The 5 Characteristics of Successful (and Less Successful) Founders
As Slush 2023 wraps up, it sparked numerous conversations around the likelihood of small seed-funded gaming ventures growing into substantial teams within the current investment climate.
In the reflective spirit of December, my thoughts drift to a podcast from earlier this year hosted by Eric Kress featuring Niklas Herriger, an executive coach and angel investor, also a former founder of Gondola.io (acquired by Tilting Point in 2019) who specialises in mentoring the leadership skills of CEOs, CTOs, and other C-level executives during the early stages of growth.
The podcast unfolds an engaging conversation that delves into the challenges aspiring entrepreneurs face, the distinguishing traits of successful founders, and the timeless topic of work-life balance.
Niklas shares some great tips on the qualities to prioritise and mistakes to avoid. Who am I to suggest, but in case you are an aspiring entrepreneur or a lead(er) in an established company planning to reflect on your work ethics on New Year’s Eve while sipping on some bubbly, below are some exceptional points to consider.
And no, there are no pathways leading to instant success. So, if you are looking for a step-by-step guide, you won't find it here.
This summary only provides a glimpse of the podcast's valuable content. To fully grasp the depth of the insights, stories, and references shared by Niklas and Eric, I highly recommend tuning in to the complete podcast through one of the links below.
The Challenges of Startup Growth
What are some common patterns that founders follow as they begin their journeys to launch a startup? Many founders tend to fall into the same traps, sometimes without realising it.
Maintaining focus
Niklas was quick to point out this crucial aspect, and it certainly speaks volumes in the startup world.
Drawing from his experience as a founder and executive coach, he highlights the importance of startups remaining focused on a single, clear purpose.
Fragmented efforts within the team can easily lead to distractions and hinder progress by scattering resources. To overcome this challenge, the key is to adopt a laser-focused approach. This means honing in on a single hypothesis, swiftly generating prototypes for immediate feedback, and meticulously collecting data. Such precision and concentration are like a guiding compass, enhancing a startup's odds of achieving success.
One could mix this with a Lean Startup method but I think Niklas is talking about being deliberate in prototyping as well. Not trying multiple different ideas but rather working on one single idea and finding the best angle to attack it as soon as possible.
Eric, who despite his vast experience in the industry lacks startup experience, is sceptical. He wonders if individuals with an inherently creative, visionary nature, like the typical startup founder profile, have the focus and determination needed to pursue a single-minded goal.
In response, Niklas challenges the notion that startups are solely driven by a single founder. In many instances, there is a division of labour, with one person assuming the visionary role, inspiring and presenting grand ideas, while another person takes on the mantle of an operator who translates the vision into actionable steps. This balanced approach to leadership recognises the need to harmonise creativity with operational efficiency.
Weight Distribution
The discussion then turns to the importance of sharing responsibilities amongst a startup's team. Niklas stresses that, while the founders might initially be expected to manage all aspects of a business, they can end up becoming bottlenecks as the company grows. He says that founders often discover this problem too late and it is difficult to rectify.
Weight distribution is essential to maintain smooth operations and prevent bottlenecks which can impede progress.
This is really a very logical concept. If the investors invested into the company because of the founders design and engineering skills, the fact that these founders would be spending big chunks of their time on administrative work would be a disservice to everyone.
Mastering Human Relationships
This often underestimated skill of building strong human connections, especially among technical founders, presents a significant challenge. Effective leadership extends beyond communication skills; it's about forging genuine bonds with team members. Creating a safe environment where individuals can drop their defences and harness their full potential is essential. Niklas highlights the power of fostering connections and enabling collaborative teamwork.
This perspective doesn't entirely align with Eric's convictions. He questions whether hierarchical, command-and-control models, often referred to as the “iron fist”, are suitable for leadership in startups. The discussion references the leadership styles of Mark Pincus and Steve Jobs.
Niklas doesn't deny the existence of fear-driven cultures within some larger corporations. But he draws a line between such corporate behemoths and the more agile, growing startups. He also stresses that excessive politicking can hinder business productivity, advocating for transparent and efficient communication, regardless of the company's size or developmental stage.
While hierarchy can succeed in certain cases, Niklas personally favours a more collaborative and inclusive approach, especially during a company's early stages. He emphasises that people are diverse and have fundamental needs, including safety, recognition, and a sense of belonging. By addressing these basic needs, leaders can cultivate a more productive and creative work environment.
The Key Characteristics of Successful and Less Successful Founders
Beyond the standard attributes like innovation and resilience, let’s drill into the often-overlooked qualities that distinguish founders who truly excel:
Confidence: it is a powerful thing. When you believe in your ideas and yourself, you inspire others. Self-assurance allows you to persevere in your vision even when others are doubtful. A confident leader can navigate through the uncertainty of the ever-changing world of entrepreneurship. A leader who constantly asks everyone else to make a decision on the other hand can create chaos.
