When we are young, adults ask us what we want to be when we grow up. It is pretty much the standard question at any family event. As we get older, people gradually stop asking us what we want to do, and by the time we are grown up no one ever asks at all. 

It’s a real shame because no matter what we have already achieved, having the ambition to achieve more can be a wonderful force. Ambition drives us forward and helps us make the most of our potential to achieve something special, not just for ourselves or our families, but also for the world. Without it we would have no inventions, no innovation, and frankly, no significant progress.

As a result, I believe that “entrepreneur ambition” can be a very potent predictor of long term stock market returns. This is why detecting ambition is particularly important when Investing in Mavericks. Recall that Mavericks are innovative companies that are bringing the world forward. They are looking to benefit from “significant changes in the status quo”. By definition then, Mavericks are doing things that haven’t been done before. That’s ambitious.

The challenge however is that ambition is a subjective trait, and therefore very hard to detect. Add to that the problem that as stock market investors, we must assess ambition from afar (most of us do not have direct access to public company management teams, and even those that do, typically don’t for extended periods of time). As a result, pinpointing the extent of a person’s ambition can be very hard. 

That said, I believe that if we look closely, the world sometimes gives us clues about an entrepreneur’s exceptional ambitions.

But what should we be looking for?

Although there are many qualities exhibited by ambitious entrepreneurs, here are three:

• First, we need to look for intrinsic motivation. Most public company CEOs are independently wealthy. So why would they slave away building a company when they could literally do anything with their time? Well, we’re looking for people who have more than just a financial commitment towards their company… we want to see an emotional one. We want CEOs who actually “care,” which often leads them to take a long term view. 

• Second, we want to see a commitment to bulldoze through the inevitable obstacles their companies will face. The companies and entrepreneurs that survive need to balance optimism with realism, risk management, resilience, and a plan to turn the inevitable crises into opportunities.

• Third, we want to see a ferocious drive and work ethic. 

Let’s look at a few examples. 

Caveat: Of course, confirmation bias played a big role in the list of examples below. There are plenty of entrepreneurs who have demonstrated the above traits but haven’t succeeded to the extent the below entrepreneurs have. Although ambition may be necessary for extraordinary business success, it is certainly not sufficient. So even if we see the above qualities in an entrepreneur, it may not be enough to predict long term stock market returns. I do believe however that it puts the odds of success in their favor…and ours, as investors. 

Elon Musk: “I Don’t Ever Give Up”

Considering his popularity and public persona, Elon provides the most obvious example of “entrepreneur ambition”.

Why would someone start a Car company, let alone a Rocket company? The odds of success don’t seem very high. It’s because Elon really believes in their mission: 

Elon’s financial freedom came a long time ago. From the sale of his first company, Zip2, Elon personally received $22 Million. Later, he sold PayPal to eBay, and received over $100 Million. Most people would call it quits after such success. Not Elon. 

It has been well reported that SpaceX had three failed launches before finally launching Falcon 1 in 2008. These failures almost bankrupted not only the company, but Elon himself.

See the 1 min 23 sec mark:

Now, if that doesn’t demonstrate intrinsic motivation, a ferocious work ethic, and the commitment to overcome challenges, I don’t know what will.

Mark Zuckerberg: 300!

In 2011, here is what Ron Conway, an extremely successful Silicon Valley Angel & Venture Capitalist, had to say about Mark Zuckerberg:

One of the best Angels in Silicon Valley was telling us that Zuck was a learning machine...clearly someone with ferocious drive and work ethic, but most importantly, a commitment to tackle head-first all the obstacles in his way. Although Facebook was already a massive success by the time it came Public, it certainly has gone on to even greater heights since then.

Here’s a nice thread on Zuck, plus some history:

Jack Dorsey: Emulating Steve Jobs

Steve Jobs was a visionary, and led Apple from its lowest point to become one of the most successful companies in the world. Is Jack Dorsey on a similar journey at Twitter, after becoming CEO of the company he started a long time ago? 

Here’s a great little article showcasing how Jack may in fact be emulating Jobs:

• [Is Jack Dorset Emulating Steve Jobs?] 

Tobi Lütke: “I’d rather Buy Amazon”

Last year, I came across this exchange on Twitter.

@GabeFin and @Larry_OBrien1 suggested that Amazon could easily acquire Shopify. 

The tweet tells us that Tobi had no intention of selling. He is building a meaningful world-class company for many many years to come. As a Shopify shareholder, I look forward to what the future holds. (Hopefully several more doubles still to come).

But It’s All Subjective

The above examples may just seem like quirky things entrepreneurs say or do. 

But extraordinarily ambitious entrepreneurs invest their time, energy and attention to push boundaries, not only their own, but also the ones set by humanity. They have a different level of perception: their rational words and behavior may not seem like much. But sometimes, as acute observers, and as investors, we must choose to trust them.

Of course, as I said above, confirmation bias played a huge role in the list of examples above. There are plenty of entrepreneurs who have demonstrated the above traits but haven’t succeeded to this degree.

Ambition therefore may be necessary for extraordinary business success, but it is certainly not sufficient. So even if we see the above qualities in an entrepreneur, it may not be enough to predict long term stock market returns.

I do believe however that it puts the odds of success in their favor…and ours, as investors. 

• If you enjoyed this article, share it with a friend, they may like it too!

Thank you and Happy Investing!