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Are You Suited to Entrepreneurship

Do You Have the Right Kind of Confidence?

What does it take to be an entrepreneur? I believe genuine success comes if – and only if – you have the right kind of confidence. And that means you need two forms of it, not just one. I call these Level 1 and Level 2.

G. Richard Shell




Level 1 confidence – basic life stuff

The first level of confidence is the “genuine” part of “genuine success” above.

This kind of confidence is the anchored self-assurance that comes when you are at peace with yourself and the basic stuff of life: love, authenticity, and acceptance of your place in the world. If you lose the anchor of Level 1 Confidence, you can run your business for a while and even make a lot of money.

But you are basically running away from life – chased by your fears – not running toward it urged on by your dreams. In my book, people who live that way are failures, not successes.

There are many pathways to Level 1 Confidence.

Take’s Jeff Bezos for example, he displays clear signs of Level 1 Confidence.

Look at the way he talks about and treats his family. He seems to have a deeply respectful relationship with his wife, MacKenzie. He once said that the quality he most wanted in a spouse was resourcefulness.

For Bezos, Level 1 Confidence comes (at least in part) from having someone at home who has his back. Consistent with that, he has kept his family life sacred and out of the public eye.

As an entrepreneur, ask yourself: what are my sources of Level 1 Confidence? They could include your love of nature, family, friends, or even memories of challenging rites of passage you endured and overcame – such as military service, a disability, or personal crisis.

At all costs, protect these sources of reassurance that you are a good, capable person with a secure and honourable identity.

Level 1 Confidence is the foundation for your life — not just the foundation for your enterprise.

Level 2 confidence – sink or swim

That brings me to Level 2 Confidence. For an entrepreneur, Level 2 is the confidence-in-action you need to jump into the next stage of whatever you are doing – to take risks, fail, and then get back on your feet to take even more risks.

A big part of Level 2 Confidence is what Stanford psychologist Carol Dweck calls a “growth mindset.” People who lack the growth mindset avoid situations where failure is a distinct possibility. That’s because they view failure as a threat to their Level 1 Confidence.

Failure makes them feel unworthy. It confirms their overall lack the ability to succeed.

An entrepreneur’s growth mindset prompts him or her to seek out tough challenges. With abundant Level 2 Confidence, entrepreneurs believe that they will learn more from failure than success.

In fact, they are somewhat suspicious of success that comes too easily. They have learned to fail.

Learn to tell the difference

In my teaching at the Wharton School of the University of Pennsylvania I have developed a simple diagnostic test based on my “right kind of confidence” theory.

If an entrepreneurship student is using his or her MBA as a “hedge” against failing as a start-up, that tells me they lack the genuine growth mindset that has allowed Jeff Bezos to run the world’s largest online store by embracing risk, taking chances, and learning from failures.

On the other hand, if they are in the program to learn as much as they can – but would drop out of school to exploit a once-in-a-lifetime business model opportunity, then I am ready to get out my chequebook and invest in them.

These are the people who have what even the Wharton School cannot teach – the right kind of confidence.

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Video: Teaching Kids To Be Entrepreneurs…Click Here


Do you agree that confidence is an important character trait for entrepreneurs to have? Tell us in the comments section below…

G. Richard Shell teaches the popular "Success Course" at the Wharton Business School at University of Pennsylvania. His new Springboard: Launching Your Personal Search for Success (Penguin/Portfolio, 2013), coaches readers to define success for themselves and then shows them how they can achieve it using their unique talents and abilities. He is also a recognized expert on negotiation and persuasion whose books are available in 14 languages worldwide. His website is


Are You Suited to Entrepreneurship

Why Optimism Isn’t Enough – You Need To Also Accept The Brutal Facts

Entrepreneurs tend to depend on optimism in the same way that fish depend on water. It’s absolutely crucial for survival. In fact, it’s arguably the single most important character trait that a successful entrepreneur can have, but it also has a dark side…

GG van Rooyen




A realistic path to success

  • Lead with questions, not answers
  • Engage in dialogue and debate, not coercion
  • Conduct autopsies without blame
  • Build red flag mechanisms.

No matter how bad your day’s going, it’s probably nothing compared to your average day at the ‘Hanoi Hilton’. This was the euphemistically-named prisoner-of-war camp (actually called Hoa Lo Prison) where American soldiers were interned during the Vietnam War. Pilot Jim Stockdale was shot down on 9 September 1965 and sent to the prison. While there, he was tortured, denied medical attention, kept in a windowless cell and locked in leg irons at night. Stockdale spent almost eight years in the prison, and while many other American soldiers died there, he survived.

This brings us to the topic of optimism. You don’t survive eight years in a prison camp by giving up hope. Despite almost impossible conditions (and odds), you need to stay optimistic. Stockdale never lost hope.

“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade,” Stockdale later said about his time in the prison.

Related: Shark Tank Funded Start-up Native Decor’s Founder on Investment, Mentorship And Dreaming Big

The Stockdale paradox

So, Stockdale was an optimist right? Yes, but it’s a bit more complicated than that. Jim Collins interviewed him while writing his seminal book Good to Great: Why Some Companies Make the Leap… and Others Don’t. After hearing how Stockdale refused to give up hope and stayed optimistic throughout his internment, Collins asked him who didn’t make it out alive.

“Oh, that’s easy,” he replied. “The optimists. They were the ones who said: ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say: ’We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.

“This is a very important lesson. You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

From this, Collins identified one of the key things that differentiated great companies from others: The ability to accept brutal facts. Greatness demands optimism, but not in the face of obvious disaster. Collins called this the Stockdale Paradox.

