Which Type of Founder Are You?
Entrepreneurship is attempted by many but mastered by few. Only a rare talent possesses the unwavering optimism and fiery resolve to build not just any company, but a company that lasts. My mission as a VC is to find and nurture that talent and demolish the challenges impeding their success. But, what if the challenges involve the founder him- or herself?
Years ago, VCs sought perfectly balanced CEOs. They were expected to execute like experts, hire and manage well, and sell like a champion. Then markets fragmented and verticalized, particularly within the enterprise. The growth of online review sites and easy product trials through SaaS provided customers with previously unheard-of access to product information. Customers became empowered to make informed purchase decisions based on already-built product substance, not vapor.
As a result, product quality and customer experience blossomed. To meet the new business realities, company structures needed to change, beginning with their leaders. Product/market fit replaced salesmanship as the most important entrepreneurial attribute. While all successful technology founders today must fit their product and market and have an unwavering resolve toward achieving their mission, I've found that they also fully embody at least one of the following personas: the visionary, the operator and the connector.
The Visionary: Category creators
Visionaries create entirely new products and markets in areas where technologies don't exist or business transactions haven't yet scaled in mass volumes. In hindsight, observers trace the dots backward, but only visionaries plan them forward.
Visionary CEOs possess deep domain expertise, enabling them to anticipate product evolutions generations before their time. These CEOs, like Apple under Steve Jobs and SpaceX and Tesla under Elon Musk, define the market for their customers, not the other way around. They create entirely new markets and ignite the discontinuous innovation to enable them.
Airbnb, Uber and Houzz are consumer businesses created by visionaries. While some enterprise examples exist (such as Drew Houston at Dropbox and Mohit Aron at Cohesity, a company I've invested in), there are fewer of them due to the inherent challenges in changing enterprise behavior.
Visionary founders possess the deep intuition and unconscious intelligence to anticipate long-term market needs before the market even begins to bloom. Within the company, product and market insight from the companies' center of gravity and should receive disproportionate investment of resources. It's critical that board members not ask visionaries to be something they're not. Vision is a powerful tool that rallies employees and leads customers into still-unproven, nascent markets. It shouldn't be diluted with futile attempts to morph these leaders into day-to-day operators. Instead, the leadership team should be rounded out with execution-oriented lieutenants capable of bringing the founder's vision to fruition.
The Operator: Dissolvers of customer pain
It doesn't matter whether an operator's company is first to market. Customer-centric operators quickly outpace competitors and dominate markets with their laser focus on execution excellence. When Manny Medina created Outreach (full disclosure: I'm an investor), the company already had four competitors. It didn't matter. He obliterated the competition. His weapons: total and utter customer-centricity and absolute operational excellence.
Operators like Medina hustle on behalf of their customers. They engage in detailed conversations with customers, dissecting their needs in depth. Customer insights and pain points inform product road maps, often delivered to customers within weeks. Operators hold themselves accountable to deadlines and achieve spectacular results on behalf of their customers. They infuse their organizations with an unparalleled level of hustle.
Operators tend to thrive in enterprise markets, utilizing data for decision-making purposes and running their businesses with surgical precision. They also tend to measure and reward results over effort. Operators tend to hire other operators, which keeps their machine humming smoothly, but it's also important for them to recruit visionary executives to support the long-term road map. This union creates a magical management marriage in which the organization's left and right brains work in harmony to deliver exceptional results.
The Connector: Unifying complex ecosystems
Connectors like Salesforce's Marc Benioff are magnetic leaders who enjoy industry-wide appeal and strong employer brands. People want to work with them and for them.
Connectors are exceptional at conceptualizing and forging relationships among the disparate nodes within their complex ecosystems. As such, they shine at business development, but not in the old school, schmoozy sort of way. Instead, they lead with relationships and possess a deep level of empathy for their customers, their employees and their partners.
Connectors often lead companies during periods of high-growth and rapid scaling. Their powerful combination of charisma and EQ enable them to recognize and attract A-plus talent and build a winning culture. People who work for connectors are engaged, focused and loyal.
Their most obvious management weakness stems from empathy: They desire to be liked by all. As such, they sometimes can be slow to take tough actions on underperforming teammates. When those actions do take place, they're handled in such a compassionate and thoughtful way that they manage to engender even deeper loyalty.
Why types matter
Because early stage investors like myself often engage with companies before the first products ever launch (and sometimes before they're even built), founders' personal qualities matter greatly to us. While great founders can be as varied as the businesses they create, I've found with tremendous consistency that they tend to embody at least one of these personas, and sometimes two. While some of these qualities may have alientated VCs years ago, they are absolute magnets for me today -- features worth celebrating, not bugs worth fixing.
Identifying and categorizing those attributes isn't just useful in my talent quest for entrepreneurial stars; more importantly, it facilitates leaders' self-reflection of their superpowers so they feel comfortable intentionally over-indexing on their strengths and hiring around their gaps. It helps surface the best version of themselves -- and their companies. After that, I just need to get out of their way and let them shine.