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What I look for in founders
There are a lot of people out their building startups. So how do we separate the mediocre from the good?
I’ll be in Miami from April 16th - 21st to catch some of Miami Tech Week. I’d love to meet anyone who’s also going. So if you’re around and would like to meet, reply to this email or DM me on Twitter or LinkedIn.
And I’ve got a sofa free if you want to couch surf.
If you start making angel investments, you have to find *people* to invest in. ‘People’ is the key word there. Because you’re investing in the founders themselves rather than their company. A great company with a shit founder isn’t a great company. A great founder with a shit company is still a great founder.
Finding the right people is crucial when you’re investing. So what kind of person are you looking for?
There’s a lot of content about what to look for in a founder. And it can be conflicting. What I’m writing here is based on my observations of founders who I’ve spoken to and been successful. Your mileage may vary.
They understand the problem they’re trying to solve
Many founders go into build mode without truly understanding what they’re trying to solve for. They’re building for a problem that doesn’t exist, or isn’t as significant as the founder thinks. And it ends up being a colossal waste of time for the founder and a waste of money for investors.
How does a good problem know the problem they’re solving for? Because they’re following the oft-repeated advice from Y Combinator (a prestigious startup accelerator): they talk to their customers. Or, they’re their own customer.
A founder who knows where their strengths and weaknesses lie immediately has the potential to be great. By knowing their flaws, they can find the right support, such as a co-founder or early hire whose skillset aligns with the founder’s weakness.
Somebody who’s self-aware is also more likely to seek out advice. That doesn’t mean accepting all advice that comes their way. But they know to ask in the first place.
They’ve got domain expertise
This is a controversial one. Great founders I’ve spoken to have experience working in the domain they’re building in. So not only do they understand the problem they’re solving for, they understand the context.
Take FinTech. A founder who has worked in financial services before understands the regulations they’re working against, making for smoother sailing.
Shit happens. And good founders know it will happen and can navigate around it. As Paul Graham says, they’re relentlessly resourceful.
Often I hear from founders who are building a startup and have got millions of ideas for different product categories they can expand to and new features they can make. But they haven’t built their main product yet.
Now I’m not saying founders shouldn’t think strategically. They should, and good founders do. However, it’s key to build the main product first and get that into the hands of as many customers as possible.
So we know what a good founder looks, how do we find them? Next week, I’ll discuss how you can find founders.
And if you’re in Miami, hmu.
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