Entrepreneurs have been, for centuries, one of the engines behind wealth and job creation. This major contribution originated a common idea that entrepreneurship is good in its own right and in any form. The reality, however, can be rather different. There is good and bad entrepreneurship.

By Professor Dr Maurits van Rooijen, Rector and CEO at London School of Business and Finance (LSBF)

Most people assume that successful entrepreneurship starts with a really good business idea. It surely might, but actually you can be successful with an uninspired or even daft idea. The Japanese shoe salesman who believed he could sell more shoes by adding a badly drawn nameless kitten to his products would have been flabbergasted to learn about the Hello Kitty empire that subsequently emerged, with a massive assortment of products ranging from amusement parks to credit cards. And which bank would have been seriously excited about funding an emporium of flat pack furniture with instructions that probably only make more sense in Swedish? Yet IKEA pulled it off. Most entrepreneurs are successful without an exciting product idea, or alternatively by linking up with someone who does have a smart idea.

The key to success as an entrepreneur is attitude, ability to cope with major setbacks and the ability to bring the right people in as part of a team. A successful entrepreneur knows he needs people who understand finance, who can help on the legal front, who are creative in marketing, who know about production, and so on. Good entrepreneurs don’t need a massive set of skills, other than the ability to persevere, to create enthusiasm, cultivate networks and crucially, to be able to think from the consumer point of view – because it is their loyalty that will decide if an enterprise will prosper.

Unsuccessful entrepreneurs tend to focus too much on the product, work too much as a loner, and are unable to cope with inevitable setbacks and the sleepless nights they cause. Entrepreneurship can be great fun, and can bring significant fortune but is not for the faint hearted.

Good and bad entrepreneurship is not just a rational matter, it also has a moral dimension. Entrepreneurship seen as a ‘get rich fast’ route in life is a bad business concept. Entrepreneurs who believe their venture is like a lottery ticket, dreaming to get a naive venture capitalist to write a fat cheque in return for a dubious enterprise, are in for a big disappointment. Greed is the worst base for entrepreneurial success. More realistically, setting up an enterprise offers the prospect of a decent return for hard but satisfying work.

As we all know, entrepreneurship is about taking risks, which is not the same as gambling. Good entrepreneurs tend to take carefully calculated risks combined with a good sense of gut feeling. Importantly, they have red lines which they will never cross. These are not just the lines of the law, it is just as much about understanding the need to diversify and avoiding putting all money on one card. But it is also a matter of ethical behaviour. I am not referring to the big ethical and always complicated issues, but more the everyday matters, such as attitude towards clients, style of negotiations and deal making. Top entrepreneurs earn trust from clients and partners and earn respect even from their competitors. Bad entrepreneurs are overly aggressive, out ‘to kill’, despise their clients, and mistrust even their own employees. While they feel excited about sailing close to the wind, in reality they readily cross the red lines of decency. Often the line between ‘good’ and ‘bad’ is far from black and white – and a good entrepreneur stays well clear of that grey territory.

Finally, the best entrepreneurs recognise the potential of entrepreneurship to be a powerful force for good. They feel a sense of responsibility: towards their staff, their partners, towards their clients, even maybe towards the world, towards next generations. Business has the ability to make a big difference in a very positive sense.

Choosing to become an entrepreneur is opting for a wonderful, albeit demanding – and at times pretty steep – road in life. It can take you far, it can be rewarding, it can be a magnificent experience once you reach a point at which you can look back, but only if the steps on that road are taken with confidence, with positive energy and most importantly, in the right direction.

Entrepreneurship is not good per se. It requires the entrepreneur to understand what it takes to be a truly good entrepreneur. That also explains why education plays a bigger part in entrepreneurial success than one might think. In an era where even successful entrepreneurs like Richard Branson recognise the importance of a degree, the right kind of education, possibly combined with coaching can help to understand the many aspects that make ventures successful. As well as building up the right levels of confidence, strength of character and the opportunity to combine strength with like-minded people.

Successful entrepreneurs are aware of image, reputation and protect their integrity. Most importantly, they understand that, in the longer term, bad entrepreneurs tend to turn into losers.