No I in TEAM
The irony of the cult of entrepreneur is it’s not about you.
When it comes to building great companies, a leader’s job isn’t to make it to the top of the mountain themselves. Instead, the task is to help others reach peaks they want to climb but might not be able to without the help of a leader. — Joel Peterson
Fred Wilson’s essay on tenacity inspired me to share what I believe are four qualities required to be a founding CEO. They don’t guarantee success, far from it. What they do do is give you a shot. The reason they do is they enable you to last long enough to build a great team.
I am not throwing away my shot.
It’s now arguably over-written about and over-discussed how hard it is to be an entrepreneur. Of course it’s hard. So is being a parent. Let’s stop over-congratulating ourselves and let’s just do our work. Nobody makes us do this, and as Ben Horowitz says, nobody cares. That said, “getting through it”, which is paradoxically ten years if it works, requires a bottomless pool of tenacity — a never give up attitude. I used to think of this trait as someone who would rather die than fail, but after two entrepreneur suicides that I know of, it hits too close to home. Keeping perspective while giving something your all: this is the trick. Tenacity is not about avoiding being overwhelmed, but being indomitable in the face of the overwhelming odds of your venture’s failure. Bear in mind it’s your venture’s failure, not yours — at least in America, where a cat has nine lives, and where frequent rebirth is encouraged.
Plenty of entrepreneurs can start a company. What is more rare is to evolve it and to scale with it over time. There is a fierce intellectual honesty required for this, and it must somehow sit side-by-side with intuition and conviction about a future for which there is no proof. Have too much conviction and not enough data-driven honesty, as fantasy collides with reality? Watch your company fail. Have too much of a reliance on consensus, or too much of a need for daily evidence and therefore not a fast and sharp enough point of view? Watch your company fail for the exact opposite reason.
If you can evolve your product, your strategy, your culture, and your team in the right ways — you get to do the hardest part: evolving yourself to scale with the company. This is the difficult, introspective, self-mutilating, privileged work of covering for your weaknesses — which the company becomes less tolerant of — as it scales. It requires those beautiful twins: empathy and self-awareness.
The good news: entrepreneurs who are honest about why their company sucks — the fuel of company improvement — also tend to be the people who can acknowledge why they suck — which is the fuel of self-improvement. These evolutionary abilities go hand in hand in parallel, which is why I like entrepreneurs, and people for that matter, who are searching for the truth rather than just looking to be right. As they say, “a searching and fearless moral inventory of our ourselves” is what we need.
A good idea is not enough. It must be the fit of a particular idea for a particular entrepreneur, and ideally unfair advantages in why said particular entrepreneur is going to address said particular idea. The world is competitive. So why you? And why you for this idea of all the people who might happen upon it?
Ideas are worthless. Execution is everything.
If it’s a consensus idea, it’s probably bad, because everyone else is trying. If it’s a non-consensus idea, it could be good, but why you for this contrarian idea? If no one else in human history has done it, why will you be the first?
What is an unfair advantage, anyway? It’s something in your experience, your life story, or your network, and perhaps even multiple things, that answers the question: why you, of all the people who have ever lived, for this? This authenticity might be called product/market/entrepreneur fit. Others call it serendipity or coincidence. Still others view it spiritually.
Magnetism to attract talent and capital at all times, at all costs: this one speaks for itself. It’s not so much can you do this when the chips are up, it’s can you do it when the chips are down? A seed funded company is the beginning. But it’s attracting the later rounds, or better yet the ability to build a faster path to profitability, that become the true test of can you take a promising idea to a promising company to an actual living and breathing cash-generating business. As far as talent goes, you’ll need amazing people long before they should join. They will need to be cajoled. They will need to believe that equity in the company is worth something. They will need to stick with you when the chips are down. In Sapiens, Yuval Noah Harari talks about entrepreneurs as shamans. Will you be a charlatan, selling phantom stock, or a visionary, who makes people rich, and more importantly, makes them believe that they are building a better future?
At our seed venture capital fund Red Swan, we used to call this MATE, as in if you could meet an entrepreneur who met all four criteria, you had a retrospectively predictable model to find great entrepreneurs:
Then it dawned on us we could re-arrange it to TEAM. Aka if you do all this, on the way, you’ll by definition build and evolve a great company and team, which is what’s required to actually grow and scale a winning idea. An individual entrepreneur or a couple of them can start a company. But it takes a village to build one, or a tribe if you will, and a senior council of leaders to really guide that tribe.
At the core of that tribe may be a shaman, breathing to life culture, tenaciously and authentically magnetizing and evolving a magically contrarian idea to life. But by the time that shaman’s work is “done”, they will be the very definition of my favorite quote on leadership. I stole this from Mark Leslie.
It’s by Lao Tzu:
A leader is best when people barely know he exists.
When his work is done, his aim fulfilled, the people will say: We did it ourselves.