One definition of an entrepreneur –ย How to balance ego and humility.ย
The definition of an entrepreneur depends on who you talk to. And so does being a leader. But regardless of the definition, there are two things that entrepreneurs must have – ego and humility.ย Successful entrepreneurs understand that you need a healthy dose of both. Even though the dominance of one can often mean the downfall of a really great idea or team or vision.ย The definition of an entrepreneur is someone who knows the right mix of both. We are here to answer a few questions including:
- Why does an entrepreneur need ego?
- Why does an entrepreneur need humility?
- What is the right combination of ego and humility?
We entrepreneurs are always looking for tips and insights and advice. However, at our core we must be able to bring to the table our ego and our humility and create the right balance of both to be a great entrepreneur and leader. As we all know, the entrepreneur’s mindset is as important as anything and understanding the right balance of ego and humility can make the difference.
The Role of Ego In Being an Entrepreneur
Every entrepreneur believes what we are doing is unique.ย And in many (in fact most) cases, it is not only that we are doing something unique, but that we are bringing to life a new business model, idea or vision.ย To have the vision to bring something new to the table, you need to to have a level of self-confidence and self esteem that can transcend what you are likely to face. In fact, the more visionary your idea is, the more ego you need to see it through.
Imagine the level of self-confidence and belief visionaries like Bill Gates or Elon Musk or Steve Jobs needed to see their vision through. Remember, it is not just convincing a market that you and your new idea has merit. It’s also facing all of the naysayers that believe that if something has not been done before, there is a reason for that.
Take investors. The critical analysis that many investors bring to the table will tell you that your idea does not have merit.ย In fact, you may have two meetings with investors an hour apart – and in one meeting the investor will say your idea is too different and in the second they will say that it is not different enough.
“A famous Supreme court justice once said when asked to define “pornography” in a famous First Amendment case, “I don’t know the definition. You just know it when you see it.”
We Need Our Ego
The ego we possess as entrepreneurs – and the belief that goes with it – allows us to create a faith in our vision. That faith is often in the face of many detractors, the facts on the ground and the track record of others. President John F. Kennedy said “we go to to the moon…not because it is easy but because it is hard.”ย How many times do you prepare for a big investor meeting and after your well-rehearsed pitch, they dismiss your idea as “OK.” You don’t have to have a big ego, but boy does it help when potential investors tell you that your baby is ugly. The entrepreneur’s ego can be his or her best friend.
Sometimes We Need a Big Ego
How many times was J.K. Rowling, author of Harry Potter rejected by publishers? According to most accounts it was twelve – including some of the most prestigious publishing houses in the world.ย We have all heard the stories of rejection from some of the world’s most successful entrepreneurs and business leaders – Sam Walton, Howard Schultz, Ray Kroc – and the list goes on. The more audacious the goal, the more you need your ego to stay true to the vision.
Our Ego Makes Us Persevere Through Failure
There are so many times during the entrepreneurial journey we will face challenges and failure. In fact, we often face it every day. Every day we will face rejection – in many cases it is just the nature of the entrepreneurial beast. We must realize the setbacks and failures don’t happen in a vacuum or in an antiseptic environment of a large company. We take them personally. Many of us lose sleep over them. Many times our emotional and financial future hangs in the balance. It is often our ego – our sense of belief in ourselves that sees us through.
Ego Served Us Well At Times
In my previous company, I was trying to convince the the healthcare industry to reward people for being healthy. Makes sense right – we reward people and the systems saves money by not incurring the costs of bad health. Back then (2000), for every ten pregnant women who did not follow their prenatal care, it costs the healthcare system $1 million. It just made sense to reward them.
Back then, not only did this concept not exist in the healthcare industry – it was offensive. The industry said to us “we are never going to pay people to do the things they should already be doing.” We told them they would – and it was just a matter of time before they realized what every other consumer industry did – that they had to reward behavior to drive it. But it took more than a little ego to tell the industry that controlled one out of every 6 dollars in the economy that they were wrong.
