We asked investors what prevents them from investing in an entrepreneur most often. Their number one answer? Ego. This post is about why humility matters for entrepreneurs, and heck, for human beings.
To develop our selection process at the Unreasonable Institute, we surveyed a number of well-reputed investors with good track records for selecting successful entrepreneurs.
What prevents investors from investing in an entrepreneur most often? Ego. Tweet This Quote
We asked them: “What single characteristic is most likely to predict failure in entrepreneurs?” The answer we got time and time again, especially from the good folks at TechStars: ego.
Humility, therefore, is paramount to being a successful entrepreneur and something we search for in our Fellows. Here are three reasons why entrepreneurs should strive to be humble:
1. Powerful relationships
Humility, or in this case, the belief that you have something to learn from whomever is sitting across the table from you, is crucial to having this genuine curiosity in other people. One of the things that I admire most about International Development Enterprises (IDE) Founder and Unreasonable Mentor Paul Polak is his willingness to learn from anyone, even illiterate women earning less than a dollar a day.
Humility is paramount to being a successful entrepreneur. Tweet This Quote
In fact, in a video interview we conducted with him, he cites this curiosity in what the poor had to say as one of the most important reasons why IDE has been able to lift over 20 million farmers earning less than a dollar a day out of poverty.
2. Agile development
We learned from Unreasonable Mentor Elnor Rozenrot (former VP of Growth Platforms at LG) that 90% of successful ventures start out with the wrong business plan.
Successful entrepreneurs, therefore, don’t become too attached to the way in which they create impact but to the ultimate impact they want to create (with the exception of values, like non-violence for Gandhi).
Altering course, even after tremendous time and energy has been spent in developing a strategy, requires an ability to admit mistakes and a need for change that stems from humility.
Successful entrepreneurs don’t become too attached to the way in which they create impact, but to the ultimate impact they want to create. Tweet This Quote
3. Honesty and growth
It turns out that admitting mistakes is remarkably challenging. That’s why most companies attempt to present a veneer of perfection to the outside world. But that’s the kind of thing that just turns people off. As Daniel writes about in his blog post on building relationships, strong bonds form when people are willing to be vulnerable with each other. And it’s no different with companies.
TED’s Chris Anderson explains in this YouTube talk (around minute 25:00) that one of the best ways that companies could gain the trust of the public is to be forthcoming about what they aren’t doing well, instead of trying to present a veneer of perfection. And not only is that likely to improve their standing in the court of public opinion, it’s often likely to get them the help they need to do better.
Companies can gain public trust by being honest about the things they don’t do well. Tweet This Quote
We experienced this ourselves when we first launched the Institute. The crowdfunding platform we built and required entrepreneurs to raise our $6,500 tuition through completely crashed right after launch. 8,000 people were there to see the site go down, and our inboxes quickly began filling up with emails announcing people’s “total loss of faith in us” and “refusal to ever support the Unreasonable Institute again.”
We did the only thing we could do. We sent all our entrepreneurs and 8,000 visitors an email telling them we messed up. We weren’t prepared for launch. We told them the steps we were going to take to fix it (firing our developers and bringing on a few new folks), as well as when we were going to have things ready.
Sharing failures publicly keeps us humble and reminds us that we have more to learn. Tweet This Quote
The response was incredible. The very same people who promised they’d never support us again wrote us emails saying “every startup goes through this” and “we’re pulling for you.” Someone even sent us the poem If by Rudyard Kipling to inspire us through this difficult time.
It keeps us humble and reminds us that we always have more to learn.
A version of this post originally published on UNREASONABLE.is in July 2013. It has been updated and reposted to inspire further conversation.