Venture Studios Beware: Don’t Expect PMs to be Pioneers
After spending over a decade building out venture studios and startup studios globally, I’ve found there is only one problem that every studio MUST solve: finding great founders. However, venture studios in their race to identify and attract founders to build together and launch the next unicorn, often fall into a dangerous assumption: that a seasoned startup product manager (PM) will invariably make a great founder. That assumption is not only flawed, it’s dangerous to the long term operating success of a startup studio. While prior startup experience is a positive signal and PMs are vital in shaping and refining product roadmaps within established parameters, the role of a founder is an entirely different beast.
Great founders are the lifeblood of successful venture studios. In talking to leaders at leading venture studios like Atomic, Expa and Science, all echoed the same belief: finding great founders is the most critical ingredient to startup success. In my role as COO of Superlayer (web3 venture studio) and previously as the Operating MD at Samsung Next and Samsung Accelerator, I’ve found that no matter what build model we deployed (incubator, accelerator, internal accelerator, venture studio, etc.) great founders have always been the key difference between success and failure.
As venture studios (as well as VCs, incubators, etc.) search for great founders, it is very easy to conflate the traits of a strong startup PM with the traits of a great founder. As a startup obsessed culture, we often lionize early startup employees, especially those who have gone on the rocket ship ride. But it’s one thing to ride on the rocket and a whole ‘nother thing to fly it. I’ve found that startup PMs are often missing the two core traits most critical for founders: a relentlessness to solve any problem and the ability to act decisively, even when swimming in a sea of uncertainty. It’s not that those traits aren’t helpful to a PM, they’re just not as fundamental to success in the role.
Like a pioneer, a true founder embodies relentlessness. They’re the ones burning the midnight oil, iterating, and pivoting until they crack the code. They act like owners because they literally are owners, typically the largest owners of their company. While PMs are problem-solvers, they typically operate within a predefined problem set with clear guidelines. Founders, on the other hand, are the discoverers of the problem, the architects of the initial solution, and the resource allocators needed to make the hard call on how to attack a problem. They don’t just find solutions; they set the mission and then create pathways to achieve where none previously existed.
Moreover, great founders are able to thrive in ambiguity. They make decisions on the fly, armed with limited data, fueled by instinct and vision. A PM, accustomed to data-driven decision-making and rigorous A/B testing, might falter when the luxury of time and ample information isn’t afforded. Founders don’t have the liberty to await perfect clarity; they leap into the void, trusting their gut and adapting as they go. Like a pioneer, great founders take what the tools and information at their disposal and make the best decision possible.
For example, of the ~40 companies we built at the Samsung Accelerator from 2013–2017, 10 ultimately were successes that became internal acquisitions by Samsung. If you were to have met the founders of the ~40 startups ahead of time and screened for only those two traits (relentlessness and decisiveness), I am certain that you could have picked the 10 future successes ahead of time in no more than 12 chances.
It was that clear.
Venture studios, along with any capital allocator to startups, must recognize this distinction. While startup PMs bring invaluable expertise to the table and an ability to work with pace, it’s a fallacy to believe they automatically possess the pioneering spirit and decisiveness intrinsic to becoming a successful founder. Furthermore, one risk that I’ve seen play out repeatedly across multiple studios is for the studio to fall into the trap that their in-house team can substitute or compensate for the lack of founder DNA in the leader they bring in. Whether that’s arrogance or naivete, an in-house team that supports multiple startups rarely has the singularity of purpose and focus to play the founder role.
Finally, one reason studios often settle for a splashy startup resume even while knowing the founding skill set is missing, is that it’s often incredibly difficult to bring a real founder into a venture studio. Unlike most incubators or accelerators, a venture studio takes a meaningful chunk of founder equity in exchange for its co-building services, capital and resources. Many experienced founders are not willing to make that trade-off or find it unnecessary. Meanwhile, many first-time founders are attracted to venture studios specifically because they lack some of the founder capabilities and need the guardrails and hand holding the studio provides. There-in lies the problem: the venture studio is ultimately hunting the type of founder that least needs a venture studio. The best studios are able to find them and bring them on board. The rest delude themselves that the typical startup PM can make it work.
In the end, while startup PMs shape products, it’s the pioneers who define the challenge and shape entire industries. Great founders are unique and often take more convincing to appreciate the value prop of a venture studio. But it is always worth the struggle. Venture studios, make sure you’re not hiring a PM when you really need a pioneer.
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UPDATE: After publishing I received a number of similar questions in the vein of: “Thanks for the POV, but how do I actually test for relentlessness and decisiveness?” Therefore I wanted to address that quickly below.
The easy answer is to prioritize founders with prior founder experience. As the baseball legend Honus Wagner once said: “There ain’t much to being a ballplayer, if you’re a ballplayer”. Same could be said about founders. With that said prior founders significantly narrows the funnel and even prior experience is no guarantee.
Whether the candidate you’re considering has prior founder experience or not, there are a few ways you can vet them to determine if they’ve got those pioneering chops, while acknowledging that it’s difficult to gauge relentlessness and decisiveness in the typical interview format.
The first way we work to vet those skills at Superlayer is to spend as much time together working the problem before signing up to work together. Over a period of weeks, you can get a really strong sense of how a founder works, the urgency they work with and how they handle reaching obstacles in the path to early validation. Often times letting the candidate set the pace rather than providing over-scripted instruction is a great way to see how they lead.
The second approach is to do an extensive reference check. For prior founders, you can ideally connect with people they worked with (team members, investors, board members) at their startup to get that feedback. For all candidates, getting a mix of founder-provided recommendations as well as as mutual connections that are not provided by the founder will ideally get you the unfiltered response you’re seeking. In those calls/meetings, I prefer to try not to “lead the witness” at the start of the discussion, but rather provide information about the role and see what skills the reference identifies on their own. Once relentlessness or decisiveness are brought up, or if I need to prompt it, then I try and go overly deep into the subject, ideally getting multiple examples of the behavior from the same reference so that you can feel confident there’s something real there.
Ideally you’re able to mix both approaches and have a really strong feel for the founder before you decide to join forces.
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Originally posted: September 2023
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Other Venture Studio Content by Gary Coover
- All-In: The Only Choice For a Winning Founder / Venture Studio Partnership — identifying potential blockers to a high-functioning partnership between founder and venture studio
- Perfectly Imperfect: Core Skills and Acceptable Gaps for Venture Studio Founders — Venture studio startup founders rely on the studio to uplevel areas where they may be weakest — but which skills must be present in the founder from day one to be successful?
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Gary Coover is the COO at Superlayer, a web3 venture studio launching the next frontier of tokenized consumer products, in addition to running ops at the portfolio company Taki Games. Previously, he spent the better part of a decade architecting, launching and scaling startup incubation and investment programs for Samsung Next (the software and services innovation arm of Samsung Electronics), including developing a first-of-its-kind incubation model (Samsung Accelerator) and launching a global $150M venture fund. As the Operating MD, Gary directed the selection and launch of Samsung NEXT’s Israel and Europe offices, built and led the platform team supporting venture investments, and ran a pre-seed incubation program. Prior to Samsung, Gary started his career in consulting and co-founded a venture-backed startup in the ecommerce space that resulted in a small exit in 2017.
