The founding teams at Lightspeed Extreme Entrepreneurs got to hear from seasoned venture capitalist Ravi Mhatre, in a session I moderated.
Ravi is the founding partner at Lightspeed and has been in the industry for 24 years. Through multiple investments – Nutanix, App Dynamics, Mulesoft, Rubric, OYO to name a few – Ravi has very closely seen the transformation of founders as their companies scale.
We discussed successful traits of founders, including tactical ways to figure out your own defining traits, and gathered takeaways from company-specific case studies.
Here are a few edited excerpts from the interaction:
Constant need to reinvent yourself
The journey of building a great business is a hard one. Founders constantly need to reinvent themselves as the company scales.
“As you grow from a founder to an entrepreneur to a CEO and then to a leader, the things that will be required of you will be radically different and each of these transitions will be nothing like the previous one.”
Early on in a startup, founders may partner with friends or former colleagues, and the atmosphere is quite collegial. As the company scales, certain founders or early employees may not scale as managers and leaders.
Not all founding CEOs make the transition to being able to have the hard conversation with a co-founder or an early employee and have them move into other roles to make way for senior talent that can handle the scale better.
It is extremely important for founders to learn this ability, hold people accountable and have these hard conversations.
Founders can also learn to become better leaders and communicators through executive coaching and mentorship. They can work with their investors to identify good executive coaches.
Founder Traits that are consistent from start-up to scale
As Ravi looked back, he observed three quintessential qualities (that are consistent across all stages of the startup) among founders who have walked through the fire. He uses these as filters while evaluating a founder to partner with.
- Hungry learners
People who tend to scale and be successful are hungry and adaptive learners. The mindset with which they approach things is- “I definitely don’t have all the answers but I’m not the person who thinks the answers have to be given.” These learners are consciously and constantly on a look out for as much new information as possible to inform their view – be it through mentors, network, books or blogs.
- Unparalleled motivation
People who make it have the extremely high motivation and drive to succeed. This is critical as entrepreneurship is a difficult journey where founders will be tested very frequently.
Ravi shared that with some of the great companies he invested in, there were moments when the entire proposition was in question. But in moments like these, motivation elevates you and everybody around you.
You’re willing to stick and see it all the way through. Aspirational goal setting is key so that employees can perform at their full potential.
- Articulation of vision
The third quality is present in the core DNA of the founding team – the ability to articulate the WHY in a clear and compelling way; why are you willing to take the risk of building the company, why you think the problem matters.
For investors, this aspect is critical because if someone can do that well, then it is likely that he/she will be able to sell it to an experienced head of sales and/or head of engineering while hiring.
- Talent Magnets
A fourth must have quality is to hire talent better than you and not be fearful of doing that.
Patterns of Success Cluster Much More Tightly than Patterns of Failure
In Ravi’s experience, there are certain ways in which successful companies tend to operate. To name a few: is everyone in the company aligned to the vision, are there very clear standards of accountability, do the people leading various teams have the skills to fulfil their responsibilities and are you as a leader constantly assessing and re-assessing calibre of the management team as the company grows.
On the other hand, points of failure are not clearly defined or timed. Failures can occur anywhere along the way and need not follow a pattern across companies. To give an example, anyone in engineering or sales or product can turn out to be incapable of fulfilling the role which could create a failure scenario for the company.
History doesn’t repeat exactly; each company will have its own story. What is essential is to learn to recognize these patterns, not act on them blindly but adapt ways that are specific to your company.
Find your Superpower
Not everyone is great at everything but as you go through life, you realise there are certain qualities that you can fall back on in order to win.
“To identify these qualities or superpowers, ask yourself – who you are as a person, what are your superpowers, what has made you win in various situations you’ve faced till now”.
Ravi also shared that for founders to identify their superpowers or development areas, soliciting feedback from investors is not the best way. It becomes difficult to let your guards down and be completely vulnerable in investor- founder relationships.
The feedback that is most valuable is the one that is critical but constructive, and is from people you trust will not undermine you as a result of it. Identifying these traits requires founders to be on a journey of continuous self-assessment, and have a mindset that being vulnerable is absolutely okay.
The article has been co-authored by Dev Khare and Abhivyakti.