There is no single recipe for a successful founder or a successful founding team. But there are ingredients that make for more successful founders and teams. I scraped through the research and conducted my own surveys and interviews to arrive at 13 team attributes that predict startup success.
Why doesn’t this matter? For one, no one person has all these attributes, and your success as a founder isn’t as predictable as an article on “13 Traits That Really Matter” might lead you to believe. Starting a company is controlled chaos with a thousand factors at play. Secondly, there’s not a lot you can do about some of these traits. Sure, you can work on growing as a person — but, for some of these qualities, either you have it or you don’t.
Why does this matter? Well, if you’re a founder maybe you want to be aware of your strong and weak areas. More practically, maybe you want to choose a co-founder or design your executive team in a way that balances out your own qualities and skills. It’s not so important what this list tells you as it is what you do about it. And, if you’re an investor, this list could help you “think about what you’re thinking about.”
What I Set Out to Solve
When I first began my journey of coaching startups, I thought that there was also a huge opportunity to serve their upstream investors. I saw how PE firms ran a diligence on their target’s management team and thought “wouldn’t it be valuable for VCs to have an approach to do the same?”
My “aha!” moment led me down a path of scraping through industry data, conducting interviews with Ivy-league researchers and psychologists, and doing my own surveys and assessments. I spent months putting together a great structure of the team qualities that predict startup success and even how to measure and assess them in individuals. The problem? Venture doesn’t quite work that way.
I won’t get into it here, but one big hurdle is that the idea of interviewing and assessing founders creates too much friction in the investment operating model. Venture decisions are made quickly and at scale. Another issue is that most investors feel like they are already good at sussing out strong talent — even that doing so is their strategic competency. Which makes sense:
Image by Jason R. Waller
So, even though VCs wouldn’t readily find value in the model, I had built something which I hadn’t seen anywhere else. Something simple, elegant, and backed by research to get just a little closer to that question of “what makes a good founder?”
The Compass Model of Founder Traits
The 13 traits that connect to startup success I’ve dubbed the Compass Model. Leaning on my background in consulting and econometrics, this model was built through data and research from a number of sources:
Input from researchers and organizational psychologists at Harvard, Stanford, Yale
Interviews with multiple VCs and investors on diligence criteria and pain points (n = 16)
Industry research on more general traits for leadership and management effectiveness, such as Google’s Project Oxygen
Baseline assessments of founders across industries and geographies (n = 22)
Here’s what it ended up looking like:
Image by Jason R. Waller
There are 13 traits across 5 clusters of intrinsics, expertise, behaviors, skills, and integration, which we’ll go into in depth later. These 13 qualities also map back to 3 categories of aptitudes, abilities, and alignment.
Aptitudes are simply what I’ve named these traits that are innate, closely tied to personality. The five-factor model of personality informed a lot of this research, as did organizational and behavioral psychology theories on fluid intelligence, resilience, locus on control, and more. This is the stuff that’s hard to change, slow to grow, and highly individual.
Abilities are skills and expertise necessary to succeed in entrepreneurship. At early stages, this is focused on how well you can build a product or service offering. At later stages, this is focused on how you can take that to market and scale over time. A lot of investor and operator input helped to inform what really, truly matters here. This is the stuff that can be learned over time and is seen as a balance of experience and ability in the team.
Alignment is how it all comes together. Alignment between aptitudes is a matching function. Will one founder who is highly ambitious work well with another who is highly collaborative? How do the individuals work together and create constructive conflict? Alignment between abilities is a maximization function. If the founder doesn’t have the domain knowledge, who does? If the CFO doesn’t have marketing and sales expertise, who does?
With that context as a backdrop, let’s take a quick look at each of the 13 traits one-by-one.
Intrinsics
“Intrinsics” are the aptitudes that matter most for strategy-setting and building an early-stage startup. They set the course and determine how effectively and efficiently the team can move from problem-solution fit to product-market fit.
1. Ambition
Do you have an earnest desire and energy for high achievement and success? Founders with high levels of ambition are often called “passionate” or even “obsessed.” Breakthrough founders have something that drives them a bit crazy in pursuing their dream. They have an enthusiasm that borders on compulsion to get their product to market.
2. Perseverance
Do you show a steady persistence toward a goal, in spite of difficulties and obstacles? Startup life is filled with setbacks and closed doors. Great founders and founding teams lean into the failure as an opportunity and show great resilience and grit in the face of obstacles. They tap into their passion, their ambition, to dust themselves off and find the next gear.
3. Intellect
Do you exhibit high fluid intelligence and creativity — an ability for conceptual problem solving and logic? If you want to beat the competition, you have to be smart. Amazing entrepreneurs here are quick to see patterns and test high in their ability for problem solving and logical thinking. IQ is not a predictor of success, and neither is education. Having strong critical thinking and creativity chops is.
4. Adaptability
Do you display high openness, humility, and coachability, with a willingness to change perspective? Although great founders are driven and passionate, they leverage their intellect and fluid intelligence to read the signs and know when to make a pivot. They are ambitious, not arrogant, and seek out advice when necessary. They know that direction matters as much as motion.
Expertise
The “expertise” cluster holds those abilities that help the founding team build a minimum viable product and find early traction in the market. It depends on technical competence and market or industry knowledge.
