It was inevitable: leave millions of bright, restless individuals lounging about in their pajamas, wondering if and when they will get back to work, and soon they begin to think about creating their own work. For the majority, those fantasies turned out to be just disgruntled, wishful thinking. Could knowing the qualities of a startup founder be helpful? Some of those dreamers, however, found they had the time to flesh out their ideas, ideas they had been toying with for a long time. Next, they were creating business plans, looking at calendars, staying up late to work on analytics, and researching market niches. Within this group of people, entrepreneurship was conceived.
Conceiving an idea, however, is a long way from building a successful business. The statistics are pretty stark: less than 50% of startups make it to their fifth year. Only about a third celebrate their 10th anniversary. To avoid becoming another statistical failure, how can a person tell if she or he has what it takes to turn a dream into a successful startup? Some might say that the brilliance of the idea is the most important element. This is not the case. We all know that if two entrepreneurs have the same genius idea, only one—at best—will succeed. It’s not the dream. It’s the person who’s breathing life into it. Here are the seven key characteristics of a great startup founder.
1: Vision
A successful startup founder must have a comprehensive vision of the startup and its trajectory. It’s essential to note that a dream is not a vision. We all have dreams of what we’d like to accomplish. Vision involves taking the fanciful dream—that beautiful insight, that “aha” moment—and imagining how to turn it into an enduring reality.
The founder’s vision must be free of “magical thinking,” that is, in envisioning how the startup gets from the business plan to the IPO, all the dots have to be connected. When we speak of someone as a “visionary,” we picture a “big picture” person. The successful founder, however, has to see all the little paint-by-number steps that lead to the finished, glorious mural.
Above all, you cannot suppose that things will just occur because you assumed they would. As Chana Shoenberger writes: “Business and government leaders like to act strategically or presume they do. But in many cases, their decisions—business, and personal—are informed by superstition, research suggests.” Failure to logically process all the steps is almost certain to undo even the best ideas.”
As part of the full vision, the founder must ask, “How will I know when I have succeeded?” To be sure, along the way, that definition of success may be altered. That’s to be expected with a vital, growing business concern. Still, the founder must have a vision of success in order to begin—a goal for which the startup is aiming. While wild, unexpected growth might happen—and it would be welcomed, the initial vision of success needs to be realistic, verbalized, and shared with all those engaged in the project.
Another aspect of realistic vision is an awareness of the potential challenges and obstacles the startup is going to face. Every homebuilder sets aside a certain percentage of the projected budget for cost overruns for the unexpected. A visionary founder has to be able to forecast the potential speedbumps and also to realize there will be unexpected problems as well.
2: Passion
One of the signature qualities of people who launch startups is an inability to say “no” to an idea, an idea that simply would not be set aside any longer. Walt Disney was a struggling illustrator who left a paying job because he had to see where his mouse—Mickey—would take him. Eventually, Disney’s passion changed the world.
Passion is revealed to a great extent in the way a founder describes his or her startup. If a founder says, “Let’s try this and see if it works,” it reveals an alarming lack of desire. If a founder says, “This is going to happen because it won’t let go of me,” that implies the sort of zeal that is necessary for success. Most great entrepreneurs never lose that burning need to breathe life into their dreams.
As the story is told, Thomas Edison’s famous laboratory at Menlo Park caught fire and was largely destroyed. Edison showed up at the scene and helped extinguish the blaze. When the fire was out, he immediately began to turn to his weary, disheartened colleagues, and began to tell them what he expected them to do to rebuild the lab. In the midst of giving orders, he stopped and asked quizzically, “Does anybody know where we can get some money?” His passion overrode the discouragement of the moment.
While passion is an essential quality, the founder must also be able to restrain that passion. There must be sufficient maturity and judgment on the part of a founder to hold passion in check. Passion is the rocket fuel of the startup, and, as such, it must be contained and well-directed.
3: Team Building Ability
Unless the startup is a one-person popcorn and hotdog stand on a busy street corner, every founder must have a team. Even the individual going into business for herself or himself is going to be dealing with experts in various fields: tech people, tax people, and financial advisors. And, even if the startup is no larger than this, these supporting players must be chosen with care. The vitality of the startup depends on choosing the right suppliers, experts, and counselors.
Most startups are not just individual proprietorships, however. The founder will need to bring in the right people to accomplish those tasks that are necessary for the startup to thrive. Therefore, the founder must have certain abilities related to interacting with employers, contractors, and suppliers. Here is a brief list of necessary HR skills:
- The founder must be able to make hard decisions about other people.
- The founder must be able to put aside emotions and ignore relationships in making judgments.
- The founder must be empathetic, but not to the extent that it interferes with the overriding vision for the business.
- The founder must have some insight into human nature, enough to be able to guess how people are going to respond to her or his decisions and why.
Volumes have been written about the folly of going into business with friends or family members. With such an arrangement, the founder will only succeed if the startup is organized in such a way as to place him or her in charge when critical decisions have to be made. The founder must be willing to recognize that feelings may be bruised and relationships impaired to achieve the startup’s goals.
