What Makes a Successful Entrepreneur?

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Hal Weitzman: What makes successful entrepreneurs different from the rest of us? Are they more risk seeking? Do they have better ideas, or are they just lucky? How do you know if it’s the right time take the leap into starting a business? And what does it really take to launch your own venture? Welcome to The Big Question, the monthly video series from Chicago Booth Review. I’m Hal Weitzman, and with me to discuss the issue is an expert panel.

Lindsey Lyman is a clinical assistant professor of entrepreneurship at Chicago Booth. She’s the founder of Growth Studios, an innovation consultancy, and she formerly worked in McKinsey’s global innovation practice. Sean Bisceglia is an operating partner at Sterling Partners, the private-equity firm, focused on their Education Opportunity Fund. He is a serial entrepreneur, and has been founder and CEO of four different companies in the marketing, recruitment, and staffing industries. And Liz Tilatti is cofounder and CEO of ZipFit Denim, an online designer-denim retailer that came out of Chicago Booth’s New Venture Challenge entrepreneurship competition.

Panel, welcome to The Big Question. Lindsey Lyman, let me start with you. Could we say that there’s an entrepreneurial type? What are the characteristics of a great entrepreneur?

Lindsey Lyman: Characteristics of a great entrepreneur . . . It’s an interesting question, because while I do see characteristics, at least in my students that go on to become great entrepreneurs, part of it is those intrinsics, and part is the behaviors and the way that they approach building their ventures, that is different.

Hal Weitzman: OK, so talk a little bit about the former, what are the kind of things that are there, the intrinsic qualities that a person needs to be successful, in your opinion?

Lindsey Lyman: I think one thing is, the way entrepreneurs see the world differently is through their ability to really shape and control outcomes as opposed to predicting outcomes, and trying to change the way they operate to fit into that.

Hal Weitzman: OK. So that would be more of manager type who sort of makes predictions, and the world exists as it does. And the entrepreneur type is the person who wants to change the world.

Lindsey Lyman: They don’t seek certainty for anything. They just have confidence. Enough confidence to get out there and start acting, knowing that they can influence everything along the way.

Hal Weitzman: OK, alright. Sean, does that sound . . . You’ve spent your career in entrepreneurship, does that sound about right?

Sean Bisceglia: I . . . yeah. Just to build on Lindsey’s, I guess, certainly, I think, they have to be optimistic, right? They have to be crazy hardworking, or have that grit. I’ve seen a lot of that.

Hal Weitzman: When you say optimistic, just to go back to that, you mean optimistic about their particular idea, not necessarily about the world in general?

Sean Bisceglia: I wouldn’t put it on a macro level of the world. I think they have to be super optimistic inside and super confident. They have to really have that hard work, that really hard-work ethic. Because as they will find out, it takes a lot of work to be a successful entrepreneur.

Hal Weitzman: OK. Liz, what about your experience, has it been . . . does it sound?

Liz Tilatti: I think you have to be a little crazy, first of all, if you’re gonna be an entrepreneur. The odds are not in your favor. So your likelihood of failure is very high. What is it, 98 percent or higher? I think you have to be able to tolerate risk and failure. So you have to know that your chance of failure is incredibly high, but still believe you will make it and succeed. So maybe you’re a little, at the early stage, a little irrational, but you believe wholeheartedly that you will succeed.

Hal Weitzman: OK, so confidence, or some irrational exuberance, some kind of hard work. What are the other, what else, what are we missing, Lindsey Lyman?

Lindsey Lyman: You really have to believe that you’re going to change the world, and that the world needs what you have that you’re building. Because of all the risk, because of the odds, because of the hard work, in order to overcome all of those challenges, you really have to believe that the world needs what it is that you’re building.

Hal Weitzman: OK, now how would someone know, if they listen to what everybody said, and they said, that sounds like me. How would you know if it really is you? I mean, how could you test it out? Can you pitch, you know, your friends and family, or what’s the best way to start out?

Lindsey Lyman: How did you two decide, this is the right time to start?

Sean Bisceglia: To build on the characteristics: you know, one thing we’ve seen as a factor, believe it or not—I’m not sure if everybody buys into this—is Gladwell’s Tipping Point. So if you look at that, the characteristics, a lot of entrepreneurs had a life event. It might have been divorce, or death, or moving, something really traumatic.

