entrepreneurs of the future we should acknowledge it for what it is and present it for what it is; and, above all, we should make absolutely clear that it is better to be good than lucky.
David Falzani MBE CEng is a serial entrepreneur, Professor at Nottingham University Business School and President of the Sainsbury Management Fellowship - which has given £11m in bursaries to young engineers to study at the top 14 business schools in the world. Those recipients have gone on to found new companies worth over £4.6bn, create 18,000 new jobs, and helped develop some of the UK’s largest corporations.