4: Goal Focused
Simply put, this means the successful founder is one who will not get distracted from the original mission of the startup. It is a virtual certainty that, during the highly creative process of fleshing out operating procedures and establishing goals, there will be moments in which new ideas spring forth. There is a tremendous temptation to “go down the sideroads” and chase some newer dreams. What’s actually happening is a repetition of the earlier part of the vision process, the easy part in which one can imagine lots of possibilities and rewards. The successful founder is one who is not distracted from present responsibilities by future possibilities.
Once a startup is up-and-running, there will be many other opportunities to chase off in new directions. One term often used for this phenomenon is “mission drift.” While there is nothing wrong with pursuing new directions and setting advanced goals for a business, the time for this is after the success of the startup is assured. To lead the startup not in a slightly different direction but down an altered path is an indication that the original startup failed, that the vision was flawed, and the passion simply wasn’t real.
Above all, being goal-focused entails an unwavering devotion to the client or customer. The ongoing success of any startup requires engaging one’s customers where they are and providing for them with such singleness of purpose that the company’s integrity is beyond doubt. Wherever future ideas may lead, the founder recognizes that the purpose of the startup is to fulfill the initial vision of the founder.
5: Not Afraid to Ask for What They Need
When would-be entrepreneurs set out to begin a startup, they often tend to downplay important aspects of their business plan, in particular the financial piece. Successful founders share the quality of being confident enough, brave enough, and insistent enough to ask for what they need.
One anecdote that bears this out is Elon Musk’s retelling of the hardship he faced when trying to get his revolutionary total electric vehicle, Tesla, into the hands of consumers. It’s difficult to imagine at this point, since Musk’s personal fortune is around $12 billion, that he was going hat-in-hand to anyone who might be able to bail out his company. He had made a fortune by 2008 and was generally regarded as an eccentric genius. Having invested all his personal fortune in Tesla, he still came up short of having the production money he needed to make the car available. Such was his belief in his vision that he sought and found investors. Today Tesla is valued at $208 billion and is viewed as the car company of the future—all because Musk believed in his vision and wasn’t afraid to ask for what he wanted.
Sometimes, if a founder needs financial undergirding, asking for what she or he wants means making some sacrifices. For instance, if an investor believes in a company enough to help fund it, that investor may seek to participate in the future of the business through a partnership of some kind or an equity dilution, which essentially creates a new block of shares for the investor without taking any away from current investors. Founders who are passionate about their vision are typically also willing to share the risk and the reward of pressing forward to success.
6: Humble Enough to Listen and Hear
It’s one thing for a startup founder to be bold, confident, and assertive. The problem is, many new business owners get to a place of blind denial about the weaknesses and potential failures of their startups. The successful founder must be willing to listen to the insights and concerns of colleagues, employees, customers, and investors. Unfortunately, some new owners pay only lip service to the wisdom and cautions of associates. They may fear being perceived as weak if they do not bullishly charge forward with no significant correction of the course. This should be considered a warning sign of potential failure. If a vision is profound, workable, and on target, it has nothing to fear from the observations of others, even of those who don’t share the vision. If a founder feels the need to ignore all criticism and charge forward, it is an indication that, on some level, the founder has lost faith in the vision.
7: Persistence/Resilience
One experience that has been shared by virtually every successful entrepreneur is having had someone come along to tell them that their startup was going to fail or that its future was going to be extremely limited. Founders must be able to deal with naysayers, economic downturns, unexpected legal obstacles, unseemly regulations, and bad weather. The successful startup founder will have the attitude, “We knew to expect problems like these, and we aren’t deterred.”
One of the great leaders who personified persistence was Winston Churchill. One of his favorite mottos was, “The bulldog’s nose is slanted backward so it can breathe without letting go.” This is the essence of what a founder must do when convinced that his or her vision is correct.
Inspiration tends to be a very individual phenomenon. Even the visions that arise from inspiration may not catch on with a great many people. The successful founder of a startup must recognize that she or he alone received the inspiration, developed the vision, and is now pursuing its fulfillment. It will only be in retrospect that the public as a whole will recognize the profound truth that drove the founder to continue working, refining, and expanding until the startup was clearly a success. To make that happen, the founder must be a resilient, persistent human being.
Summary
From this enforced pause in global economic activity, many new ideas and new entrepreneurs will emerge. Those who are most successful over the longest period of time with their startups will possess certain common characteristics. Those qualities will include vision, passion, the ability to build workable teams, the ability to stay focused on a goal, the willingness to ask for what is needed, humility, and persistence.
About the Author
Jonathan Hung is one of the most active Los Angeles angel investors, his mission is to drive value creation within each portfolio company. In support of this mission, he serves as Co-Managing Partner at – Unicorn Venture Partners.
Jonathan and his team target investments in US companies that have global market potential with a focus on long-term growth expansion to East Asian markets.
Jonathan developed his investing prowess as a Managing Member for his family office fund, J Heart Ventures, which made investments in start-up companies such as Gyft, ChowNow, Miso Robotics, Clover Health, Bitmain, to name a few startups he funded.
Jonathan has various degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.
