There is a scene in the movie “Madagascar”…
Skipper: “We’ll fix it.”
Alex: “How are you gonna fix this?”
Skipper: “Grit, spit and a whole lot of duct tape.”
This attitude epitomizes one of the traits we look for in founders. Great businesses are not dumb luck, they’re usually the result of some unique traits.
In a post entitled Dangers of a Single Founder Business and “Ideas” I alluded to one element to look out for in founders. Today I’d like to cover some of the characteristics we look for in founders.
You can’t always find all of these characteristics but a preponderance of them is a good sign.
This could easily go under the moniker authenticity. Included in this is honesty. Honesty and integrity are bedfellows. The slightest sign of dishonesty or lack of integrity and I’m gone. Next please.
This gets a lot of bad press. Visions of used car salesman swim through people’s heads, but consider the following people and then tell me what they do for the companies they work for:
- Richard Branson;
- Larrry Ellison;
- Oprah Winfrey;
- and, Martha Stewart.
These are all people who can compellingly convince customers to buy what they’re selling. This is also a great trait for a founder since he or she is the one who convince employees to sign on, often for less money than they may get elsewhere, and also must convince early investors to fund their business. Ultimately every company needs promotion.
3. Technology Savvy
This one may surprise readers. Many people who think of startups automatically think of Facebook, Zenga or some sort of technology-driven company. It’s obvious nonsense of course. We have for example a company in our portfolio which manufactures machinery used in logistics. Here is the thing though, technology is THE key driver of scalability and cost reduction, and it is for this reason that founders of almost ANY business in the world today HAVE to have some tech savvy.
Its not just something for the bedroom…or dining room table. The greatest businesses are built on a passion for the business, never with the sole intention to buy that “Lambo”. Being an entrepreneur will test you and you’ll fail unless you’re passionate. It is passion that will keep your energy levels high when you’ve only had a couple hours of sleep and are due for an 18 hour day. Our rule: no passion, no money.
I’ve met far too many entrepreneurs who just haven’t done their homework. They’re already at the stage of raising capital and have not done thorough research on their market, built a business plan, prepared budgets, or trialled their product (depending on the product). Founders have to become experts in their chosen field. You wouldn’t go get eye surgery done by a mechanic. Don’t invest in founders who are setting out to become eye surgeons with a mechanics skill set.
6. Knowing themselves
One of the most difficult things for a founder is to give up his baby. They’ve sweated over it, cried over it, lost sleep over it, often jeopardized relationships over it and now the time comes when their skills are not sufficient to take the company to the next level. It takes a maturity to understand that you as a founder are not the best CEO, or that in order to trade sell or IPO a different skill set will need to be brought in to take the company to that next level.
7. Grit Spit and Duct Tape
This one covers many aspects for me. It’s all encompassing. One of our portfolio companies brought a woman into the company, actually she found the company and asked to join, but that’s a story for another day, who’s mission it was to position them for a trade sale. When we where first introduced to her we were told she was “scrappy”. Oh boy, is she ever. She is a veteran in the startup field and has dealt with her fair share of venture capitalists and all manner of other inevitable obstacles that young companies encounter. Gritty, Scrappy, call it whatever you will but a founder (or very senior team member) with duct tape skills is invaluable.
The last thing I’ll say is that there is no specific “bucket” that entrepreneurs need to fit into. The skillsets needed to run a business are varied. Do your homework on the guys and gals driving the bus!
“I am prepared to try anything once.” – Sir Richard Branson