Hal Weitzman: Unemployment.

Sean Bisceglia: Unemployment, where it gave them that resiliency to really try to succeed. So we, or maybe myself am super resilient, right—I’m not sure if you buy into that type of data, and that type of research that has been done, but there’s always like a certain life event that’s happened in their childhood, or even as an adult, that really allowed them to be super resilient.

Hal Weitzman: And they do say that, sort of, losing your job, for example, forces you to make a big decision, which might be to start a new venture.

Sean Bisceglia: Or moving as a child. You know, if you sat in one town for 10 years, or you had to drop out of school, or you know, something happened along in life, we’ve seen those be pretty much consistent with super great entrepreneurs.

Hal Weitzman: Liz, what advice would you give someone who thinks they might be the right kind of person to be an entrepreneur, to be successful, but isn’t quite sure? What advice would you give, and how would they test that out?

Liz Tilatti: I think they have to find the simplest possible way to test their product or idea without $100,000 of investment capital. Literally, how can you build the first version of your product to see if it works? My version of ZipFit was I took my computer and a measuring tape along Michigan Ave., and measured jeans for three weeks. And then I took 100 guys out shopping, and said, “This will fit you, and this won’t fit you.” So it was the simplest possible way I could do it, because I had sat in classes at Chicago Booth and literally could not sleep afterward. I was so excited about what it could be, and what ZipFit, the future of ZipFit would be.

Hal Weitzman: How do you get over the problem, Lindsey Lyman, you know, someone wants to build something? In your case, you had this very tangible thing you could do, Liz. But someone wants to build something that just isn’t there. They want to change the world, in the way you described. And they start telling their friends and family about it, and the friends probably think it’s wonderful. They might even put money in. But this doesn’t necessarily mean that it’s gonna be viable, does it?

Lindsey Lyman: More oftentimes, they have the opposite problem of everybody telling them it will fail. And, in fact, at this school, we are trained to find all of the reasons that things will fail, and less so much on what will work. But what I tell entrepreneurs is really, really tease out the top risks or unknowns. What are the most critical assumptions on which your business hinges? And go out and test those things. You don’t have to build the whole spaceship. Build the component of it that’s the most risky to start to learn and iterate as a starting point.

Hal Weitzman: OK. Sean, you’ve been through these multiple entrepreneurial journeys in your career. What do you advise people about when is the right time? It probably . . . to some people it probably never seems like the right time, and to others, it probably always seems like the right time. Can you give us some guidance?

Sean Bisceglia: Yeah, I don’t know when there is a right time. I was 15 when I had my first company. I was in high school. I ran a little food business. And then from there, I just continued building and selling companies and being an entrepreneur.

So I can’t say it’s an age, and I can’t say it has anything to do with an internal satisfaction. I think a lot of people want to be an entrepreneur because they’re not internally satisfied with their current job, or they just might be in the wrong career path. It doesn’t mean that they should be an entrepreneur.

I think if we go back to what we’ve been talking about earlier, which is: if they have an idea—it might change the world, or they just might be super passionate about it—that might be the time to try to be an entrepreneur.

Hal Weitzman: OK, you mean regardless of kind of the macroeconomic conditions, or the stage of life the person is at?

Sean Bisceglia: Yeah, I mean, I don’t know if . . . you can be 16 or 66, right? I mean, there’s a lot of case histories around, you know, of fabulously successful entrepreneurs. I don’t think there’s an age, you know, bottom or top, but I think it has to do with that internal passion. I also think that, you go back to some of the characteristics, it’s almost an internal calling to be an entrepreneur, right? Because we may talk about this later, about is it a learned or not? I think just that inside passion is super helpful.

Lindsey Lyman: Going back to timing. It was interesting that you raised that. If you look at success rates of companies, and there’s a lot of data that tracks, you know, how many companies, new ventures are in business two, four, seven years, etc. That curve looks very similar whether companies were launched during a recessionary time or a boom economy. But what does change is your ability to get capital to start the business. And so sometimes that’s a consideration, in terms of when’s the right time to launch, when can you get capital? But success rates look very similar, regardless.

Hal Weitzman: OK, and that has something to do with the people then, or how do you account for that?

