1. An appetite for smart risk-taking
The first trait that is essential for entrepreneurial success is an appetite for smart risk-taking, according to the recent Billionaire Report.
“Self-made billionaires tend to have a very optimistic attitude towards risk, focus on risks they understand and find smart ways to reduce them,” said the report.
“What’s more, their keen instinct for risk and opportunity often allows them to exit at the peak, transferring risk to others.”
The report identified three elements of smart risk-taking among billionaires, starting with a risk profile that is “skewed towards focusing on the upside and being realistic on the downside”.
“They’re afraid to lose by not capturing an opportunity, tending not to worry about the downside of a new venture failing but instead being concerned about missing out on the upside,” the authors said.
The second part of being a smart risk-taker is looking for opportunities where there is already an advantage. “In these situations the risks for anybody without these advantages will appear high and they are likely to walk away,” the report found.
And the third element is the ability of self-made billionaires to recover from failure, often by keeping enough resources to enable that recovery and being ready to “pivot” or adjust an idea until they succeed.
2. Obsessive business focus
The second key personality trait of self-made billionaires identified in the report is obsessive business focus. “Self-made billionaires are constantly scanning the world for untapped opportunity,” the report said.
“Curiosity is a core skill of most self-made billionaires we met. This curiosity is constantly driving them to look for unmet customer needs that create a significant business opportunity.”
After the opportunity is identified, these billionaires “switch to an extremely focused modus operandi in execution that some observers could call ‘tunnel vision’,” the report found.
“One interviewee compared this to a fighter pilot who focuses on the horizon and totally ignores things at the edge of his sight.”
3. Dogged determination
And the third trait that is found among the world’s billionaires is, unsurprisingly, “dogged determination”. “Billionaires are highly resilient,” the report said.
“Undeterred by failures and roadblocks, they have a tremendous work ethic. They confront and overcome obstacles, persevering in the face of adversity.”
“Our interviews showed that self-made billionaires often tend to be serial entrepreneurs who learn from their mistakes and doggedly work towards great wealth creation.”
But while there may be a clear link between these three personality traits and high levels of wealth creation, Eve Ash, psychologist and chief executive of Seven Dimensions, told SmartCompany the same traits are often present among all business owners and entrepreneurs.
“Certainly the optimism factor, which is coupled with clever risk-taking,” Ash says. “It’s the feeling of not having the fear or being able to manage what some other people might find paralysing.”
Ash says often a positive experience that came about by an individual taking a risk can contribute to this trait, as can an upbringing in a family that encouraged entrepreneurship. Although Ash says sometimes this can work in reverse, with the children of a family where the parents worked in long-term jobs for other people instead choosing to “break away” and start their own company.
The billionaires analysed in the report have generated combined wealth of $US3.6 trillion, with US-based entrepreneurs having created the most wealth, especially in the technology and finance sectors.
However, the report found “Asia’s new industrialists, consumer product tycoons and real estate investors” are also in the mix, with rising real estate and capital markets playing a strong role in the creation of new billionaires.
Self-made billionaires usually start young but most do not hit the billion-dollar mark until well after they turn 40. Close to a quarter of billionaires looked at in the research (23%) launched their first business venture before the age of 30, while over two thirds (68%) got their first venture off the ground before turning 40.
Having some corporate experience appears to pay off, with almost half of the billionaires having worked in a large organisation before going solo. A large majority (82%) had completed tertiary studies.