A lot of people ask me what the defining trait of a great entrepreneur is. When I look at all my founder friends that have been very successful I see one thing in common: Irrational Confidence.
I didn't come up with this term. I first heard it used by a sportswriter named Bill Simmons. He used the term to refer to basketball players that weren’t great shooters or were having a bad shooting night but weren't afraid to take the game-winning shot in the last seconds of a close game. In fact, not only were they not afraid of taking the shot, they often demanded to be passed the ball so they could take the shot!
A person with irrational confidence is someone who believes strongly in themselves and their abilities based on “nothing”. For example, at Rotten Tomatoes we didn't know anything about the movie industry when we created the site. I don't think the founders of Airbnb knew anything about the hotel industry either. Or the founders of Uber with the taxi industry. We just jumped right in and started doing it; and in all these cases we had the advantage of thinking outside the box because we never were in the box to begin with. In my opinion, it's one of the most straightforward ways to disrupt an industry.
Irrational confidence is the most important trait for an entrepreneur because 99% of the time everyone will be telling you “no”. You're going to get it from friends and family, from investors, from folks you try to hire, from your users, and from potential clients. A bad entrepreneur takes the “no” to heart and gives up. A good entrepreneur listens to the “no” but continues to push forward. A great entrepreneur turns the “no” into a “yes”.
In every case that I've seen, entrepreneurs with irrational confidence have a personality so strong that they can convince people to quit their jobs to join them, investors to give them money, users to use their product, and clients to pay for it. The best example of this is Steve Jobs. His irrational confidence was so high it was said that he had a “Reality Distortion Field”. When the field was on, Steve could convince you of almost anything.
Frequently, I’ll have recent college graduates come to me for advice. More often than not, these would-be founders tell me that they want to get a job first so they can experience before doing their own startup. The ones that say that do not have irrational confidence. Instead, they are telling me that they are too conservative to do a startup. Once these folks get a job it's extremely unlikely that they will ever leave; it's very difficult to go from a stable job with a regular salary to suddenly working crazy hours for no pay. For the majority of these folks, the idea of starting their own company is a dream that they will never seriously pursue.
On the other extreme, many of the best founders I've seen believe in themselves so strongly that they don't even finish school. They have an idea or passion that's so great they leave school early and convince their friends to the same.
That being said, it is not a requirement to leave school early to be a successful founder and there have definitely been great entrepreneurs that have left their jobs to go on to build fantastic companies. However, it's really hard to be a great founder without irrational confidence. After all, if you don't believe in yourself, how will you convince others to believe in you?