In praise of the (self-aware) Maverick
On a flight from Geneva to London, I find myself reflecting on the type of founder profile that I like to work with. They tend not to conform to any classic profile.
In venture land, probably over 50% of investors have an MBA of some description. They tend to be Stanford, MIT or Centrale whizzes with a Harvard or Insead MBA. They were usually president of the Private Equity club, or similar. They were born to greatness :-)
Many of us shy away from such profiles in the entrepreneurs that we back, and I certainly do. We like guys who do not fit the mould, who do not know what they don't know. After all, the bizarre notion that a company of ten people can take on Apple or Google is based on "suspension of disbelief". It takes a special kind of person to spread that special kind of blind faith to those around them.
If I look back at people that impressed me over the last few years (focusing on entrepreneurs I did not back), they would include
- Kristian Segestrale, who tells you with a straight face he's going to be bigger than EA and some come across as credible
- Martin Lorenzon and Daniel Ek, with Daniel underselling with absolute grace and Martin telling me with absolute confidence that the pre-money on his Series A "will be north of €40M"
- Peter Ohnemus, a formidable sales guy with no off switch who has an uncanny ability to make you want to work with him
- Alexander Straub, who has never failed to send me a follow-up mail to convince me to give Truphone a try, every single time we speak
- and of course, Niklas Zennstrom
These guys don't play buy your rules, they can be both likeable and arrogant, both deeply knowledgeable and highly ignorant, brilliant and unnerving. But they definitely share a common trait of maverickness. In VC speak, they are likely to be "hard to manage", "abrasive", "difficult to align". In other words, they are going to be hard work. But they also have that unique spirit that sets them completely apart, entering new markets that they sometimes know almost nothing about with the absolute certainty that they can revolutionize it.
So being a maverick is a virtue I respond to at a very emotional, animal level, and that I appreciate in company founders.
The need for emotional intelligence
As a founder, what you do with your "maverickness" of course, will probably play a bit part in determine how successful you become. If you are unique, driven, somehow exceptional at harnessing a vision, there are also probably of areas when you are going to be terrible or at the very least can be handled much better by others. The trouble is that you may have a tendency to run your company like a benevolent dictatorship and are such a good communicator that not many people can stand in your way. If you are assertive, driven, action-oriented with a dislike for routine, you're not likely to be the good administrator that your company will at some point require.
Which is why we need our mavericks to have a high degree of self awareness and emotional intelligence. Those that can leverage their maverickness into building fantastic organisations and recognise their limits are the ones who can really scale all the way.
Some further thoughts on this:
- Anticipate your fall. "Founder transition" is avoidable if you anticipate it. In most cases, you are unlikely to be the right CEO long-term for the company because the skillset is , but you can be. Take the example of Chris Ahlberg, founder of Spotfire, who created a strong partnership with an experienced exec called Rock Gnatovich on the way to making Spotfire a success. Identify early where you're bad, be ruthless in your self-assessment, and complement yourself early on. If you are fantastic at product vision, setting direction, motivating the team, closing sales and evangelising the product, great. If you're really not into negotiating salary increases, designing long-running workflows or even managing the board don't. Get outstanding, senior help – competency matters too.
- Fill the gaps. Like most brilliant personalities, you're likely to be excellent at some things and absolutely terrible at others. You have to embrace yourself, recognise your weaknesses, even communicate around them. One of the easiest ways to avoid information asymmetry about your own failings is to publicise them. You also have to learn to harness your weaknesses. To paraphrase Aristotle, "being angry is easy, but being angry at the right person, at the right time and with the right intensity is very hard".
- Invite contradiction. This for me is very important, including from a board perspective. Whilst as the maverick leader you are likely to be right about many things and feel that you play the major role in determining the outcome of your company, you are often likely to have a chip on your shoulder that is part of your motivation and may blind you to dissonant advice. Again, if you are that good, you should contradict your natural instinct and ask instead "how will we fail", "where is the chink in our armour" or simply "what can we do better" ?
- Build diversity around you. It's impossible not to be impressed by the plethora of companies started by PayPal alumni (Tesla, YouTube, LinkedIn etc). It's often be said to me that the root of success there was a deliberate and systematic policy of attracting highly varied talent to the company. Maverickness by itself does not a company build. The less obvious qualities of consistency, repeatability and incredible professionalism in a company's operations usually need to be brought in, with the art being to protect the unique alchemy that allows a company to be disruptive, its "disruption ethos" if you like. Many venture disasters stem from "vc running a company into the ground" (founder version) by bringing on expensive corporate types who stifle the company's ability to innovate and execute. More on this in a later post.
- Don't be a hero. I have witnessed that one of the hardest things to do for brilliant founders is to accept failure. Yet in the life of a startup, there are ALWAYS times when your company teeters on the edge, and it is in these defining moments when great companies are made. As Marten Mickos once told me on receiving the Next Gem award, "a diamond is made of carbon, compressed really, really hard". The thing about failure though is that it's not absolute, it builds up over time. If you are trying to take on too much in the face of mounting adversity, are not able to share your concerns and your minor failures, are not able to recognise that building a company is never a solo effort, you might be setting yourself up for a burnout, a major bust-up with your team or your investors, and a terminal failure of your business.
In praise of the Maverick
From an investor standpoint, I will choose the maverick founder over the more sedate kind any time. The primal urge to bu ild something of note, the passion to succeed in the face of adversity are fundamental to me. I know the overhead and tension of dealing with the relationship will be higher; but I consider it's my job to foster an environment of mutual respect and trust where maverickness is allowed to flourish, whilst at the same time the sound foundation for building and scaling a sustainable business is being laid.
In fact, to my mind managing that tension is at the heart of what makes venture capital challenging, interesting and ultimately successful.
A brilliant entry from Ben Horowitz on the preference for founder CEO's : http://bhorowitz.com/2010/04/28/why-we-prefer-founding-ceos/
Fred Wilson on "stepping up" from CEO to Chairman: http://www.avc.com/a_vc/2007/02/when_the_founde.html