Humility: It's all about finding the right balance between humility and confidence. Is humility a sign of weakness? Nick says no. He dispels the myth that confidence and humbleness cannot coexist. Humility keeps us from falling into the "I know it all" trap. It allows us to learn, grow, take on new perspectives, question assumptions, and be open to honest feedback. It fosters an environment in which founders can adapt and evolve, leading to success over the long term. Some investors favor “paranoid” founders. Those who prepare for all cases and are never just cruising. Perhaps being paranoid is a way to say humble.
Tenacity: That unwavering resolve which keeps us going despite countless obstacles. Founders underestimate the time and challenges of starting a business. Niklas stresses that perseverance in the face of adversity will lead to ultimate success. Lets be honest, this is an absolute must for startup founders whose job is a rollercoaster with more downs than ups.
Motivation: Money can be motivating, but real founders are motivated by more than dollars. The burning desire to solve problems is what drives them non-stop and around the clock. It is very important for the founders to be truthful to themselves why they are doing this. Financial gains is a challenging goal because more often than not, startups fail. And because without exception, founders earn less than they would at a corporation - unless of course they hit the startup jackpot aka. the exit.
Dealing with conflict: Conflicts are an inevitable part of any startup, whether they're between co-founders, board members, investors, team members, customers, etc. It is important to be able to manage and resolve conflicts for a company's culture and relationships to remain healthy. Something that is very hard when your entire lives evolve around the company you’ve set up and are running.
On the opposite side of the spectrum,
What are the characteristics of founders who struggle to scale a company?
Attitude and Arrogance: A destructive trait among leaders is arrogance and the infamous "I-know-it-all" mentality. This approach, coupled with a dismissive attitude towards others, can pave the way to failure. Remember what Niklas said about humility…
Micromanagement: Micromanagers have their hands in every aspect of the business, despite appearing to delegate tasks. This micromanaging tendency can strip away the human touch and leave team members disengaged. More importantly, micromanagers create bottlenecks. While in the beginning they will be executing against their vision, as the company scales, they will have teams on teams asking the founder what they would like to see next, rather than executing themselves against set product strategy and roadmap.
Lack of Transparency: When leaders hide information and avoid transparency, they can cause rifts in the team. The absence of context can lead to demotivation, speculation and a general lack of trust in a business. And trust is imperative in startups, whose flight, from the eyes of employee, can be cut short at any time. Trust is also imperative when bringing in top talent. They need to trust that the founders will deliver.
A Lack of Domain Expertise: Entering unfamiliar territory without having the necessary domain knowledge is a dangerous venture. If you choose projects solely based on trends, rather than your passion and expertise, it can lead to failure. While a good amount of distance makes sense as it causes you to be less emotional. Too much distance makes you detached from the target audience and key customers.
How to achieve work-life balance in the world of startups
"This old saying, 'it's a marathon, not a sprint,' is true. And startups usually start with nothing, right? There's no money, there's no office, no team, no product, no marketing, no strategy. Just, it's just nothing. So getting this off the ground, even somewhere, takes huge commitment and sacrifice." - Niklas
As discussed in Kress’s Corner, achieving a balance between professional and personal lives can be a significant challenge for startups. The demands of running a business can consume many founders, leaving little room for much else.
Niklas understands the relentless work ethic of entrepreneurs. It's not only about managing your time but also about managing your attention and keeping your focus in the right place. And it is not healthy to be physically present in one spot while your mind is still at work.
Startups usually start from scratch, with barely any infrastructure and very limited resources. Founders are expected to be fully immersed in their work, even during what should be their downtime. The challenge arises when founders tie their identity and self-worth exclusively to their work. Neglecting personal well-being and relationships can lead to burnout and decreased performance.
The podcast's discussion touched on whether extreme dedication and sacrifice are prerequisites for entrepreneurial success. Niklas emphasises that success can be achieved while maintaining a balance, caring for oneself, and nurturing relationships.
In conclusion, the debate over work-life balance in the startup world is undoubtedly challenging. While determination and commitment are crucial, it's equally important to understand that sustainability is a key factor in long-term success. Founders should strive to maintain their drive without sacrificing their well-being or personal lives, ultimately achieving a more balanced and fulfilling entrepreneurial journey. Eric may have a differing viewpoint, but I will side with Niklas on this one and try to be optimistic that the path to success doesn't have to be one of extremes; it can be a harmonious blend of dedication and personal well-being.
