The 5 Signs That You Are Likely An Overly Confident Entrepreneur

The 5 Signs That You Are Likely An Overly Confident Entrepreneur

The line between healthy self-esteem and deadly overconfidence is razor thin.

The 5 Signs That You Are Likely An Overly Confident Entrepreneur
Photo by Tima Miroshnichenko

Adam Neumann, Elizabeth Holmes, and Arif Naqvi were billionaires with gargantuan egos that helped them reach their wealth and fame.

Their stories landed on the top bestseller lists because we love people with grit, persistence, and unbending self-esteem. However, these stories also warn us that pathological overconfidence can ruin our life’s work and put us behind bars.

Holmes and others aren’t some extraordinary exceptions in the world of startups. Economist Robert Singh claims many entrepreneurs like you and me suffer from overconfidence. Another study from the University of Bath suggests that unabashed confidence will indeed harm your startup.

As a top-management consultant and tech founder, I basked in the bitter-sweet taste of ego, eventually learning how blind it can leave me as an entrepreneur.

The line between healthy self-esteem and overconfidence is razor thin. Here are the 5 signs you might’ve crossed over to the dark side.

Once an overconfidence demon possesses our soul, we stop asking for help. Why ask for help if we’re good enough to do it all?

Yet, all things need a healthy balance.

I often lock myself up in my office, working on a project alone for several hours. Does it make me an overconfident prick? Sometimes. But more often, I am just an introvert who needs his space to dig into a problem by himself.

In contrast, I had an employee who was barging into my office several times a day asking how to respond to a client, solve a problem, or refill a coffee machine. “Dude, do it yourself!”

People with well-balanced confidence ask for help every once in a while — not too much, nor too little. Just enough to get work done without trying to prove to anyone they are superior to the majority of the population.

No person can be the best in every part of life.

If you behave like you are, consider it a red flag. We can’t be perfect at everything because we all have our strengths and weaknesses.

Even after ten years in the game, I still overestimate my ability to accomplish all my goals on time. I guess it’s the nature of every entrepreneur.

But this doesn’t mean a bad thing.

We believe in ourselves accomplishing the toughest projects in the shortest possible time. It keeps our adrenaline pumping every morning.

Yet, once things don’t go according to our plan (and they often don’t), we learn to bend the truth. We tell our investors, customers, and employees a convincing story for our delays. We give them something to chew on before we deliver a solution.

Elizabeth Holmes embodied her excuses as deceptive art. She disguised issues with her blood testing device to unprecedented levels. With her charming baritone and mesmerizing blue eyes, she convinced even the most sophisticated investors and customers. And it worked! For a while. Until they convicted her of fraud.

So the more excuses you hand out, the more likely you are over-bending your confidence.

The billionaire Ray Dalio preaches a no-excuses culture with complete transparency and openness. He writes that the best way to conduct business is to remain blunt and open even when things go south. No need to pack the truth in a glossy paper with a ribbon.

You’re right: It’s easy for someone like Ray Dalio to be completely open. He’ll never have to sweat it in front of a crowd of VCs, anxiously reporting his product delays and missed sales targets.

But Ray Dalio has a point: Do not overstretch yourself with your excuses.

After each excuse, I learned to ask myself: “Am I overestimating my abilities?” If the answer is yes, I realize I’m being overly confident and should revise my plan.

Talking down about your competition isn’t smart.

Your competitor isn’t much different from you. They bust their asses to get their market share, develop great products, and post amazing videos to beat everyone on social media.

One of my business partners laughed at our competitor for selling a product inferior to ours. But while he badmouthed them, the company was quietly gaining its market share. They built an incredibly powerful distribution network, an effective sales team, and strong marketing machinery. Yes, they may have had a weaker product, but they were more successful as a business.

Competitors are often smarter than you think in particular parts of business or tech. It’s not wise to belittle them, call them stupid, or pretend that you are more brilliant.

If you ask me, if a company sells more than me — I’ll go out of my skin to learn how they do it instead of wasting my time and energy divulging into finding explanations why they are the bad guys.

The one thing self-aggrandizing founders have in common is an absolute lack of listening skills.

And by listening, I mean the ability to process the information you hear and make rational, unbiased conclusions. A wise founder who hears: “You are wrong” from his employee will swallow his ego and appreciate the feedback. An overconfident founder will ignore the remark or (worse) fire the employee.

Narcissistic founders ignore criticism because they hide in their ego bubbles.

Elizabeth Holmes was notorious for her fierce retaliation for any criticism. She fired her CFO in an instant after hearing his concerns that the company was fooling investors with falsified results. “You’re not a team player,” were her last words.

God gave us two ears and one mouth. Founders with a healthy level of confidence listen and talk according to this divine anatomic proportion.

Silicon Valley filled itself with founders with a so-called Messiah Complex.

These founders believe that the world rotates around them. They enter the room and expect the people to part like the Red Sea.

Don’t get me wrong. Belief in yourself can make you incredibly rich. It makes you achieve things that other people will never even dare to dream of. A healthy level of obsession is required to become a successful entrepreneur, no doubt in that.

Yet, when the founder crosses the line and places himself in front of his mission, the ship heads for the rocks.

One founder got furious at me because I refused to fund his startup. He hasn’t sold a single product nor had a prototype, yet he claimed customers were piling up in front of his office. The picture didn’t add up. His ego surpassed his assets and his achievements.

On the opposite end are founders like Adam Neumann. The self-aggrandizing CEO had evidence to prove his achievements: billions of dollars in funding and the cosmic growth of his WeWork empire. Yet, his ego has led to one of the biggest startup collapses since the dot-com.

To test if a founder is infected with the Messiah Complex is challenging their achievements. Overconfident entrepreneurs get all steamed up trying to prove their importance and greatness.

Go to Publisher:

Entrepreneur's Handbook – Medium

Author: Andrei Neboian, Dr