By Will Klippgen & Michael Blakey
Since 2000, we have invested in over 50 digital companies across Asia, Europe & the U.S. and seen great successes as well as the occasional spectacular failures. We sat down and talked a bit about the largest success stories and asked the question: Did the successful founders possess certain qualities that were absent in the teams that failed? The answer, we think, is yes, and here the top 5 traits we were able to draw from our past and ongoing success stories, enjoy:
1. Confidence and resilience
Our good founders are self-confident. Not arrogant or over-confident. Self-confidence has a lot of positive side-effects that we believe are important when navigating the stormy waters of a fast-growing startups. First of all, it makes founders able to engage constructively with more experienced, competent and smarter people than themselves. Where insecure founders will stone-wall, shy away and sometimes, be outright hostile, confident founders engage constructively to discuss, listen and learn. They are also able to take advice in a way that does not steer them off course including disregarding advice they find irrelevant.
We also found that confident founders hire people that are better than themselves. Insecure founders tend to focus a lot on control, and for them, competent people are a threat as they also tend to be afraid of their own positions in the company as it grows.
Starting a business is often like stumbling in the dark, looking for the way forward. The most successful founders not only accepted coaching and experimented with multiple options, but also actively sought out mentors around the world to assist them. They often pivoted their businesses once or even twice – each time moving forward with a more experienced team with valuable lessons under their belts. A wise man once said that “Success is 99% not giving up”. Startups require both confidence and resilience.
2. Staying focused
Good founders are creative, full of ideas, but the best founders focus on one problem at a time. Startups have very limited resources, and the best teams tended to do one thing at a time. By this we mean e.g. one product, one key customer segment or one key market at a time. The sense of urgency that often plays in the mind of entrepreneurs can create forced sense of having to do everything at once. This is usually not the case. Most of the time, competitors move slower than you think, and customers are slower at adapting to your products and services.
One of the hardest words that entrepreneurs need to learn to say is ‘NO’, even if it means turning down revenue. Short-term opportunities often stand in the way of building a path towards long-term revenue. If you focus on where you want to be in 5 years, and not in 5 months, you will most likely make wiser decisions.
3. Being a hustler
One of the common complaints that investors hear from entrepreneurs, is that they never have enough money, but early-stage companies will always be short of both cash and other resources. Hustlers are those that can achieve amazing things with nothing or very little and puts in blood, sweat and tears with only goal in mind – success.
One of our successful founders pawned her jewelry, moved the entire office to her apartment and did part-time consulting to get through the financial crisis in 2008 and 2009. All the time while hustling for new contracts for the main business and growing it to become the largest in Southeast Asia a few years later while raising millions of dollars from prominent investors. Our most successful teams had at least one hustler. Have you got one?
4. “Failing forward”
The fascinating aspect with successful companies is that they usually started out as something different. Finding the product or service that starts scaling like crazy often takes a lot of experimenting. In Silicon Valley, you often hear about “failing forward” – the concept of finding your path gradually by multiple, controlled experiments that most often fail. Our most successful founders adopted this principle at varying degrees, accepting the fact that whatever founders or investors might think is the right answer, the market is the one which should decide. By designing experiments so that the outcome would move the company gradually forward, a lot of time and money was saved, and the the risk of moving too far in the wrong direction was minimised.
Using this principle, one of our companies soft-launched their website in multiple countries, and only invested in the countries where they saw high organic traction. At a micro level, other companies tested marketing campaigns by spending less than $20 on each ad version and checking traction to find the best performing version.
Although it sounds wrong at first, many of our favourite founders were “ruthless” in the sense that they understood that the business should always come first. They were able to let go of the wrong hires and they were the ones willing to admit their own mistakes and take corrective action. Problems do not go away – they need to be dealt with here and now.
We hope these five traits have been useful. Please add your comments below and get the conversation started.
© 2016 Cocoon Capital Partners. All Rights Reserved. We are happy to let you reprint this article if it is attributed to us and linked back to this website.