Lindsey Lyman: That’s just, you know, when is the right time to launch a business? It’s a combination of passion, life stage, everybody has different life circumstances, when do I have the right idea that I’m passionate about? But oftentimes, practical considerations come into it. You know, can I actually fund the venture?

Hal Weitzman: Right.

Lindsey Lyman: Is this the right time to do that?

Hal Weitzman: Right. But Sean mentioned, for example, you know, people, if they’re dissatisfied with their job or even lose their job, they’re more likely, perhaps, to take the leap. Is that then a bad sign, then? Should you not . . . should you do it when you’re actually happy and perfectly comfortable because then you know it’s really the right thing to do?

Lindsey Lyman: You know, I think that’s a personal question. But it is interesting. You raised kind of the point of necessity-driven entrepreneurship versus opportunity-driven entrepreneurship. And if you look globally, the US actually has one of the lower entrepreneurial rates of countries across the world. You see a lot more entrepreneurship in emerging economies for that reason, right?

Hal Weitzman: Right, people just creating their own jobs.

Lindsey Lyman: I don’t have any other options. And so, entrepreneurship here is, in the US at least, is a lot more opportunity-driven, but the necessity-driven entrepreneurship does come into play, in a lot of those life events.

Hal Weitzman: I suppose the flip side of that is that everybody in the United States who starts a venture believes that eventually they’ll be fabulously successful. Whereas, most of the people you’re talking about, it’s almost like a subsistence business, right?

Lindsey Lyman: Yeah.

Hal Weitzman: Around the world. Liz, you started your company when you were an MBA student. That was presumably a good time to do it. I mean, what would you advise someone who’s been through, you know, their career, and comes later on and has an idea, but isn’t sure if it’s the right time to start a new career? What would you advise people?

Liz Tilatti: Probably the thing that most people don’t want to talk about, but should, is to make sure they’re financially OK going into it. Because there is a long period of time where you have no salary. And it’s always longer than you plan on it being, especially if it’s your first venture, because very few people will back you. So I always say, make sure you’re comfortable, even more comfortable than you should be, going into it, because if the world was full of entrepreneurs, and that’s all there was, it would fall apart.

So I’m always big that we need to balance out both sides, of entrepreneurs, those who want to work with an early-stage company, and then those who are in corporate America. So I think we need all of them, and there’s nothing wrong if entrepreneurship is not the right path for you, absolutely nothing wrong. ZipFit would not be where it is today if everyone was a pure entrepreneur. So I’m very thankful to have the different phases of people, sort of going through that lifecycle.

Hal Weitzman: OK, for someone who’s preparing to take this leap and start their own venture, you know, they’re doing a lot of research, collecting a lot of data, maybe doing market studies, creating a minimal, viable product, whatever. How do you know when you’ve done enough research and then you just need to get on with it? Because some people might have the tendency to do more and more research, or conversely, not to do enough. Sean, what are your thoughts on that?

Sean Bisceglia: I like her going down Michigan Avenue, and that kind of research. I think people can get in paralysis with research, and then it stunts kind of the emotional side of being an entrepreneur, or that passion of going out and launching a product, and doing an MVP, and trying to figure out how to get it to market.

Hal Weitzman: That’s the minimum viable product that we talked about.

Sean Bisceglia: Yeah, the minimum viable product. You know, I’m not a big research junkie, right? And I think that you have to have, you know, beyond friends and family, you have to talk about the product, and research, and primarily, the competition. But every time you peel back the competition, or pricing, or availability, or distribution, or whatever, however your product is gonna be sold, and it’s reconfirming your ideals of that product, and reconfirming your passion, just go for it. Just go for it, I mean.

And I think you’re right. I was 26 when I started my first company, and bought it out of a UCC filing and I borrowed $7,000 from my parents to do it. And I didn’t have the sense to sit back and say, well, financially, am I OK? You know, times have changed, certainly, but I think the financial considerations should weigh on an entrepreneur, but it shouldn’t be the only, you know, the only factor. Because that will, because that’s risk, right? So if they’re not willing to risk, they may not be a good entrepreneur.

Hal Weitzman: OK, you said that you are not big on research. I mean, how do you select companies to invest in then? What are you looking for there? Is it about the team? Is it about, you know, just the idea sounds amazing, regardless of whether they’ve got enough data to back it up?