Ego Can Replace Advertising
In the trade shows we attended, we never did any promotions and yet attracted enormous interest. On the last day of one of these events, the head of our marketing firm walked the trade show floor with me. We had a productive day and at the end I asked him โWe are this non-entity in a sea of established players and there seems to be a ton of interest in usโwhy?โ He said โMichael, when you talk about what you are doing with your company (IncentOne), it comes across as though the train is leaving the station and it is only a matter of whether others will be smart enough to jump on board. It seems like IncentOne is going places by the way you communicate.โ
Ego and Arrogance are Different Things
This is not to suggest that you should be arrogant. You believe in what you are doing. It was enough for you to leave your job, burn your savings, and sacrifice a normal life. Now is not the time to be modest.
To accomplish many of these lofty goals, our job requires, as noted above, confidence that accompanies a healthy ego. When that confidence shifts to cockiness, you run a great risk. There are times people do business with you because of your business value. There are other times they do business with you because they like you. When you demonstrate cockiness, you make customers and employees think to themselves, โDo I want to do work with this guy?โ
A Story
When we started IncentOne, we were committed to being a B2B solution and avoided the consumer market. We had a lot of pressure to target the consumer market since we had a network of gift cards and the market was giving huge valuations to dot com business-to-consumer companies. We scheduled a meeting with a potential competitor, giftcertificates.com. They told us, in no uncertain terms, they would create the currency for the internet and that it was a matter of time before companies like ours would be gone.
We respectfully disagreed, thanked them for their time, and went our separate ways. Their arrogance always stuck with me. Years later, when the consumer market had collapsed, I was contacted by one of their investment bankers asking if we would consider buying them. I asked if the current management team was the same as it was a few years ago. It was. I declined.
You must bring your ego to the table. Turn that ego into arrogance and you will pay the price.
How do ego and humility go together?
Seems like a contradiction – doesn’t it? I just got done telling you that you need your ego and the confidence and self-esteem that usually accompanies it to succeed. There is no magic entrepreneur tip or trick to this – it is a matter of the understanding of how the role of both advance your business.
Since When Are Founders Humble and Learners?
As the founder of a business (and even an idea), we believe thatย we know more about the business than everyone. For the things we donโt know, we believe that we will figure them out along the way. We often think ourselves, “I donโt have the time to learn new things or the patience to put myself last. Iโve got to do what I need to do and I need to be aggressive to make it happen quickly.”
One of the most important lessons I learned at IncentOne was that it is a blessing – not a curse – to acknowledge when you come across something you donโt know. When you first start, you think if you donโt know something or the company canโt do something, it is a flaw. Itโs quite the contrary. Itโs critical that you understand, recognize, acknowledge and embrace your flaws and the companyโs shortcomings.
This is counterintuitive. Entrepreneurs are driven, intelligent and confident. Not knowing something seems like a sign of weakness. Itโs the opposite, the day you understand and acknowledge your weaknesses and embrace the power of learning is the day you make great progress.
Humility is a trait of strong leaders
Humility is a trait of strong leadersโthe type of leaders employees want to work for and investors want to fund. One of the most important days in the history of IncentOne was when I realized being a CEO was a skill that needed to be developed with the same perseverance, ferocity and willingness to learn that athletes apply to their training. It was no different than ballet or working on your golf game. This is one of those skills that must be genuinely developed. Once you embrace this as an opportunity, it lets air out of your balloon. You wonโt be wasting time criticizing yourself for a lack of knowledge, and instead you will embrace the opportunity to learn and grow.
Humility works in the entrepreneur’s journey
Take the example of how to get team members aligned to a plan or objective. Letโs say your team is skeptical of your perspective on how to release the beta of your product. There are two ways you can handle the same issue. One approach would be to tell them what to do. Another approach would be to introduce the topic and say something like, โI was wrong about how to approach our alpha version and wanted to make sure we got it right this time. My initial gut is that we should launch in the summer, but what do you think?โ Express to team members that you would like everyoneโs feedback on the approach.
