Extraordinary Start-Up Leadership During Extraordinary Times
“Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.”- General Norman Schwarzkopf, U.S. Army
During this especially difficult time, we are reminded of the importance of leadership. At the time this article was written, the Dow Jones had lost nearly a third of its value in just 30 days. The global economy has practically stopped, causing widespread feelings of anxiety in America and beyond. COVID-19 has thrust the world into an environment of uncertainty and ambiguity. To many start-up founders, this scary and ambiguous environment — though massively amplified — is quite familiar. How much runway does my business (and family) have? How do I manage my existing cash and people? Do I need to pivot the business? How do I sell my product or service into this economy? Where are the revenue opportunities and how do I exploit them?
After a collective 13 years of individual angel investing, we founded Moonshots Capital in 2014. Our investment philosophy then and now is: We invest in extraordinary leadership. For three years, we ran angel syndicates and deployed just over $10M. We then decided to make our side hustle our main hustle by raising a committed Fund 1. Since October of 2017, we have been investing out of Fund 1.
Our investment philosophy is rooted in our:
2) Collective 20 years of service in the Army
3) Post-military entrepreneurial, operational and investment experiences resulting from building 12 profitable companies, operating for 31 years, achieving six exits, and investing in 85 companies.
These experiences and investments have led us to believe that the only thing that can be controlled for when investing at the early stage is the quality of leadership. No matter the category, be it fintech, transportation, or quantum computing, nothing matters more than the leadership capacity of the founding team. Not surprisingly, we like investing in companies led by military veterans. Quite literally, millions (upon millions) of dollars have been invested into leadership training of our Nation’s military. In addition, many military veterans have served in combat zones where they have been tested in the ultimate high stress, high uncertainty environment. To date, 53 percent of Fund 1’s deployed capital is backing companies with a military veteran on the founding team. If we include all of our angel, syndicate, and Fund investments totaling $26M, that percentage increases to 56%.
Of course, the military does not have a monopoly on leadership. We meet many extraordinary leaders trained through trial-by-fire experiences. Some of these founders have previously built failed and/or successful companies and have the scars and medals to show for it. Some of these founders have been grinding in a sector for years and have deep domain experience to facilitate the building of a competitive moat. In the end, we believe that the best entrepreneurs are those trained through military or trial-by-fire experiences and have the ability to motivate others to action, inspire trust and plan heuristically.
As we continue to confront the COVID-19 crisis, we no doubt need extraordinary leadership, particularly among those in positions of public authority, but truly everywhere — from our companies to our communities. Given our roles as General Partners of an early stage venture capital firm, we are working very closely with our portfolio CEOs. We are witnessing them demonstrate extraordinary leadership in a variety of ways. We want to share three examples.
1. Daniel Senyard, Founder and CEO of Shep Travel, is leading his company in 24–7 operations after having shifted his company’s focus very specifically toward the travel industry’s most important priority — the health and safety of its customer base given rapidly changing travel restrictions. Shep’s browser extension is typically used to capture corporate travel data and provide pop up travel policy notifications on top of consumer travel sites. Working closely with one of Shep’s biggest partners, Flight Centre (one of the largest Travel Management Companies in the world, like Expedia or American Express), Daniel recommended that Shep be repurposed to deliver the latest health and safety messages, informing business travelers about company or country travel restrictions across more than 1,000 different booking sites, from Concur to Airbnb, Delta, and more.
2. Dan Robinson, Founder and CEO of Red 6, is leveraging the leadership skills he developed while serving in the Royal Air Force (RAF) as a fighter pilot of the Tornado F3 combat aircraft. It is worth mentioning that Red 6 has developed an Airborne Tactical Augmented Reality System (A-TARS) that allows fighter pilots — while flying an actual aircraft — to engage with and against synthetic friendly and enemy targets via an Augmented Reality (AR) enabled display in the visor of their helmet (yes, it’s seriously mind-blowing tech). As soon as news of the COVID-19 crisis hit an inflection point on Friday, March 13, 2020, Dan sent an email to his team outlining specific procedures to keep his team healthy and operating effectively while adhering to the company’s core values. He also “rallied the troops” with a call to action. Here’s an excerpt from his email.
“The Coronavirus is all most people will be talking about, reading about, or thinking about for the next 1–12 months. However long it may be, it will be easy for us to be distracted. The single most important thing we can do is focus on the mission of the company, remember what we are building, why we are building it and who we are building it for. No matter how bad the economy may get, the work still must get done.
It would be easy for us to use COVID-19 as an excuse to slack off and take a natural hit in productivity (oh well, yeah…everyone is in the same boat here…COVID-19 is to blame). We must avoid this trap, it is a mentality that will kill us. I want us to see this as an opportunity to extend our lead against the competition. While everyone else chooses to slow down, let’s take this as an opportunity to extend our lead. This is going to require focus, self-motivation, communication and a commitment to your teammates.
There’s the age-old adage (meaningless sound bite) that says “failure is not an option.” I disagree. Failure is an option. In fact, in any fight, failure is the most readily available option for all of us. It’s easy to choose failure. The trick is, not to choose it, not to look for a way out of the fight, but to choose to thrive in adversity. There’s a great book on this called ‘anti-fragile’ if anyone is interested in reading it….
Anyway, gang — Bottom line. No excuses. We need to execute the mission. I need all of you to display leadership. At every level of the business.”
3. Berenice (“Bere”) Giannini, Founder and CEO of eTailPet. While some companies are facing the challenge of a massive loss in business, others are facing the challenge of a massive spike in business. Let’s be clear — both scenarios present serious challenges and require extraordinary leadership to manage. Bere is experiencing a massive surge in business as her software enables independent pet stores to upload and sell their inventory online and deliver the goods via shipping, home delivery or curbside pick up. Bere is surging to increase capacity across every team in her company, working tirelessly, asking for help, and leading her team with conviction. The team’s important work is helping local pet store owners switch from a primarily brick and mortar business model to an online model to deliver pet supplies from coast-to-coast. Bere’s eTailPet solution literally is the difference between “keeping the lights on” and going out of business for these retail pet store owners. We believe so much in her and the mission that we deployed our full-time associate, Jawhara Tariq, to “parachute in” and help Bere full-time during this crisis.
We are honored to have invested in these and so many extraordinary leaders. We need them now more than ever.
Moonshots Capital is a veteran-founded venture capital firm that invests in early-stage startups with extraordinary leaders.
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