Sean Bisceglia: Wow. So we first look at the category, right? We look at if the competition’s set. We look at the team. We look at the product, and you know, we understand that. We also, really, just talk to a lot of customers, frankly. Is there something that this company is solving, or inherently, there’s like just a pure latency to the product, that’s gonna allow them for—

Hal Weitzman: Explain what you mean by that, “pure latency.”

Sean Bisceglia: Well, I just mean that, it’s an annuity. It’s gonna stay in that company for a long time. It’s very critical, very core to their operations, especially in HR or technology. Or, you know—

Hal Weitzman: So other rivals can’t easily be established and undercut—

Sean Bisceglia: Right, or there’s a ton a competition. If there’s a ton of competition, we kind of stay away from it too, because that means nobody can scale. So we look at the ability to scale, and certainly the team.

Hal Weitzman: OK.

Lindsey Lyman: Yeah, I think back to your question: if you’re caught in the data-analysis paralysis, that might be a sign that entrepreneurship isn’t for you. And the reason I say that is: there’s kind of a big difference between how entrepreneurs approach market research, to your point, and how corporate managers would do it. Entrepreneurs wanna know that there’s a customer need and that there’s a good fit. There’s a need for what they’re solving, and that their solution solves that need. The nature of the market research revolves around that. It’s talking to people. It’s trying stuff out. If you can’t get past that to say, yep, I think I’ve got something here, all of the data in the world will never give you the certainty that you’re gonna succeed. So you do just have to go out there and just start. But if you feel uncomfortable doing that, then that’s kind of a sign that—

Sean Bisceglia: Yeah.

Lindsey Lyman: That you shouldn’t do it.

Sean Bisceglia: Yeah, I agree, that’s a really good point.

Hal Weitzman: OK, Liz, any thoughts on how much research? So your research was very hands-on, as it were. Any thoughts? What do you advise other people?

Liz Tilatti: Yeah. My actual market research was: the premium-denim market is 4 billion dollars. That’s big, great! Now let’s get some customers to actually try it out. So for me, and I’m an introvert, so it’s not intuitive for me to always, you know, go and talk with everyone. But this was something I was incredibly passionate about, so for me it was easy to do. So it was easy for me to strike up a conversation with somebody and say, “Hey, is it hard for you to find jeans that fit?” “Yes, it is.” “Great, can I go out shopping with you to help you find some that actually work?” “And then can you refer a friend?” All the way through.

So that’s how I built up the first testing customers that helped validate the market. So for me, it’s always hands-on, and it’s always, you know, it should always be, like, what’s gonna get you to that first sale? Because you could have piles of research and if you have zero sales, you’re not gonna go anywhere.

Hal Weitzman: OK. Lindsey Lyman, one of the things that presumably holds people back is risk. They just don’t like the, you know, the idea of not having the income, or you know, running something and failing. How do you help people think about risk, or do entrepreneurs think about risk in a different way?

Lindsey Lyman: It would be interesting to get your opinions on it. I think, you know, if you ask an, at least most entrepreneurs that I’m close with, they don’t see themselves as risk takers and risk seeking. They see themselves as really good risk managers. I know what the risks are, and I’m confident that I can navigate around them rather than being paralyzed by them. And so, that’s kind of the mindset of: I know risk’s out there, I know things are not gonna go the way I plan, and I’m gonna embrace that and work around it rather than finding 100 reasons to convince myself not to launch this venture.

Hal Weitzman: But how do you balance it with what you said before, which is, finding all the things that are wrong about your idea, you know, making sure, really road testing it, making sure it’s really robust. But at the same time, sort of not listening to them too much, and having confidence in your idea, and managing those risks. How do you balance those two things?

Lindsey Lyman: It’s all about the confidence. Be aware of what the risks are, but have the confidence that you can overcome them.

Hal Weitzman: I see.

Lindsey Lyman: I think a lot of people overestimate risk to some degree. You can never know everything that’s gonna happen. Having a mindset of: things are going to happen, and I’m gonna embrace that and use that as an opportunity to either make my business stronger, or change it, pivot, etc.