5. Domain knowledge
How much directly relevant expertise in the target market and industry do you have? Someone on the team needs to have a deep understanding of the market. You need to understand the customer whose pain you’re offering to take away or for whom you’re creating value. It’s not enough to have this talent sitting with an advisor — it needs to be embedded in the team, in the daily development of user features and design decisions.
6. Technical ability
How much expertise related to building and maintaining the product do you bring to the table? Sometimes the founders have technical ability, and this marginally correlates to stronger predictors of success. But it is marginal. Founder or not, at least someone in the core team needs to know how to build and repair the product, whether it’s software, hardware, retail, or service. Outsourcing will only go so far, and it needs to be led and managed by someone on the team who knows where to point the resources.
Behaviors
“Behaviors” are the aptitudes that really matter when growing the company in later stages, typically after a Series A or B round. They center on the ability of people with different ideas to work well together and drive tactically toward a shared outcome.
7. Execution
Do you have a bias to action with a prioritized focus on what needs to be done first? Good ideas are a dime a dozen — what matters is getting stuff done. Founding teams need to be able to will their ideas into existence. It takes an eagerness to jump in and get started, knowing that you’ll learn more by doing and failing than by thinking and reflecting. It takes a realization that action is different than motion, and real “execution” means putting all efforts into the things that actually create value (and saying “no” to the noise).
8. Collaboration
Do you show an ability to work well with people and still communicate your own points of view? It’s a bit easier when the “company” is four sitting people around a table. But as you grow, how will you work with new hires, direct reports, virtual assistants, existing investors, interested investors, strategic advisors, board members, external experts, channel partners, customers, service vendors, suppliers, etc., etc.? The game becomes more “who” than “what” over time. Are you able to “play nice” and walk that fine line of soliciting input, while still sharing your own opinions and standing up for what you believe?
9. Accountability
Do you display a strong ownership of results and honestly share them with others? Breakthrough founders have high expectations not just of themselves, but also of their team. What’s more, they’re honest on where they are and on where they’re falling short and need help. They take ownership of the team’s failures and don’t hide behind padded projections or hide bad numbers. Conversely, successes are shared with the team and credit and praise is quickly passed on. “Accountability” here is closely tied with “integrity.”
Skills
The cluster of “skills” can seem broad, but it’s really on three core abilities that team members must show up with to grow and scale the company. In contrast with earlier abilities, these are more people-focused than product-focused, built around internal, upstream, and downstream dependencies.
10. People management
How many skills related to leadership, management, and administration do you bring? Some of these “leadership” skills can be learned on the job and, yes, innate ability comes into play here. But when it comes to running a 100-person org, there’s no substitute for having run a 100-person org before. Hire in relevant experience when possible, and fill the gaps with great coaches, mentors, and learning programs.
11. Marketing and sales
How much knowledge related to marketing and sales functions do you have? Marketing matters: nobody buys something they can’t see. Get the best A-player marketer you can and know that, if your product is half of what you hope, they’ll pay back their salary in a quarter. I put business development here, too. Sales matters: nobody buys something they can’t see value in. Early on, marketing and sales might be one person’s job or everyone’s job — but once you have traction, invest in someone who lives and breathes selling.
12. Business operations
How much knowledge related to internal and external operations do you have? This is a catch-all for a lot of the day-to-day and week-to-week activities that keep the machine running. Operations comes last “abilities” because it’s the easiest to cross-load, train up, or hire in. But as a final assessment of what makes founding teams successful as they scale, there has to be a green check mark by: account management, customer support, site operations, business partnerships, vendor management, office management, and fundraising.
Integration
“Integration” is about bringing it all together. Every individual is different just like every team is different, but what matters is how everyone gels. Aptitudes and personalities must balance out and work in harmony. Abilities and skills must come together and leave no gaps in critical areas.
13. Team alignment
How well does the overall team integrate and work together? Check on accountability: are shared goals strongly held but with divergent approaches that can inject fresh creativity in the process? Check on motivation: are values homogenous and agreed on in the team, leading to high buy-in? Check on trust: is there a willingness to be vulnerable and even be wrong, inviting the best of the team to the table?
Bringing It All Together
To recap, the Compass Model is built around five clusters of:
Intrinsics, those innate aptitudes that fuel building the dream
Expertise, the abilities and expertise necessary for the early stage
Behaviors, aptitudes for growing and scaling the company
Skills, the abilities and experience to direct that growth
And integration, how the team comes together
Image by Jason R. Waller
The 13 traits inside these clusters are helpful in guiding the thinking about what the team has already versus what the team needs to balance or what the team needs more of to be successful. But I want to reiterate: every team is different and there are more factors to consider than just 13 aptitudes and abilities.
That said, I’ve seen a lot of lists for “what to look for in a founding team” or “what makes founders successful.” I have yet to see a model that adds something additional. The Compass Model is comprehensive by design. I also have yet to see something more thoughtful or research-backed. At the trait level, the level of importance may differ slightly by market, industry, business model, geography, etc., but they each matter.
Take a look at the model and use it not as an answer, but as a question. To make it practical, score each person on the team from 1 to 5 on each trait. Look for how different aptitudes might cause friction. Look for where abilities leave some gaps. And if you have questions or want to engage more on the Compass Model, feel free to reach out.
Good luck on your journey.
Originally published in ENTERPRENEUR'S HANDBOOK