This post is written by Rob and posted on the Monster Venture Partners site, but thought it would be appropriate to post here as well as finding the right person to run the domain business with our partner is critical to success. We have found that by hiring a great person and having them focus on the enterprise while assisting to expand vision (and of course fund the start-up costs) - we can develop a beta version of a business very quickly.
What I Look for in a Startup CEO by Rob Monster
With 18 ventures backed in the last 12 months, one would think that the rate-limiting factor for backing new startups is financial capital. In actual reality, this is not the case. A big idea, executed on a category-defining domain name, led by a stage-appropriate CEO, makes for a compelling early stage investment opportunity for which capital is usually available. The true rate-limiting factor for backing more startups is finding the leadership talent. And by leadership, first and foremost, I am talking about the CEO.
So, what do I look for in a startup CEO?
· Passionate, confident, tenacious, and goal-oriented. Passion, enthusiasm and confidence are highly contagious. You can only fake these things for a while. They love their work, and are driven to succeed, not just on a single venture, but have larger ambitions. They believe God put them on this earth with a purpose – even if they don’t quite know what that purpose happens to be.
· Genuine. A large part of genuine leadership comes from having character. Character comes from proving to yourself that you know who you are, what you are good at, what you enjoy, and what matters to you. The most effective leaders I have met are guided by a set of core values and principles. They know the difference between right and wrong, fair and unfair, and can navigate the gray areas in between.
· Adaptable. In short, we want to work with people who understand that “failure is not an option”. When results are not in line with expectations, a great CEO will figure out what is not working and adapt. This is often not just a function of “working harder”. It is often a function of listening to stakeholders — customers, investors, advisors, and employees – and then adapting in response to the data.
· Intelligent. CEOs need sufficient raw intellect so they can learn what they don’t know. Ideally, the CEO has domain expertise and can quickly formulate a vision for the company that has the potential of carving out a profitable niche that taps into a multi-billion dollar addressable market. To the extent that a CEO lacks domain expertise, the CEO needs to be able to recruit into his or her blind spots in order to be able to focus on areas of personal strength, while learning on the job.
· Ecosystem thinker: Monster Venture Partners is practicing a style of investing that I call “Ecosystem Investing”. It is different than Keiretsu investing in that the companies we back share a common architecture which extends across the core portfolio. The full scale of this common architecture is not yet fully apparent to the casual observer but the synergies are real and the consumer will be a primary beneficiary of a web experience is seamless. Sooner or later, the CEOs we back embrace this common architecture, often extending it.
· Demonstrates Integrity: Sooner or later, most people figure this out. Integrity is price of entry for any leader. An amazing thing happens if you focus on working with people that have high integrity. Everything becomes frictionless. Information is shared openly. Interests are aligned. Partnerships are built to last rather than for expediency. A CEO without integrity is a ticking time-bomb. It is like a deal with the devil. It rarely works out in the end.
· Tolerant, open-minded and prepared to deviate from convention. The crowd is not always right. The minority of today may be an early adopter, trendsetter or taste-maker. The kind of CEO we like to hire suspends judgment and instead forms a “working hypothesis”. Jean Ibrahim, an early boss and mentor at P&G taught me the principles of great consumer research. When analyzing consumer data, Jean would often tell me “first search for truth … and then use the data to explain truth.” Word to live by from Brother Ibrahim.
· Global-minded: Most of the opportunities we are interested in pursuing have a global component – whether it means global sourcing of inputs, or global distribution of products and services. A CEO may not have had global operating experience, but needs to be open to the idea and prepared to recalibrate how they develop products, how they hire, and how they go to market.
· Wired for productivity. Technology is a huge productivity booster. Blackberry, Skype, LinkedIn, Intelligent voicemail are tools for getting more done in less time. Most of our CEOs know what is in their inbox and process the important ones by the end of the day.
· Able to attract and retain talent. I have long believed that A-players hire A-players whereas B-players hire C-players. The first 20 people you hire are largely determinant of whether you win or lose. So, if you pick a B-player CEO, they will stack the team with mediocrity and you will lose. This is why most incubators fail. They spread the talent thin and too often settle for mediocre leadership. The results are entirely predictable if a course correction is not made early enough.
· Have a supportive home life. It helps to have a supportive partner and family. I read recently that a man’s most important job in life is to marry a good woman. Hallelujah. If you are married and want to see if you have a good spouse, do a startup. When the chips are down, you’ll get a pretty good sense. On the flipside, I strongly encourage married CEOs to make time for regular dates, and get-aways. In line with that directive, our CEOs also know that I am happy to pinch hit for them while they are off-grid, which is a primary reason why I often take the role of Chairman.
· Ask for help. Key contracts, key hires, and other key decisions are all good times to ask for advice. Most times, the advice comes in form of a suggestion, a document, an introduction, an anecdote or a (wee-hour) email. There are times when I am sure about something at which point, I will be emphatic on the direction I think a CEO should take. This is not the norm. Ultimately, the CEO is empowered to make his or her own decision. However, the CEO who ignores emphatic device, should explain the logic, share the data, or be right!
If you know of a great CEO, who is here to change the world, send them our way. We welcome the opportunity to match great leadership talent with great opportunities to reinvent entire industries.