Sean Bisceglia: Yeah, just to build on Lindsey. I don’t think when you’re in that early entrepreneurial stage that they’re even considering risk. I think they’re intoxicated with the idea. They’re passionate about the idea.

Hal Weitzman: Is that a time when they should consider risk though?

Sean Bisceglia: No, I think just let it roll because then, later, after revenue comes in, and you build a sizable business or you start hiring people and you have costs and expenses, then they start thinking about risks. They internalize it. They think about risk, about not being successful, about not selling enough, about not making payroll. And so, they start internalizing those risks very rapidly, at monumental amounts of time every day. I think in the beginning, they’re not thinking about risk. They rationalize it because they’re intoxicated with the idea, and then they just go. And then I think, they start internalizing the risk later, you know, after they start getting revenue, and hiring people, and having budgets.

Hal Weitzman: OK, but then it’s productive to think about risk at that stage?

Sean Bisceglia: I’m gonna turn it over to you.

Liz Tilatti: I mean, I think as we’ve seen--

Hal Weitzman: Is that what happened with you, Liz. I mean, did you sort of start out not thinking about risk at all, and then slowly it became . . . you had people who were depending on you, and customers, and all the rest of it?

Liz Tilatti: Yeah, so, it was a very safe place, to start at Booth, right? Everybody talks about entrepreneurship. You can take a class every day if you want. So for me, it was a good place to test it out. My goal coming out was that I could financially support myself, and I would be OK. And I was OK. Life was challenging at moments.

But then, I do totally agree that the risk changes. It’s very different when you are just supporting yourself, or your cofounders, and then you move to support a team. You move to fundraising. You move to scale. There are different risks along the way that you have to be able to have better market research on, have better, you know, strategies and growth and different channels that will make a difference, know your metrics inside and out. So things do change.

But I think that it’s just keeping that mindset that you’re OK with the change. And also recognizing the fact that you may be an early-stage entrepreneur and not a late-stage entrepreneur. Very few people do the complete journey. We’re still pretty early stage at ZipFit right now.

Hal Weitzman: So explain that distinction. The early stage would require what, more passion and drive and . . .

Liz Tilatti: Mm-hmm, it’s more passion, drive. You’re a little bit more irrational, you know, you’ll plow through a brick wall. You’re gonna be the No. 1 salesperson. No one should be able to sell better than you because you’re so passionate about it. You don’t have that fear of failure. And then, I think, as you start to hire and bring on new people, and you start to scale, you know, when you have 100 people at your company, you’re no longer the one doing the sales. You’re no longer the one doing pieces of operations. You’ve brought in people who should be better than you at that. But your job is to motivate them. So things have changed. So I think that there are entrepreneurs who can take that journey, but not all.

Sean Bisceglia: Can I build on that?

Hal Weitzman: Sure.

Sean Bisceglia: I think we could have a whole other hour about early and later, and I think that’s a great point. And I look at this, as I have been, as a founder. So you’re a founder of a company. You’re an entrepreneur. And it’s the brilliant entrepreneurs who know when to get out, like, when it gets to a certain size, and they say, whether or not inside passionately, they want to go do something else. I’ve done it three times, where there’s like a certain number of employees or revenue that it gets bureaucratic, or it gets tedious to my own emotional intellect. So I know to kind of step out and do the next thing, right? And that’s a fabulous point, which could be a whole other conversation, about early- and later-stage entrepreneurialism.

Lindsey Lyman: [Yeshiva University’s] Noah Wasserman did research on this topic. And entrepreneurs that know when to step out and let go of control of a CEO position or board seat make substantially more money on exit of those ventures than ones who tried the “it’s the rich versus king” mentality. So, know yourself and know when to step out.

The other thing I’ll say on risk is: entrepreneurs manage risk through, kind of, the affordable-loss principle. I’m gonna give myself X dollars, to reach X milestone, and if it’s not looking like I have any line of sight to hit that, or I’ve not hit that, then I know when to stop. Versus: I have five different investment opportunities, and I’m gonna analyze each of them, and figure out which one has highest ROI, and least risk, and invest in that. That’s kind of the corporate mentality. Entrepreneurs say, I’m gonna give myself a budget, and a timeline, and a milestone, and kind of manage it one step at a time as a way of managing that broader risk.

Hal Weitzman: What are the big mistakes that people make in starting their own companies?

