The Entrepreneur's Most Important Asset

What is the key to entrepreneurial and small business success:

• Plenty of capital?
• A comprehensive business plan?
• A solid market analysis?
• Great employees?

Irrational optimism.

Entrepreneurs must embrace belief and ignore self-doubts: Feelings that we aren't smart enough, dedicated enough, adaptable enough... or simply that, in spite of our best intentions and best efforts, we cannot and will not succeed.

As BNET colleague Mark Henricks points out, the small business failure rate is not as high as it appears, but the odds are still definitely against us. Family and friends tend to shoot multiple holes in our ideas -- not because they want to bring us down, but because they worry about us and don't want to see us fail. Few people say, "Great idea -- go for it!" That's not how most people are wired; most -- myself included -- are a lot better at playing devil's advocate than cheerleader.

Are you an irrationally optimistic entrepreneur? I hope so. You need to be. Not just because the odds are stacked against entrepreneurial success, but because irrational optimism helps you succeed in ways capital, business plans, and marketing savvy cannot.

You can of course take irrational optimism too far... but then again, maybe not. Think about sports: Sports is the ultimate zero-sum game. (Fortunately business, unlike sports, isn't a zero-sum game.) Only one individual or one team can win, but all athletes enter competition thinking they will win.

If they don't believe they can win, they've already lost. (Same goes for you.)

Is total self-belief irrational? Certainly. Is it a requirement for athletic success? Absolutely. Great athletes push aside doubt and disbelief.

So do great entrepreneurs. If you listen to others you'll never start a business, never expand, never work and struggle and overcome -- and never succeed. If you don't believe in yourself, however irrationally, you will not succeed. Although no amount of self-belief is enough to ensure success, the smallest bit of doubt can ruin your chances.

In Matthew Syed's excellent book Bounce (an outstanding read on the science of success), he quotes Arsenal manager Arsene Wenger, one of the most successful football (soccer) coaches in the English Premier League, on how athletes must approach competition:

"To perform to your maximum you have to teach yourself to believe with an intensity that goes way beyond logical justification. No top performer has lacked this capacity for irrational optimism; no sportsman has played to his potential without the ability to remove doubt from his mind."

Belief in yourself will take you to places business plans and market analyses never will.

Related:

• The Top 5 Myths About Why Entrepreneurs Fail
• Everything You're Told About Setting Goals is Wrong
• Startup Advice You May Not Want -- But Absolutely Need