Ego, Self-Efficacy and Luck in Entrepreneurship
Ego has no place in a startup. Confidence and perseverance are required — and so is a little luck. Or, at least, that’s what so many people think.
In his book “Scar Tissue,” Daryl Erdman writes a section on the “seven habits of spectacularly unsuccessful people,” noting that “the ego is tied up with the company image and, thus, the owner/CEO spends too much time as the spokesperson and/or being out front” (219). “My advice,” he writes, “Bury the ego early” (130).
I thoroughly examined these “seven habits” in order to make sure I wasn’t on the list. I was satisfied; the purpose of my new brand is to focus on artists and the art of others. While I mention my skills and experience to show what the company’s founder can offer clients, I have removed the “me” factor from this new brand.
One month after completing Erdman’s book, I went through a personal event that led to deep self-reflection. I again stumbled upon this “seven habits” section of the book and realized that, while I don’t exhibit these traits in business, I exhibit these traits in my personal life. The first of the seven items is the most prevalent: “Seeing oneself and one’s company as dominating the environment and, hence, not worrying about responding to environmental factors that could have an impact” (219). The other points can be described as: identifying relationship interests and self-interest as one in the same; being a control freak; expecting others to be as invested as you and rejecting them if they are not; pretending difficult obstacles are easy; and, perhaps most importantly, “falling back on earlier strategies/tactics that worked in the past.”
One relationship is not every relationship, and what functioned at one time may no longer work for a new relationship. This ties into the aforementioned inability to identify new and changing environmental factors.
What I mistook in my personal life as “having my shit together” was actually my need to place a projected persona on a pedestal for others to see. While this didn’t come from a place of egotism, it came from a place of ego, protecting a part of me that I had, for years, neglected.
Sociologist and life coach Martha Beck believes “the way we do anything is the way we do everything.” Your personality traits and background will influence your work life and how you interact with those around you. It’s important to feel successful in your personal life before you can feel successful in business, as things that hinder your growth in one area may hinder your growth in another.
Owner of over 20 Cricket Wireless chain stores, Anas Almaletti said his greatest piece of business advice is to be “compassionate to both yourself and others.” In order to become a strong and successful leader in business, I need to identify my weak points and take care of myself so that I can take care of my future as an entrepreneur.
As in interpersonal relationships, people’s success in the business world can arise after many failures. A number of entrepreneurs have spoken of their first – or first several – start-up failures, such as Anything But Beer’s Logan Bonney and his multiple prior attempts at a fruitful beverage company, or Gilded Social’s Scott Friedberg and his failed “toilet video” endeavor. It takes a confident and self-motivated individual to push through personal and professional struggles in order to achieve a goal. This isn’t “ego” — it’s self-efficacy.
In her 2008 Wall Street Journal article “If at First You Don't Succeed, You’re in Excellent Company,” Melinda Beck describes the idea of self-efficacy as “the unshakable belief some people have that they have what it takes to succeed.” This can be an inborn optimism, or it can be learned. Self-efficacy differs from ego in that “it’s a judgment of specific capabilities rather than a general feeling of self-worth,” Beck explains.
My own introspection led me to the idea that I had been a people-pleaser. I’ve come to realize many of the unsuccessful entrepreneurs I know exhibit similar traits, including over-functioning or “the overworking you do to prove your worth,” as business psychologist and author Sherrie Campbell explains. “This crazy hoop-jumping attitude causes you do things you don’t want to do because you are afraid of how you'll be judged for not doing it,” she notes, adding that people-pleasers must be confident in stating their own boundaries and saying “no” without guilt. Know your self-worth, stop apologizing, and make firm decisions.
Of course, many people-pleaser attributes can hinder growth; there is no way to please everyone. I had often lowered my worth in order to accommodate others. Until very recently, I was often indecisive and focused so much on potential outcomes that I didn’t even make a move in the first place.
Cliff Carey, owner of online fashion retailer American Reserve Clothing Co., said in a recent lecture at Whitman School of Management, “There is only one thing we do in life alone, and that is to decide.” Carey has been successful in life due to the fact he expresses his thoughts and turns them into actions. Just after graduating with a B.A. in English, he needed a job and applied for a sales position at Target. His thoughtful delivery during the interview instead landed him a job as efficiency expert.
Success isn’t just tied to the ego – or lack thereof – it’s tied to what some consider “luck.”