Lindsey Lyman: That’s a big . . .

Hal Weitzman: Let’s say the biggest.

Lindsey Lyman: . . . big question. The biggest mistakes . . . Uh, not understanding your customer, and your market, and the need that you’re solving. That is fundamental, early on, really being clear on what problem you’re solving for who. And making sure that you’ve developed a solution that actually solves that, that problem that people are willing to pay for. Not getting that right early on is challenging.

The second one is just not selling, right? There’s kind of an inflection point between two and three years, where you have to figure out how to sell, bottom line. And not the low-hanging fruit, friends and family sales that are kind of early-stage customers, but really figuring out how to scale sales.

Hal Weitzman: Sean, surely you’ve presumably seen a lot of other ventures fall.

Sean Bisceglia: Yeah, I think—

Hal Weitzman: What were the big mistakes?

Sean Bisceglia: Yeah, I’ve seen it and experienced it. Just to build on Lindsey, I would say, that getting those sales are important because it gives you traction, right? And without that, you know, it’s hard to have any runway to make changes, you know, with the business. The other thing is—I think we talked about it earlier—know when to quit. And that is the hardest thing for an entrepreneur, and I’ve done four. I’d say three great home runs and one single, right? You know, you’re so attached to the company and the product, but knowing when to quit. And you—

Hal Weitzman: Is the problem there that people think it’s just going to be much bigger? Or that they think they have a lot more to offer, or what is it?

Sean Bisceglia: Well, I think it’s a little bit of both. So when we were talking about sales, a lot of, you know . . . Maybe a couple of years ago, a lot people were developing apps to sit on, you know, the Apple Store, or a number of marketplaces. And “you build; they shall come.” It doesn’t work that way, right? You have to be able to sell and show revenue, which is really important. And I think, if you can’t do that, you just stay on with that belief and you don’t let go. But, you know, maybe it is a budget they set, and that is one mechanism. Or it’s a personal circumstance that you might have, where you have a set time or goal. But it’s really hard. I don’t think entrepreneurs know how to spell quit. At least I didn’t until my third company. And then you learn. You learn very quickly.

Hal Weitzman: Liz, you must have seen some of your, maybe some of your classmates, or other people, who were starting new ventures, who didn’t quite make it. What have you observed of the kind of big mistakes that people make?

Liz Tilatti: First of all, I applaud them that they did, you know, at the time when it wasn’t working, they made that choice. There’s nothing wrong, and I say, well done. Like, you gave it a shot, and that’s exactly what you should have done. I think that for those people, they may not have, you know, found a single customer. That’s probably it. You can generally find a customer before you’ve raised capital. So I’d say, like, that’s probably one piece of it. And the customer just—I’m not necessarily saying they have to be a paying customer, but they haven’t found that piece of it.

So I think a lot of it comes down to cash flow too. You’ve got a company that may have made it a little later. They didn’t get enough customers, or they spent too much money, which is cash flow, or it’s their own personal situation too, which comes down to money again. So I think that a lot of those pieces tie together, it, you know, I don’t know if every person had the same experience, but I’d say, it’s usually tied to top or bottom line.

Hal Weitzman: OK. Sean, I wanted to ask you, you’ve had a, you know, good career. What do you think has changed in entrepreneurship over the past few decades?

Sean Bisceglia: Yeah.

Hal Weitzman: And what hasn’t changed?

Sean Bisceglia: Great question. What hasn’t changed is a question we haven’t talked about yet, which is: Are you born with it or can you teach it? So I’d like to get to that at some point.

Hal Weitzman: Sure, talk about it, please.

Sean Bisceglia: Because I think that’s been an ongoing debate for 30 years.

As you think about the question, like, what’s changed? There’s a lot. I mean, the way you raise money, the way you test a product, the way you, you know, build a culture, the way you, you know, get mentorship, right? So there’s a lot, a lot of things have changed.

But, I’m of the opinion, that change, and that availability, that makes it so much more frequent, is causing maybe too much entrepreneurialism, right? Because it’s too easy, at times, to feel or think that you’re gonna become an entrepreneur, because the technology has allowed, has opened up to crowd raising, to all kinds of things that never existed, I guess, 30 years ago when I did my first company, right? That has changed a lot, but also, there’s also an effect of that, where we might be seeing too many entrepreneurs because it’s so much easier with the technology.

