Learnings From a Decade Investing In These Types of Leaders
We’ve sent hundreds of millions of dollars to startup bank accounts but none of those have gone to teams which don’t have at least one founder we consider to be ‘mission-driven.’ How do I define that term? Loosely, someone who has a personal connection to the problem they’re trying to solve. The tie is sometimes very intimate (as an individual, familial, and so on). Or linked to what they’ve studied (academic) or worked on previously (vocational). They’ve often been thinking about it deeply ahead of even understanding whether it could be a startup or would be an attractive, valuable issue to address. Not everyone on the founding team needs to fit this criteria but we do try to understand the different motivations at an individual level.
But I’ll tell you, my experience suggests that mission-driven founders also have some hurdles to becoming great leaders and CEOs. Their challenges are not exclusively felt by people with their motivational DNA, but 10 years of venture investing, seeing thousands and thousands of startups, does suggest, at least anecdotally, that mission-driven founders more often experience the following challenges:
- Assumption That Everyone ‘Understands’ The Problem Like You Do
When a founder has been thinking about a problem space for a very long time they sometimes lose the ‘beginner’s mind.’ They assume that everyone else sees the issue in the same way, with the same amount of depth and can make leaps of logic on their own. But this isn’t true! Most people the founder encounters will have no idea, or just surface level understanding! And then even when given a short background, won’t make all the connections between the problem at hand, the urgency and why the startup is necessary in order to solve.
So the mission-driven CEO sometimes gets frustrated that the other person ‘just doesn’t get it’ or feels like their assessment of the problem’s severity and importance is being challenged/disregarded. Or the other person will respond enthusiastically and the founder assumes that they understand everything about it — as if there was some mind meld — and then disengages, assuming the other party is now bought in, or knows what to do next. Not so!
(I’m contrasting this with founders who have more recently or opportunistically come to a problem space. Curiously they are actually often better at explaining the nearterm roadmap and rationale for funding than their peers. Because they just went through that introspection themselves!)
The advice I give mission-driven founders in this area are: don’t assume everyone understands or cares as much as you do. Lead people through the logic behind your statements, not just your conclusions. And that over-communication will be required ongoing, more than you’d expect, because your team will be a set of people with different types of exposure or interest in the core fundamental problem you’re solving.
2. Too Reliant Upon Belief, Not Enough Trust In Data
Mission-driven founders are more predisposed to ‘sticking with the original plan’ than more opportunistic leaders. Their conviction stems from purity of conviction and belief that deviating from the path holds too much risk in compromising the vision. Or that the ‘data’ just shows the current state of the world and they have the ability to change the world to get pulled towards them, versus having to accommodate reality.
These are amazing and durable traits to hold as a CEO. They inspire me to also believe you can change the world. But almost no one’s original plan ends up being the right one. You can be correct about the destination and flexible with how you get there.
Fortunately these biases aren’t fatal if you can recognize your blindspots, steelman your own arguments and/or trust other voices on your team to give you a read of the data. Someone who suggests the current plan won’t work isn’t necessarily a ‘hater,’ they may just be looking at the available information with a POV with a less emotionally pre-commited perspective!
3. Hire Too Slowly Because of Mission Purity Tests
This one might be a little controversial, but I don’t believe it’s important for everyone at your company to care about the problem being solved for the same reasons or to the same degree of urgency. Screen out people who are dismissive, brutally apathetic or, even worse, cynical about what you are building (strangely enough, folks like this apply, especially when a company becomes ‘hot’), but not everyone, in every function brings the same motivations. Sometimes it’s more about who they are working with and the work they are doing. For example, the analyst who loves big data sets whether it’s CPG or health care. The software engineer who know several of the team members already and wants to work with them again. The Head of Finance who sees each new industry as a new problem to learn and solve. None of these folks may share the ‘heart on the sleeve’ mission alignment of the founder(s). That’s fine!
So overall there’s problem some roles where mission-driven really matter. And perhaps, especially early at the company, if the *only* mission-driven person at the company is one of the founders, you’re setting yourself up for a tough culture building exercise, but I’d suggest to not over-filter and consider this trait just one of what you evaluate in a candidate.
When we back a founder we never assume they’re a fully formed version of themselves — whether it’s their first company or their fifth! Because of this, we’re always happy to sign up for working with them on identifying where their strengths have trade-offs or tendencies that can be balanced out. We might technically be buying some shares in an LLC but what we’re really doing is helping people come together to build effectively together.