Starting and growing a thriving company is not just about having a great idea. The founders behind a startup are the driving force that brings the idea to life and turns it into a viable business. And we believe that the right founder can make all the difference in a startup’s trajectory. We strive to find individuals who possess the personal qualities, skills, and experience needed to navigate the challenges of building and scaling an enduring company. Because without the right people at the helm, even the most innovative and promising ideas may never come to fruition.
Not so long ago, we shared what we at Eleven look for whenever we evaluate an investment opportunity. Remember about the intersection of the market, the team, and our contribution as an investor? In the next paragraphs, however, we focus on what we call “the founder profile” – the personal qualities that are critically important to us and reveal if there is a match between us and a founding team.
1. We begin with ambition. If founders don’t have it, they will hardly develop it. They are either playing to win, or playing just to be there. Big and successful companies get built by people with endless ambition. What drives the ambitions is a different story but it has to be present.
2. The second quality is curiosity – being constantly interested in what’s ahead and asking “Do I know the answers or not?”. Then it is all about assuming and testing one’s own assumptions over and over again. By doing so, founders learn from everybody around them, which helps them develop a much stronger team and a much stronger company.
3. Another important aspect is leadership. Being a good people manager is essential and increases the chances of success. Founders are likely to evolve in C-level roles and build teams around them, so if they have worked in fast moving teams or have had to manage and help people grow, they are better prepared to create the right setup in their own company.
4. Honesty and integrity. Ambition and ingenuity can be a disastrous combination without integrity. It is normal for the plans not to work out, it is normal to not have all the answers. What is not okay, is to try to hide, to sweep it under the rug, to lie, and to misrepresent – because this way we cannot go through the difficulties as a team. It is essential that founders have the right dose of integrity with their investors and within their team. And the two are connected. If a person tends to lack integrity, it is in all aspects of their life.
5. Another quality which is crucial but cannot be seen from the get-go is discipline. So that founders don’t jump from one thing to another but rather have a disciplined mind and persistence in testing out things before saying “I give up”. Many entrepreneurs have great ideas and then they meander. But without discipline to really follow through, they can never see what was wrong. Was it the strategy? Was it the execution? Or maybe something else?
6. Closely related to persistence is also tenacity and perseverance. We like founders who don’t balk at the first obstacle, who never give up, who bootstrap when there’s no cash and who continue fighting against all odds. We are not fans of the fail fast mantra. Iterate fast, but not fail easily. As a friend of ours used to say: “The best founders are like cockroaches, you can never kill them”.
7. Another aspect, which really matters to us is how the founders look at their most important constituents (after their employees) – their customers. Are they compassionate, caring deeply, and trying to understand them? Or do they perceive their customers as somebody who owes them money because of the greatness of the work they do? In the first case, they work for the customers – it is their company but they are a public servant to their customers. In the second, they are the emperor and the customers are the minions who have to serve them and their grand vision. It might sound small, but it is a big philosophical difference.
8. Coachability and being receptive to feedback – because one might be resilient as a 500 year-old three but if they are not seeing the signs that the universe is giving them, they will get beaten down by the forces of nature. So it is important for founders to be resilient but it is also important to learn and be receptive to feedback – so that at some point they find the right path and adjust.
9. None of the above would be relevant without commitment. Founders cannot have a successful startup with a half-hearted effort, as a side gig. They should have skin in the game, which in the early days means that they are willing to go all in and risk their secure high-paying job and personal savings. They should devote essentially 100% of their working hours to growing their “baby”. This means late hours and answering emails from clients during the weekend to begin with. But it can also mean waking up with the business in mind and going to bed dreaming of it again.
10. And last but not least – having the right purpose and values. The answer to “why am I building this company” question should be starting from a strong sense of mission and focusing on the right things. To get rich is a wrong incentive. Тhere is nothing bad about making money but it should not be the primary objective of building a company.
In conclusion, investing in a startup is not just about analyzing numbers and data, it’s about understanding the people behind the company. At Eleven, we believe that the founder’s personality is one of the most important factors in determining the company’s trajectory. Ultimately, we invest in people, not just ideas, and we strive to find founders who share our values and vision for the future.