Too much optimism

What happens when a bunch of executives enter a boardroom with their charismatic founder? The founder is optimistic, inspiring… and demanding. He has absurd expectations. He wants the impossible. (Steve Jobs was a good example, who employees said had a ‘reality distortion field’ around him). The executives are eager to seem equally gung-ho, of course, even those who know that a crucial deadline won’t be met, so the brutal facts are ignored.

“We’re going to be shipping product by Christmas,” they all say. And Christmas comes, and Christmas goes. Then they say: “We’re going to ship by Easter. And Easter comes, and Easter goes. And then Thanksgiving, and then it’s Christmas again…

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

An overdose of optimism is a dangerous thing. While optimism is a crucial tool in the entrepreneurial kit (especially when it comes to motivating employees), it can lead to disaster if administered too liberally. Like morphine, a sensible amount can take the edge off a scary reality, but too much will distort reality to such an extent that you become oblivious to existential threats.

And how do you keep your company off the morphine? Collins suggests four things: Lead with questions, not answers. Engage in dialogue and debate, not coercion. Conduct autopsies without blame. Build red flag mechanisms. If you do this, optimism becomes a powerful tool, and not a ticking time-bomb.

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Are You Suited to Entrepreneurship

Alan Knott-Craig Weigh In On Living Your Entrepreneurial Dream

From raising capital to getting the most from your employees, business ownership is all about living your dream.

Alan Knott-Craig




How do I chase my dream? — Sam

First, you need money. Moola. Cash. Capital.

Chasing your dream without enough capital is akin to having a premature baby. All the baby’s energy goes into survival rather than growth. Start-ups are not about survival (paying the bills). They’re about growth (getting rich).

Before you chase your dream, make sure you have enough capital. Keep your lifestyle simple and living costs down. Save up enough to last two years. Or marry rich.

I’m considering selling my business. I need help. — Clark

Before you enter M&A conversations, first decide: “Am I a seller?”

You won’t find it easy backing out during negotiations. Don’t start a process you can’t finish. Don’t look for buyers if you don’t want to sell.

Most people I know that sold their business regret it, unless they had a very specific reason: i.e. the business was about to die, or the business can’t grow without a big brother, or they want to leave the country. If that’s your reason, go ahead and sell. If it’s simply to have a pile of cash, reconsider.

Related: Your Questions Answered With Alan Knott-Craig

What are you going to do with the money? Put it in your bathtub and wash yourself with notes? Buy fancy cars? Buy a fancy spouse?

Lots of money in your pocket can only tempt you to the dark side. Eventually you’ll get bored and you’ll want to start a business again, and you’ll start all over. If you don’t need to, don’t sell.

How do you instil an ownership mindset in your staff? — Johan

It’s hard to work with people that have no drive. Some people just come to work and go home with no planning or vision or energy. Start with getting rid of the bad apples, then start fine-tuning recruitment to only let in the folks with a good attitude.

Use some of these methods to motivate and encourage buy-in from staff:

  • Ask staff for feedback.
  • Do not tolerate mediocrity.
  • Make sure everyone knows their job.
  • Share information. Keep everyone in the loop.
  • Look after your staff and they’ll look after you.
  • Lead by example. Pick up litter. Be first to office. Be last to leave.

How do I determine what venture to dedicate my energy to and when do I know when to stop pursuing one of the opportunities? — Mike

Go with whatever gets traction first. Ruthlessly scratch everything else off your to-do list. Generally speaking, go with the business with the most tried-and-tested business model. 

I left my former employer to move away from the legal side of things. I know that I have the technical skills in this area and I have used that in completely running the legal side of the micro lending venture, but the ultimate aim is to be an entrepreneur/businessman rather than constantly seen as the ‘lawyer’. Do I discontinue the legal consulting or slowly taper off? — Mike

If you can live without the sideline income, do so. Focus 100% on business. If you need the money, keep selling hours on the side.

Related: Alan Knott-Craig’s Answers On Selling Internationally And Researching Your Idea

I have a very successful farm store. I’m considering expanding countrywide. Any advice? — Elo

Ask yourself “why?”

If the answer is to get rich, that doesn’t necessarily mean you need to scale your successful farm store.

Maybe a better option is to take the free cashflow of your farm store and invest it in a different business. An annuity revenue business. A business that will make money while you sleep, rather than only when you’re behind the till. Cash cows are hard to come by. If you don’t want to lose your cow, don’t try to scale it unless you’re 100% sure you never have to sell it.

Can you help me flesh out the detail of a pitch to investors? — Mamkhele

There’s only so much you can rely on others for. At some point, you need to man up and do the work yourself. You need to answer the questions yourself. The answers for all pitch-related questions are on the Internet. Google it. No one will save you, only you will save you.

Listen to this

Alan’s audible book Be a Hero: Make Life an Adventure is now available on and

Read by Alan himself, Be a Hero is a collection of stories on how to make your life an adventure by changing your mindset and tackling adversity.

Go to or to download your copy. Be a Hero is also available in Kindle and paperback through

Read ‘Be A Hero’ today


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Are You Suited to Entrepreneurship

What Real Entrepreneurs Do When They Hear The Word ‘No’

Are you strong enough to push through early struggles?

Jason Saltzman




In this video, Entrepreneur Network partner Jason Saltzman sits down with two founders to hear their stories of perseverence and resilience.

Raul Tovar is the co-founder of WindowsWear, a fashion tech company based in New York City that archives display windows. He moved from Mexico to New York determined to make something of himself and resolved that he would not go home empty-handed.

Jordan Wan is the founder and CEO of CloserIQ, which builds sales teams for startups. He started his business through tragedy – losing his mother and his marriage in the early stages.

You might think these difficulties – whether moving, or being told their ideas weren’t good enough, or working through tragedy – would be enough to make them give up. But they didn’t. They only spurred them to greater success.

Related: How To Start A Business With (Almost) No Money

Click play to learn more.

This article was originally posted here on

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