En trepreneur Joseph Costello '74 says entrepreneurs are born that way.

During the April Entrepreneurial Conference sessions, there was a lot of talk about passion—the kind necessary to dream up something new and bring it to fruition. Joe Costello ’74, recipient of HMC’s Entrepreneur of the Year Award and known for his passionate persona, was one of those who shared his experiences and insights about being a successful entrepreneur. Those who have followed Costello’s career know that he has much to say on the topic.

While CEO from 1988 to 1997, Costello helped Cadence Design Systems grow to be the world’s leading supplier of electronic design automation (EDA) software and services and became the first EDA manufacturer to approach the $1 billion mark in revenue in 1997. That same year, Costello was named the top performing CEO of all publicly traded companies in North America by Chief Executive magazine and made Upside magazine’s “Elite 100” list of top executives leading the digital revolution.

In 2004, Costello received the Phil Kaufman Award given by the EDA Consortium for his business contributions that helped grow the EDA industry. He is the current CEO of think3, a top supplier of product development solutions to mid-sized manufacturers worldwide and a provider of innovative, next-generation product design solutions for the industrial design industry. Costello is credited with dramatically growing the Cincinnati-based privately-held company, which enables more than 5,000 manufacturers to achieve significant gains in competitiveness and profitability by optimizing their product development process.

Costello is also chairman of tech company boards Readio, Orb Networks, SpeakESL and Santa Cruz Networks.

So, if anyone knows innovation, it’s Costello. And in his usual charismatic fashion, he took on the question, Are entrepreneurs born or bred?

Born, stated Costello. But, he added, “you can train the entrepreneur out of people.”

Costello said entrepreneurs are easy to spot if you know what habits to look for and encourage.

“The number one habit—most important, far and away—for entrepreneurs is the positive end in mind,” said Costello. He spoke in depth about this—“the most riveting single lesson” of his life—at the May 2001 Commencement at which he was keynote speaker. “Ninety percent of the human condition is negative target fixation,” Costello said of the tendency to focus on what we do not want to occur. “Fixate on the positive things—the open field, or the positive end in mind.”

Another trait of a born entrepreneur is that of natural rebelliousness and the habit of being a rule maker. Costello said that in his role as a startup investor, the number one thing he looks for in business plans is a rule changer, which can be related to price, channel, business model, etc. “If there’s no rule changer, burn it, banish it, it’s not going to work. It is hard enough to succeed as a large company with something new. As a little startup company, if you don’t have some significant rule changer, you’ve got nothing.”
But don’t expect your concept or business to be welcomed with open arms, warned Costello. Other companies are “winning with their set of rules until you come along and want to change them. They’re going to call you all kinds of names: an idiot, moron, illegal, dangerous. You have to be ready for that. It’s going to happen.”

With a world full of opportunities, born entrepreneurs are constantly thinking and dreaming about how they might change things. Costello advises these visionaries to choose something in this opportunity-rich world and run through “simulations” in their minds: “the changes that are going to be created, the technologies that must be put together to make it work, the influence that it might have on society, the kinds of customers, what happens if you go for it or if you don’t.”

What’s really important about these simulations is not to be narrow, said Costello. Expand the simulation to “all the possible aspects that your bringing this change to the world might have. How might people react? What people will react? What will be the emotional and psychological response? Who will hate you and try to cut you off? How might they cut you off?”

Not surprisingly, Costello ended his talk with a word about passion, something he also referred to in his 2001 commencement talk. “You have to follow your heart in whatever you’re pursuing and don’t get sidetracked by something else—money, obligation, fear of losing. If you lose touch with that heart, you’ll lose that passion, and without that passion, you’ll fail. It’s really got to come from that intense passion, and that’s about following your heart.”