The Tale Of Confidence: How It Can Be An Entrepreneur's Greatest Asset And Biggest Downfall
Just as there are always at least two sides to every story, there are both good and bad things associated with what most people would consider to be an entrepreneur's most treasured trait: confidence. Of course, confidence isn't only important in the entrepreneurial realm, but also important to all individuals – without it, it's literally impossible to manage self-worth.
That's what confidence basically is: learning to value oneself and acknowledging that value, that intrinsic worth. Because a person's level of confidence is, in largest part, the byproduct of his ego, the larger the ego, the more confidence a person usually has.
However, as we all well know, having a huge ego does have its downfalls. For this very same reason, having confidence can be both a blessing and a curse.
In a recent piece in The New Yorker, titled “Epic Fails of The Startup World,” James Surowiecki points to a well-known (and rather intuitively obvious) economic theorem, by economist H. Scott Gordon, which states that – in a nutshell – the more individuals that attempt to tackle or achieve the same goal, the less likely each individual is to succeed.
This is due to the limited resources available; there are only a certain amount of people in the world acting as potential customers. There are a limited amount of resources and a limited amount of space in any market before the market becomes overly saturated, making a successful entrance into that market unlikely.
The reality is that we live on a planet with countless limits. The problem most often related with confidence is that it gives individuals selective blindness.
In this day and age, especially amongst our peers of Generation-Yers, people have access to resources that never before existed. It's never been easier to start a business – nor has it ever been more cost efficient (in most cases).
Just about any schmuck can get a bit of money together, read a couple of blogs and dub himself an entrepreneur – in fact, that's how most entrepreneurs get started these days.
We all believe that we can do it – that we can become successful. That we can beat the odds. That we can make something great out of nothing more than an idea and the drive to do so.
Quite honestly, I think this sort of mindset shows great progress for humankind; more and more people believe in themselves and believe that they can do great things. All thanks to having a little bit more confidence. It's about time that the human race, as a whole, begins to understand its potential for creating change.
Unfortunately, confidence isn't always rational. In fact, many people – entrepreneurs especially – have a knack for substituting rational thought with the confidence they feel themselves swelling up with.
Feeling confident in our own abilities gives us a sense of excitement; it fills us up with a newfound energy, a need to do something greater than ourselves and to become greater in the process. We feel that we can succeed and therefore we believe that, by default, we will succeed.
This sort of folly is the reason the fail rate for startups is so incredibly high. We think just because we are confident in our abilities and confident that we will be successful, that we will be successful by default – as if it were inevitable.
We aren't just confident that we can succeed. We're confident that we will succeed. This gives us the illusion that whatever it is that we get our hands on we can turn into something great.
We believe that the missing piece of the puzzle, of any puzzle, is ourselves – we're the special ingredient that's missing, that is necessary for an idea to take off and be the next big thing. Do you see how this is nothing more than a huge load of crap?
Our egos, our level of confidence in our own abilities, blind us. Because we believe that we are the solution to a problem, we forget about the problem entirely. Most entrepreneurs fail not because they create a poor solution to an issue, but because they don't address an issue altogether.
Sure, there may be a million entrepreneurs in the world who are all fishing in the same pond, trying to reel in the same fish, but this doesn't mean that you can't hook a whale. The issue, in my opinion, isn't that the market is saturated with entrepreneurs.
The issue is that these entrepreneurs are forgetting that they don't matter. Their confidence leads them to believe that they are what the world needs, but, in reality, what the world needs is what they can potentially create.
If they don't come up with anything worth creating, packaging and selling, then there is no purpose for them to exist in the first place. The world doesn't need entrepreneurs. The world needs solutions to problems.
We do need confidence in order to tackle the world's problems, but not blind confidence. We can't simply assume that because we can do great things, that we will do great things. Understanding what we're capable of is only the beginning – it's the warmup before the race.
If you are an entrepreneur seeking to make it big, then you will have to take Gordon's theorem into consideration, but not exactly in the sense that Surowiecki describes in his article.
If there are too many entrepreneurs fishing in the same pond, then instead of trying to use a better rod and more appealing bait, find a different pond altogether.
The most successful startups – the ones that really make it big – are those that not only provide a service, but those that create new markets altogether. Facebook, Twitter, Google, YouTube, Apple, to name a few, all managed to do one thing: create entirely new markets.
There will always be innovations to be innovated; there will always be progress to be made. New markets will be opening up sooner or later and as soon as they do, all the confident entrepreneurs in the world will do their best to drop their lines into the water.
Those who get in the earliest are most likely to catch more fish – the trick is to get in really, really early – before there is a solution or before the solution becomes widely known to the public.
The emergence of a new market isn't the emergence of a new problem – not always at least. It's, more often than not, the emergence of a new solution to an old problem. Entrepreneurs don't usually lack confidence, but what they do usually lack are creativity and innovation.
You have to remember that the point of being an entrepreneur isn't to make a profit – money is only a perk. The goal of an entrepreneur is to bring about solutions to problems. You do need confidence to do so – there's no denying that. But don't think that confidence is nearly enough, because it isn't.
There are plenty of fools in the world who are confident they will do great things in life, never bothering to define the meaning of a "great thing." If you want to minimize your chances of failure, then you better pick the right pond to try your luck in.
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