The illusion of understanding entrepreneurial success

Whenever successful entrepreneurs are asked for the secrets of their success, it strikes me that their answers inevitably involve one or all of the following: (1) persist, i.e. do not give up; (2) learn from your mistakes; and (3) give the customers what they want.

I have always found it troublesome that such advice sounds too simple, that there must be someting else, the secret that makes such entrepreneurs special. But perhaps there isn’t. Perhaps entrepreneurial success is indeed built from the iteration of these simple rules.

Why – I hear you ask – isn’t everyone successful then? I see the answer in the fact that entrepreneurial outcomes – huge success, failure and everything in between – are chaotic. The key to understanding the term chaotic is not to confuse it with random. Both chaos and randomness imply unpredictability but in different ways.

Randomness is what creates lottery winners and it is clear to us that there is no secret to becoming a lottery winner. Hence we never invite lottery winners to speak about their success. This is because random outcomes are non-deterministic, i.e. there is no particular reason why they happen; they just do.

Chaotic outcomes, on the other hand, are deterministic but unpredictable. In other words, the rules that generate the outcomes are clear. They can be very simple but iterative, that is applying the rule over and over. Just like persisting, learning and responding to customers. In entrepreneurial settings, such iteration traces non-linear paths, which means that there is no telling where you might end up. Miniscule differences at the outset can end up widely apart. I love the analogy of kneading dough. If you put two chocolate chips next to one another and continue by pressing, stretching and folding – simple, iterative rules – there is no telling where the two chips will end up in the final form.

Many successful entrepreneurs say that entrepreneurship is simple. It indeed is – the action rules are simple. There is just no telling where you will end up.