It may seem like luck played a role in Carey’s job interview. This position ultimately allowed him to move forward at his next company and eventually launch his own business. But it wasn’t luck — it was his outlook on life. His belief that he would be successful and his self-efficacy led to increased opportunity for that success. Ultimately, Carey created his own self-fulfilling prophecy.
In his 2003 article “The Luck Factor” published in The Skeptical Inquirer, psychologist and professor Richard Wiseman recounted the findings in his 1990s research study on the idea of “luck”:
“My research revealed that lucky people generate their own good fortune via four basic principles. They are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.”
His tests ranged from pictorial to verbal to personality tests conducted on self-proclaimed lucky and unlucky participants. “Personality tests revealed that unlucky people are generally much more tense and anxious than lucky people, and research has shown that anxiety disrupts people’s ability to notice the unexpected.”
In my own life, I find that I can sometimes become so focused on something negative that I miss the positive. In effect, I can spiral down one pathway and miss opportunity to see other sides of the issue at hand. At one time, I felt this way about prospective clients; if I hadn’t heard back from them, or if they had received a consultation and decided against my services, I would focus on all the possible things I had done to offend them. I came to realize instead that a prospective client could have reservations based on their own circumstances that are not tied to me.
In his New York Times bestseller “Heart, Smarts, Guts, and Luck,” entrepreneur Tony Tjan describes the ruling traits of business-builders. One of these traits is “luck,” as described in Figure 1:
Tjan explains there are, of course, different types of perceived luck: circumstantial, constitutional, and dumb luck. It is “circumstantial luck,” the idea that you are in the right place at the right time seemingly by chance, to which most business people refer.
While my own self-efficacy and optimism drive me, I can hold myself back and often feel defeated due to lingering defeatist traits. The phrase “two steps forward, one step back” describes the idea that growth is occurring but is still hindered by other issues. This has certainly applied to me in the past, and I am learning how to overcome the past in order to make a successful future.
Ted Devine, CEO of online insurance company Insureon, also acknowledges that luck isn’t necessarily intrinsic but is self-made. In his Entrepreneur Magazine article “Good Luck is Good Business – Here’s How to Make Both,” Devine states that people who are optimistic and able to see the “bright side” of things are those who can see the good in what may otherwise appear bad. “By doing that,” he writes, “you’re establishing yourself as already lucky, which sets up positive expectations, which leads to positive outcomes.”
Lucky people know how to say “no” and hold themselves to certain standards that encourage their success. These same individuals also know how to say “yes” to new opportunity. In essence, you must be able to see the bright side of things in order to recognize positive versus negative opportunities. In doing so, this person creates his or her own seemingly fortuitous circumstances.
For instance, circumstances may place a budding entrepreneur at a party beside a successful venture capitalist. This idea of being in “the right place at the right time” is often confused with luck. Naturally, by increasing the number of new opportunities they seize – attending a party – an entrepreneur’s chances of being in the right place at the right time also increase.
Olga Litvinenko, CEO of new fragrance company Lola & Leone, exemplifies these ideas on self-efficacy and circumstantial luck. The young entrepreneur was inspired to start her own company after an accident led to the death of her friend Leone. While she graduated school and found a job, she felt unfulfilled. Litvinenko attended several events and wore a special perfume she had personally crafted while studying abroad. After many compliments on her handcrafted scent, she decided to honor her late friend by turning this fragrance into company “Lola & Leone” — but she didn’t know where to begin.
At the time, Litvinenko was serving as area President of the cancer research non-profit T.J. Martell Foundation. She attended a foundation Women’s Lunch event and spoke of her new interest in the fragrance world. The woman in whom she confided ushered Litvinenko across the room and introduced her to the person with whom she’d work to launch her company.
Litvinenko’s ability to turn the negative of her friend’s death into a positive by honoring his passing allowed her to see opportunity in the idea of a fragrance company. Eyes wide open, she continued to live her life, attending events and speaking with new people. In doing so, she placed herself in a position where opportunity lay. Or, as some may say, she opened herself to increased “circumstantial luck.”
It takes both skill and passion to get to the point of perceived “luck,” and even more self-motivation to move forward and launch your own business. Entrepreneurs should be aware of how their personalities and traits play into their work, and keep their eyes open to opportunity.
In the words of Coleman Cox, “I am a great believer in luck, and I find the harder I work, the more I have of it.”