Hal Weitzman: OK, so I know you wanted to talk about what hasn’t changed, and that—

Sean Bisceglia: Oh geez! Well, I guess, I guess, what hasn’t changed is: really where we started the conversation, which is the characteristics of an entrepreneur, of being, having a really high-risk threshold. Of kind of having that passion, or having that just, you know, complete all-in about a product or a service. And also, really, you know, I keep on using the word intoxicated. Maybe that’s the wrong word, but certainly being very passionate about your product. That hasn’t changed for hundreds of years, right? From whether or not . . . from the first entrepreneur, then to now.

I think what has changed, though, is a bit of— I’m not trying to be super negative, but you know— false expectations, right? Because now, you know, you can take an entrepreneur class anywhere. Most colleges and universities—we spend a lot of time in higher ed, and we see a lot of colleges and universities offer, for undergrads, a lot of entrepreneurial courses. Then you have the technology. So it makes it super easy, which makes you feel super invincible, and it makes you feel like: I can, I can be an entrepreneur.

Hal Weitzman: And you can build an application very quickly—

Sean Bisceglia: And people will come, right?

Hal Weitzman: Or they won’t come.

Liz Tilatti: Or they won’t come.

Hal Weitzman: That’s what it’s usually.

Liz Tilatti: Realistically, they won’t come.

Hal Weitzman: Yeah, OK, Lindsey Lyman, so you’re in the educating-entrepreneurs business. So, how do you think about that? That, you know, it’s easier, in a way, to build particularly a technology-type, you know, company? How do people know if it’s gonna work?

Lindsey Lyman: I would say . . . Well, it’s easier to build a product, but it’s not necessarily easier to build the company. People have a false sense of, if I build something, then I can be an entrepreneur. Well, an entrepreneur’s building the company surrounding the product. Building the company hasn’t gotten easier. Maybe building the app has gotten a little bit easier.

But in terms of, you know, teachable traits versus born-with-it characteristics, there are certain characteristics that you are born with. We’ve talked about a lot of them. That drive, that, you know, motivation, the tolerance for risk, the just relentless resilience and being able to push through. Those are things you can’t really teach, just like you can’t teach somebody how to be tall if they want to be a basketball player.

But there are a whole set of things around process, things you really need to know how to do and think about as you’re building the company. How do you raise money? How do you build, how do you build a human talent management organization? How do you hire people? What do you need to think about when you’re bringing people into your company? Topics like that are useful topics to entrepreneurs, to at least know what’s coming in the context of building the company. Those are things you can teach that are helpful as skills and tool kits to layer on to those intrinsics to make an entrepreneur more successful.

Hal Weitzman: OK. Liz, I’m gonna give you the last word. Obviously, you have those innate characteristics, but you also got the education in entrepreneurship. So how do you think the one reinforced the other?

Liz Tilatti: I grew up in a family of entrepreneurs. My father is an entrepreneur. We had solar panels on our house in the 1980s. For me—and they worked a little, and then they didn’t work the rest of the time. So I grew up being exposed to, you know: failure’s OK. He tried it out. It worked for a bit. It didn’t continue. That’s OK. My aunts were all entrepreneurs as well, and immigrants too. So I had an aunt in Egypt with a wedding-dress rental business, well before Rent the Runway. So for me, it was the exposure to it, that it’s OK. But that didn’t mean I’d become an entrepreneur. So my sister is an attorney. My brother is a doctor. They chose nonentrepreneurial paths right now. And I think we actually have a good balance.

For me, when I came to Booth, though, that’s when my eyes opened, and I finally said, this is what I want, and this is what I love and what I’m passionate about. Now let’s get the right problem in the market too. So it was bringing it all together to have one cohesive story that was a combo of my background, from what I’d been exposed to, but what I actually cared and loved too.

Hal Weitzman: And it sounds like you had that resilience as well that we talked about earlier. Well, this has been a fascinating conversation, but unfortunately, our time is up.

My thanks to our panel, Lindsey Lyman, Sean Bisceglia, and Liz Tilatti. For more research, analysis, and commentary, visit us online at review.chicagobooth.edu. And join us again next time, for another The Big Question. Goodbye.

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