Cultivate an ‘ambidextrous’ mind for entrepreneurial success
Entrepreneurs who have the greatest success in raising money for their startup have a key personality trait in common: they have an ‘ambidextrous’ mindset, our recent research shows.
Most of us are either right- or left-handed, but someone who is ambidextrous can use either hand equally well. An ambidextrous mindset is the ability to think and behave in opposite ways equally well depending on the situation.
We might traditionally associate successful entrepreneurs with personality traits such as being creative, disruptive, agile and innovative, but the ability to behave in the opposite way, to be efficient, precise and process-oriented when needed, is also necessary to grow a venture.
Startups play an important role in growing Australia’s economy, but to do this they need to raise funds from angel investors, venture capitalists or through crowdfunding platforms. Knowing the traits funders are looking for will help entrepreneurs tailor their pitch.
To test this link between a startup founder’s ambidextrous mindset and their fundraising success, our research examined the online language of 90 startup founders.
We analysed discussions in an online forum, where founders discussed their entrepreneurial ideas, and we determined their fundraising success from information available on the Crunchbase website (a crowdsourcing platform that offers data on startup funding).
Entrepreneurs who were most successful in raising funds over time used words that convey innovation — such as invent, innovate and novel — and words that convey efficiency — such as improve, increment, efficient and systematic — at a similar frequency.
A balanced use of both these contradictory concepts, rather than a singular focus on either one, suggests an ambidextrous mindset, and was associated with the largest amount of funds acquired by startups over time.
Although many entrepreneurs like to emphasise the disruptive and original elements of their business, a dominant use of innovation-related words did not improve funding performance.
Founders need to embrace a balanced use of efficiency and innovation related concepts to reassure stakeholders they are able to use divergent strategies in problem-solving.
Entrepreneurs would be wise to develop their ambidextrous thinking skills, which could help them face the numerous challenges associated with new venture development, such as navigating market uncertainties and evolving customer needs, technologies and competitive forces.
Our research also showed that entrepreneurs who clearly communicate their human, social and intellectual resources, including prior managerial, industry and startup-creation experiences, were more likely to get funding.
Other techniques shown to increase funding success include the use of positive words that demonstrate hope, optimism, resilience and confidence, and a concrete language style, including more articles, quantifiers and prepositions.
Over and above the business proposition, angel investors and venture capitalists use a range of language cues from pitches and business plans to determine the competence and personality characteristics of the startup founder and the likelihood of a venture’s success.
So minding your P’s and Q’s, and emphasising your attention to detail, as well as your ability to think big, may well just give you the edge in your next venture.
This opinion piece was first published in Smart Company.