Since I posted my Seed VC Decision Tree, one of the most frequent requests I’ve gotten is to define what makes an “awesome founder”. I’ve hesitated to define this because I think evaluating founders is very subjective and I hate to make anyone think I have a particular checklist or profile of founder that I’m looking for. Since starting NextView, I’ve worked with founders of a wide variety of backgrounds, experience, and attributes. Many of these founders share some common characteristics, but if you put them all in the room, I think you’d be surprised at their differences as well.
But, I try to respond to my readers as best as I can, so here’s my best attempt. I think there are many dozens of attributes that awesome founders have, but here are the four that I find to be nearly universal:
1. Smart and Tough. It’s just a baseline requirement. Starting and leading a company is not easy work. Not all awesome founders are necessarily genius-level smart. Nor are all founders UFC-level tough. But there is a baseline that is certainly well above the top 5% of humans on both. No need to say much more.
2. Convincing. Founders need to all have their own way to be convincing. It doesn’t look the same for everyone, but as a CEO, you need to convince people all the time. You need to convince customers to use a product before they really should. You need to convince partners to work with a no-name company at the risk of their jobs and reputation. You need to convince employees to work their ass off for a lot less pay than they are probably used to. You need to convince candidates to join a company that may go nowhere fast. And you need to convince investors to ascribe value to things have haven’t happened yet. Not all founders are evangelistic, charismatic, or the greatest salespeople. But almost all are able to be very convincing in their own way.
3. Superlative. I’ve found that awesome founders tend to be really really great at something. No one can be amazing at everything, but I’ve seen the most success with founders that show superlative traits. I’m always excited when I hear the word “best” in reference calls. A lot of people are “very strong” or “great to work with”. But quite often, when I am referencing founders we ultimately invest in, I hear the person who is providing the reference almost correct me and say something like “he’s not just good…”. This goes for folks with a ton of experience and functional expertise as well as those that are relatively raw or have no prior startup experience. I remember doing a reference call on Stu Wall, the founder and CEO of Signpost many years ago. Stu had no startup experience, and at that point had only been a junior consultant at Bain previously. But I asked one of his former managers how he stacked up relative to the other associates she had worked with – top 5%? Top 10%? “Oh no” she said “Stu is clearly the best”.
4. Fitting for the task at hand. Every company is different. All around athletes are fine, but usually, great founders tend to be tuned well to the task at hand. This doesn’t necessarily mean domain experience. It does mean a strong overlap between the skills and attributes of the founder with the short-medium term needs of the company she is trying to build. It doesn’t do much to have a strong, technical founder at the helm of a company where technology is not a differentiator. It also doesn’t help to have an experienced, Fortune 500 exec at the helm of a company that is all about building a great consumer-social product experience. Many founders have multiple strong attributes, but great founders are great in the context of the task at hand.