Great article from Focus Magazine.
12 Characteristics of Successful Internet Entrepreneurs
By Focus Editors
As long as there have been successful Internet entrepreneurs, there have been attempts to nail down what makes them successful. Whether it’s a fellow entrepreneur looking for an edge or an interested layperson who is simply curious to know more, no shortage of people are dying to know how the Internet’s business visionaries reached the top. These business success stories aren’t the result of a secret formula; rather, each entrepreneur possesses a number of characteristics unique to their pursuits. Here’s a rundown of 12 of these traits, the entrepreneurs who have them and the companies they helped create.
The Trait: Determination
The Entrepreneur: Steve Jobs
The Company: Apple/NeXt/Pixar
Perhaps no Internet entrepreneur has exhibited more determination than Steve Jobs. In his now famous speech at Stanford University’s 2005 commencement, Jobs explained how he was thrown out of Apple in the mid 1980s by the board of directors. “At age 30, I was out”, Jobs recalls – “and very publicly out.” The life of an entrepreneur is rarely free from anxiety, but nothing compares to being ousted from the company you founded and watching others run it once it becomes a household name. The book “iCon” reveals that Jobs apparently contemplated suicide following the crisis. While lesser businessmen would have crumbled, Jobs took his fall from grace as a challenge, starting two independently successful companies from scratch (NeXt and Pixar) and eventually returning to rescue Apple from the brink of failure, spearheading its current digital music and media-driven renaissance. Without the determination to remain in Silicon Valley, Jobs may never have returned to prominence or led Apple to the market dominance it enjoys today.
The Trait: Innovation
The Entrepreneurs: Sergey Brin and Larry Page
The Company: Google
In John Battelle’s book “The Search: How Google and Its Rivals Rewrote the Rules of Business”, readers learn that Google co-founders Sergey Brin and Larry Page were not money-chasing businessmen, but hackers who truly wanted to build the best search technology in the world. Neither of them had any clue what practical applications any of their work would have when they maxed out their personal credit cards to buy servers and computer parts; they simply knew they were onto something and felt a burning desire to bring superior technology into being. Indeed, virtually every dominant search engine of the mid to late 1990s (Lycos, Alta Vista and Yahoo! to name a few) passed up the chance to buy Google before its breakout as the Internet juggernaut. It wasn’t until the launch of Google AdWords that the company found any substantial or enduring way to capitalize on its mega-popular search engine, and that was just fine with Page and Brin. While they certainly wanted to get paid, innovation was always at the forefront and led to them getting their enormous payday.
The Trait: Frugality
The Entrepreneur: Aaron Patzer
The Company: Mint
One of the biggest misconceptions about Internet business success is that you can’t build a “real” company without fancy office space, mahogany furniture and slick corporate attire. Laying waste to this myth is Aaron Patzer, the founder of Mint.com and tireless advocate of frugality. Conceived as a way to painlessly connect consumers with money-saving deals and offer useful insight into their financial lives, Mint.com was itself a model of frugality, growing little by little and taking outside investment only when necessary to expand. This is a sharp contrast from many late 90s Internet businesses, which seemed to regard the business as an excuse for burning other people’s money rather than a vehicle for producing its own. Patzer’s frugality paid off when Mint was acquired by Intuit in 2009 for $170 million.
The Trait: Experimentation
The Entrepreneur: Mark Zuckerberg
The Company: Facebook
Even successful entrepreneurs often find themselves settling into comfort zones and developing tunnel vision about their products or services. Rather than continuously striving to tweak and improve, they grow content with what works now, almost setting it on a pedestal that one fears to fiddle with in any major way. Perhaps no Internet businessman has spit in the face of this attitude more than Mark Zuckerberg. Despite Facebook’s status as a social networking giant, Zuckerberg and Co. have never shied away from changing the user interface (sometimes in the face of protests) or shaking things up in the efforte to break new ground. Though not all of his changes have been successful, a surprising majority of them have stood the test of time and boosted Facebook’s following.
The Trait: Eccentricity
The Entrepreneur: Tim Ferris
The Company: FourHourWorkWeek.com
Read the biography of virtually any successful entrepreneur and you’ll find that they might not act quite like the general population. This trait is known as eccentricity, and few contemporary Web entrepreneurs exemplify it more than Timothy Ferris. In his perennial best seller “The Four Hour Work Week,” Ferris advocates cultivating a radically new mindset about work. Rather than seeing work as something to be begrudgingly endured for the sake of weekends and holidays, Ferris recommends molding work to the life you wish to live. Primarily, this consists of building systems to produce wealth without ongoing struggle and using the 80/20 principle to identify where your efforts produce the most and least results. Properly executed, such actions enable one to travel and live as one pleases while keeping work in its place. Ferris has utilized these eccentric behaviors to escape the 9-5 grind forever, both via book sales and his own online businesses. His story is a needed reminder that different outcomes require different behavior. Put another way, what got you here won’t get you there.