Humility builds trust and credibility
Being humble and acknowledging the error of your ways is also a great way to build trust and credibility:
Weโd been selected as a finalist for an RFP for CIGNA to be their incentive vendor and I was leading the presentation. During a break, one of the CIGNA employees directed me to the restroom and said, โDo you know how to get back? Itโs hard to make your way around here because all the halls look the same.โ I said I was fine. After about a half hour of walking around while my team was presenting, I walked in the door. Everyone smiled with that sheepish look of โwe told you so.โ They asked if I was OK and I said, โIf the CEO of your vendor canโt find his way back from the bathroom, I donโt think you should hire us to run your incentive programs.โ Everyone laughed and we moved on. We wound up winning the RFP. Iโm sure that was not the reason why, but I think they knew they were partnering with someone who was real.
Another Story
It was embarrassing that I could not find my way back, but not as embarrassing as what happened two years later only a few miles away at Aetna, one of CIGNAโs main competitors:
We had been selected by Aetna as a finalist for their RFP for incentives. We had been working on this client acquisition for two years and it was down to us and one other company. At the final meeting, there were five members from our team and about twenty five Aetna participants. As my team set up for the meeting, Iย went to the menโs room. When I was done in the bathroom, I washed my hands and then squatted down to stretch. All I heard was a tear in the back of my suit pants. This was not a minor tear. I had torn my pants from the seam behind my derriere to my inseam. It was hard to walk without exposing my backside. The meeting was starting in ten minutes.
I was slated to present for about two hours of the three-hour meeting. I always loved these opportunities to show our wares, but some of our team members were anxious in these environments. Right before I was about to start, as people were settling in for the meeting, I went over to the table (rather shimmied over to the table), and said, โlook at this,โ and showed them the rip in my pants. They all got a good laugh and it seemed to break the tension.
Humility and insecurity are different things
When you demonstrate humility and embrace learning, you can unlock great things in your team. However, humility has to be balanced. First, it has to be balanced with a sense of confidence. If this humility is not balanced with strength, you can undermine the teamโs belief in you and in the business. The key is finding the right mix. Second, humility has to be genuine and never used to manipulate. When team members see their leaders genuinely willing to acknowledge mistakes or deficits in a particular area, it inspires them to discover their own confidence to act, take risks, and evaluate their own deficits. This leads to genuine improvement and self-development that will have many positive impacts for your company. But donโt forget, it starts with you.
What is the magic mix of ego and humility?
It is two parts ego and 8 parts humility. Just kidding. There is no magic formula. But here is what i would suggest are the two guiding principles that dictate how ego and humility fit together:
- You are the leader and are there to serve your constituents – customers, investors, employees and partners.ย When you embrace this perspective, it tends to align your ego and humility.ย Leaders that think this way are always thinking about serving the needs of others – not their own. In fact, this perspective was essential for me when my company was almost destroyed in the 2008 financial crisis.ย People have since asked me, “how did you stay focused and sane when the world around you was collapsing an everything you had build was teetering on the edge?”ย My answer was and is this – it wasn’t about me. It was about all of the people that I asked to join my vision. I had asked them to invest their money, sacrifice their time, trust me with their business (or their lives) and to make personal choices. I woke up every day and understood that it was my responsibility to serve them. My ego would have to wait.
- It is a privilege to be an entrepreneur and be on the pursuit of a more fulfilling life by bringing your vision to life.ย Unfortunately, there are so many people that spend their lives in jobs that don’t allow them to unlock their best self. To have the opportunity to wake up every day and pursue your passion is a true gift. What comes with that gift is the responsibility to embrace that opportunity and get better at it every day. If you honor that gift and understand how luck you are to be an entrepreneur, your ego seems to fit nicely side by side with humility.
How do you know the right mix of humility and ego?
A famous Supreme court justice once said when asked to define “pornography” in a famous First Amendment case, “I don’t know the definition. You just know it when you see it.” The same is true when it comes to being an entrepreneur with the right mix of ego and humility.
This is just one of the skills you need to learn and hone over time. There are times where you think you need to be bold (e.g., telling people what to do) and in fact by being humble (e.g., giving them rope and letting them make mistakes) you will gain more. Like we always say, success depends on being a better entrepreneur each day. And the mix of ego and humility is just one of those skills.