What Mindset Do You Need To Become An Entrepreneur?

According to studies, there are significant differences in the mindset of an entrepreneur and a manager:

#1 Optimism

Optimism is absolutely required for any entrepreneur. We know that almost 75% of startups fail, so to start the one with statistically almost no chances for success is suicidal without an optimistic view of the future.

An entrepreneur plays many different roles in a startup, especially in the beginning, but not being a specialist in all the functions, founders have to act on the basis of their insufficient knowledge. Normally it should prevent them from taking steps in such conditions unless entrepreneurs are overoptimistic.

One research showed that 33% of founders were absolutely convinced that their venture had a zero chance of failure, and 81% believed their firm had a 70% or greater probability of surviving.

On the other hand, overconfidence has negative effects on a startup and its founder. It can increase unreasonable risk-taking, setting unrealistic goals, making wrong decisions.

The recent research from the University of Bath, the London School of Economics and Political Science, and Cardiff University shows that pessimists earn 30% more than optimists, who tend to overestimate their abilities to find a good business opportunity and exploit it successfully.

Optimism has a double-sided effect on entrepreneurs, we can compare it with a rocket fuel. It is absolutely necessary in the beginning of the life-cycle of a venture: to start, make a step into the unknown and maybe even sacrifice something. But later, founders have to pay much more attention to their optimistic attitude and criticize their decision, make a reality check.

#2 Vision

“Vision is foresight – the capacity to envisage future market trends and plan accordingly.” – Wikipedia. It is needed to set goals, creates an image of the future, establishes the most important values and helps to share those values with other people.

“Vision is the art of seeing what is invisible to others.” – Jonathan Swift.

Steve Jobs also said: “If you are working on exciting that you really care about, you don’t have to be pushed. The vision pulls you.”

There are many quotes from the greatest people and entrepreneurs. Vision is undoubtedly the driver of every successful entrepreneur.

#3 Passion

Passion is deeply connected with motivation. Passion is pleasant and activating and such feelings create actions, pushing you forward. It helps setting more challenging goals, increases expectations, and needs for being successful in entrepreneurship. Passionate entrepreneurs should set higher goals because they would not be satisfied with medium results. It is also going hand-in-hand with actions, which can be a cause of passion: high efforts lead to goal achievement, growth of satisfaction and emergence of passion.

However, passion can be destructive. A recent study shows that extreme passion leads to burnout, social isolation, and emotional drain. 25% of entrepreneurs reported moderate burn out, those ones who were “obsessively passionate” reported frustration by their work. A flexible mindset, good sleep, and a hobby help to balance entrepreneurial passion and mental health.

#4 Initiative

Initiative or self-starting helps entrepreneurs to identify and exploit new opportunities, which is a core of entrepreneurship. It plays such a key role because it pushes a person from the inside (and not by other people or some outside circumstances) to change the status quo, create something new, overcome threats and barriers. Initiative saves the entrepreneur from simply copying an existing product or service, the cause of the ineffectiveness of many businesses. According to a study which was established in West Africa, training programs concentrated on personal initiative and proactive mindset have led to a 30% increase in profits (after 2 years of experiment).

Recent research by Barclays gives us very interesting insights: “The stereotypical entrepreneur often represented in the media is someone who takes risks, has clear financial goals and is very competitive, creative and single-minded. However, as with any stereotype, there are misconceptions. The results demonstrated that entrepreneurs are slightly more introverted than traditional employees, they are not particularly well organized nor are they very spontaneous”.

Joanna Opoku, a professional life and mindset coach specializing in career change, shared her opinion on career shifts and having an entrepreneurial mindset with me:

Why do you think some people trade their 9 to 5 jobs for entrepreneurship?

I think there’s more of an awareness of a different way of living. It’s becoming much more common to work flexibly, to start your own business, to have a side hustle on the side of your day-to-day job.

The idea of a job for life really doesn’t seem to exist anymore. A generation who have been born with the internet have a different concept of work and jobs to the more traditional image. The internet has opened up so many possibilities, and a more global mindset.

A lot of people don’t want to be tied to an office, the same desk and office politics day in and day out. They want to work on their own terms – in an environment that suits them, their personality, their life, their needs. They want work to fit into their lives, and not the other way around.

Office hierarchy seems so anachronistic – not everyone wants to work for someone, be told what to do, follow someone else’s vision. And the frustration of having to jump through hoops to get anything done, not having a voice, a say, not being listened to.

And some people want more control of their lives – working on what they want, with clients they choose to work with, in a way that suits them. With the ability to make money as they wish.

What do you advise to such people?

My advice would be to research. Read, listen to podcasts, speak to people. Build your knowledge and awareness of what is out there for you. How are people working, how are people living – what appeals to you the most? What seems exciting? What elements of these jobs or these people’s lives is calling to you?

Do you really want to work for yourself – or could working for a smaller company or startup suit you? A company where you have more impact and more say, more flexibility?

If you do want to work for yourself – why? What does this mean to you? What can you imagine yourself doing? Can you speak to someone doing the same or similar – and find out a bit about the reality? Can you read case studies or autobiographies to learn more?

Write – write what your ideal day would look like – forget about reality and what is expected and write how you would love to live your life. Then you can look at what you’re really saying – do you really want to live in a mansion on an island doing nothing – or is it that you’re longing for more freedom, more fun, more adventure, a simpler existence?

It’s really powerful to really be honest with yourself and forget about expectations and the path you thought you were on or should be on. When you start following what excites and fires you up – then, you’re on your way to making big changes.

And, along with research, action. You can read forever more but unless you take some form of action you won’t move on. So make that call, speak to someone whose work appeals, visit a friend’s place of work and chat to colleagues, go to talk with someone who inspires you.

Create something on the side – start selling something online (eBay, etsy), sell a service (tutoring, consulting), volunteer. Join a local group related to something that interests you. Try out new things. Get out of your comfort zone.

Which are the most common obstacles preventing people from changing occupation?

Fear – of not having work and not having any money, not being able to pay the bills; of what other people will think, family, friends, colleagues; of losing your routine and safety – moving out of your comfort zone; of losing status and the trappings of a ‘good job’; of making a ‘wrong’ decision and ruining your life…the shame of your dream not working out, and you having to return to your current job with your tail between your legs. Being laughed at.

We’re really good at building up the negatives and excuses and worst case scenarios.

Tim Ferriss has a really good framework for dealing with fear – writing down the worst that could happen, in detail. You end up out on the street, your partner leaves you, your family disowns you, you have to work the night shift in a takeaway place, you have to sell your house…really think about the worst that could happen, and how would that feel. Would you survive? What could you do in that circumstance? Would it really be as bad as that?

In my case, the realistic worst that would happen would be that I’d have no job and zero money and would have to move in with my parents to find a new job – which could take months. I’m lucky – that’s not ideal – but not that bad either. I’d survive. It helps to face the fear head-on.

Which soft skills helped you to become an entrepreneur?

Being a good listener, communicating clearly, having empathy, self-motivation, a desire to learn, problem-solving.

So there you have it – this is the mindset required to become an entrepreneur. Do you have it?

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