One definition of an entrepreneur – How to balance ego and humility. 

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.  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.  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.  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.  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.  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.”

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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.” 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.  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 “We are this non-entity in a sea of established players and there seems to be a ton of interest in us—why?” He said “Michael, 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.”

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, “Do I want to do work with this guy?”

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 that we know more about the business than everyone. For the things we don’t know, we believe that we will figure them out along the way. We often think ourselves, “I don’t have the time to learn new things or the patience to put myself last. I’ve 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 don’t know. When you first start, you think if you don’t know something or the company can’t do something, it is a flaw. It’s quite the contrary. It’s critical that you understand, recognize, acknowledge and embrace your flaws and the company’s shortcomings.

This is counterintuitive. Entrepreneurs are driven, intelligent and confident. Not knowing something seems like a sign of weakness. It’s 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 leaders—the 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 won’t 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. Let’s 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, “I 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?” Express to team members that you would like everyone’s 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:

We’d 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, “Do you know how to get back? It’s hard to make your way around here because all the halls look the same.” 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 “we told you so.” They asked if I was OK and I said, “If the CEO of your vendor can’t find his way back from the bathroom, I don