Starting a new business is a slog, no matter what. The only founders who do it successfully share one trait in common: the resilience to navigate a rocky path filled with unforeseen twists and turns.
That's a key lesson that Catalina Daniels and James Sherman took from researching for their new book, "Smart Startups: What Every Entrepreneur Needs to Know — Advice from 18 Harvard Business School Founders." Daniels and Sherman, two Harvard alums who founded their own businesses and now work as venture investors, interviewed 18 HBS graduates who went on to launch notable startups, such as Blue Apron, Gilt Groupe and Rent the Runway.
"Having resilience is absolutely essential [for] the emotional makeup of a person in terms of becoming an entrepreneur," Sherman tells CNBC Make It. "If they don't have that type of resilience, they need to learn how to build it up."
In fact, every founder the authors spoke to agreed that resilience was the biggest key to their success, even more than prior experience or a winning business idea.
It was resilience that helped Josh Hix, co-founder of meal kit startup Plated and one of the book's subjects, keep plugging away throughout that business' difficult first year. He and co-founder Nick Taranto were struggling to get the company off the ground and even came close to declaring bankruptcy.
Eventually, Plated landed an investment from Kevin O'Leary after appearing on a 2014 episode of "Shark Tank." Three years later, the business sold to grocery chain Albertson's for up to $300 million.
"We define resilience as a combination of grit and motivation," Sherman adds. "And that's what you need to keep yourself powering forward, despite all of the obstacles."
Another founder the authors interviewed — Anna Auerbach, co-founder of Werk, which began in 2016 as an online job marketplace before pivoting to an enterprise SaaS platform — compared the resilience required to be an entrepreneur to being a parent.
"You have incredibly hard days as a parent, but you don't stop being a parent … you don't just give up," Auerbach told Daniels and Sherman in the book.
"So much of the success of a business is going to be tied to things that you can't control," Sherman says, adding that the same is often true for parents.
However, just as parents need to be resilient and adaptive as a result, the most successful entrepreneurs are also able to accept, and try to anticipate, what Daniels and Sherman call the "uncontrollables" in life and business.
"Successful entrepreneurs … accepted the fact that this is part and parcel of the entrepreneurial roller coaster, and they're going to be things that they cannot expect, things that they can try to anticipate as best they can, but they're still going to be things that will affect them that are uncontrollables," Sherman says. "And the best they can do is ground themselves and then try to navigate to their own advantage as best they can."
Psychologists agree that developing resilience is key to overall success, in life and your career, because it's what allows us to recover from inevitable setbacks, learn from our failures, and continue to take necessary risks.
After all, it's fairly common knowledge that roughly 20% of all new businesses fail within their first year. To launch a new business knowing the high risk of failure, founders need to have the wherewithal to weather hiccups without crumbling and still have the confidence to push ahead, or even pivot directions, especially if doing so requires additional risk.
Fortunately, there are ways to build up your resilience, including by actively acknowledging the fact that there will be setbacks and other things you can't control, and there is no straight line to success. Practicing that sort of acceptance, while also reframing failures as learning opportunities and maintaining an optimistic outlook, are some of the ways you can develop more resilience, according to the American Psychological Association.
It also helps to be proactive in looking out for potential obstacles, according to Daniels.
"The most important thing is to anticipate, to basically have your antennas out," she says.
For instance, Hix told the authors that he and his co-founder frequently asked themselves, "'Are we crazy? Can we actually make it work?'" when fine-tuning Plated in the early days. They actively worked to consider the many hurdles they would face — particularly the logistical difficulties of shipping fresh food — so they could anticipate as many potential setbacks as possible. Even a great idea will fail when executed poorly, Daniels and Sherman note.
"If you start losing [money], if you're not growing as fast, if you really can't become profitable, those are signs that you need to change something and that you need to pivot part of your business model or your entire strategy," Daniels says.
That's a common inflection point for all businesses, the authors note in their book, writing that "most successful companies have pivoted their businesses" at some point or another, whether it's Werk transforming into an enterprise software platform or Rent the Runway launching a subscription service in an attempt to bolster its original business model.
Undergoing a potentially major change to your business is never easy, which is why resilience is key for founders to have the confidence to do what may be necessary to stay afloat or reach the next level of growth for their business, the authors say.
"Pivots are part and parcel of the entrepreneur's journey," Sherman says. "An entrepreneur just has to be nimble, has to be flexible, has to be grounded and accept things and have the attitude that will allow them to ultimately be successful."
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