The Trait: Simplicity
The Entrepreneurs: Chad Hurley, Steve Chen and Jawed Karim
The Company: YouTube
Engineers have an old saying that drives the field to this day: KISS, or “keep it simple, stupid.” YouTube founders Chad Hurley, Steve Chen and Jawed Karim understood this better than most when they created a site that existed to do nothing more than let the average Joe upload his own videos. Without any delusions of grandeur or pretense about changing the world (which it has arguably done anyway), YouTube rose to Internet stardom by simply creating a cool, useful service that people would enjoy using daily. The fact that YouTube links are shared over IM, text, and Facebook all day long is a testament to the value of simplicity in business, and explains why Google snapped up the video sharing site for over $1 billion in 2007.
The Trait: Consumer-focused
The Entrepreneur: Paul Graham
The Company: Viaweb
No one has written more about Internet business success than Paul Graham, co-founder of seed capital firm Y Combinator. Before he invested in startups, Graham built and sold his own: Viaweb. It was during that time that Graham learned (and applied) the lesson he now preaches to new entrepreneurs: make stuff people want. Unlike so many far-fetched companies of the time, in 1995 Viaweb was focused on a single goal: enabling non-tech savvy individuals to build and run their own online stores. By zeroing in on a need for which there was very much obvious demand, Viaweb was virtually assured of being successful so long as it came up with elegant solutions to sell. It did, and was eventually acquired by Yahoo! in 1998 for around $45 million in stock. As an investor at Y Combinator and essayist at PaulGraham.com, Graham now advocates making sure your idea has demand before lifting a finger on development. Without this, he persuasively claims, all the bold press releases and product launches in the world wont save you.
The Trait: Iconoclastic
The Entrepreneur: Niklas Zennstrom
The Company: Kazaa/Skype/Joost
It might seem that iconoclastic is just another word for eccentric, but they are not actually the same. Eccentricity is simply violating behavioral norms. An iconoclast, however, generates conflict with his eccentricity by disrupting and changing the way things are done within entire industries or societies. In founding Kazaa and Skype, Swedish entrepreneur Niklas Zennstrom exhibited iconoclastic behavior par excellence. Widespread use of Kazaa’s peer-to-peer technology helped put the nail in the coffin of tightly controlled and centralized media downloading, while Skype (despite a recent slowdown) stuck it to the telecoms by introducing P2P telephony. His latest venture, Joost, is attempting to revolutionize online video in much the same way. It hasn’t always been easy for Zennstrom (who stayed out of the US for years to avoid lawsuits from record companies during Kazaa’s heyday) but in true iconoclastic fashion, he has never seen this as a reason to stop or slow down.
The Trait: Ambition
The Entrepreneur: Jeff Bezos
The Company: Amazon.com
The most talked-about Internet entrepreneurs have almost superhuman ambition. Not content to merely have a nice little business, these titans of Web industry set their sights on building epic enterprises that become part of history itself. Surely Jeff Bezos displayed ambition in founding Amazon.com, a Web portal that retails virtually any book, video game, or consumer electronic a buyer could wish to find. It took awhile for Amazon to become profitable with such a wide focus, but today it is one of the most celebrated Internet companies, and with recent product launches like the Kindle e-book reader, it figures to remain a dominant force for years to come.
The Trait: Focus
The Entrepreneur: Max Levchin
The Company: PayPal
Even prosperous businesses can be dragged under by failure to address their biggest problems head-on. When Max Levchin (above right) founded PayPal, it would have been very easy for him to neglect the rampant fraud that threatened to suffocate the company’s profit margins, turning his attention instead to how great it was that PayPal was growing at a phenomenal rate. Instead, Levchin utilized the timeless entrepreneurial characteristic of focus, making security priority number one at the fledgling online payment service. Within a couple of years, according to Jessica Livingston’s excellent book Founders at Work, fraud was largely reigned in at PayPal and the company was acquired by ebay for $1.5 billion in 2002. The lesson here is to confront (rather than rationalize away) your company’s biggest problems, no matter how well the rest of the business may be doing.
The Trait: Opportunism
The Entrepreneur: Tom Anderson
The Company: MySpace
Some of the biggest Internet fortunes have their origins in shrewd opportunism like that displayed by Tom Anderson. In founding MySpace, Anderson saw a gap between what social networking users wished to do and what inferior Web sites like Friendster allowed them to do, such as simplified photo uploading, graphical customization and music sharing. Upon amassing over 500 million registered users, MySpace was acquired by media empire News Corp. for $580 million (a figure that now appears to be a bargain in light of what YouTube recieved and what has been offered for competitor Facebook). While many have criticized MySpace for being too “messy” or “unprofessional”, Anderson’s genius was in recognizing that this was irrelevant to his target audience of teenagers, singles and musicians who simply wanted an outlet to set up their pages however they wanted.
The Trait: Flexibility
The Entrepreneur: Jimmy Wales
The Company: Wikipedia
Paul Graham put it well when he said that some goals (like winning an Olympic medal) require unswavering dedication to a fixed plan while startups are more like science, where you need to follow the trail wherever it leads. A shining example of this trait – flexibility – is Wikipedia founder Jimmy Wales. As a completly member-driven, collaborative online encyclopedia, Wikipedia has grown in a myriad directions, usually at the prompting of users rather than sweeping declarations from Wales or his team. The result has been a robust and ever-improving resource shaped by those who use it rather than those who wish to tell users what they “should” use. New Internet entrepreneurs would do well to learn a thing or two about flexibility from Wales, even if their business is not explicitly collaborative a la Wikipedia.