“I’ve reviewed the business, but I can’t seem to get the right question answered. I need more information to decide if this is a good fit for me,” Mark said.
Mark is a corporate executive who is ready to make the leap to fast-growing startups. He wants to get in early with a company solving a big problem in a big market. He has the right experience and track record to do what these types of companies need. Scale and scale quickly. I know he can do it, and so does he. He’s done it a couple of times for the big corporation. He figures with the proper funding, he can do the same thing in the right startup.
“What kind of information do you think you are missing?” I asked.
“I want to know what keeps this founder up at night. What does he think is going to kill him. I would like a list of the three things or five things. I want to hear them and talk them through. I’m not saying I have the answers, but I want to know what the founder is thinking about,” he explained.
This guy gets it.
This really impressed me. Assuming you’ve found a big problem in a big market and you have designed a good solution, all that’s left is the people.
If I have learned anything over 25 years in startup investing, it is this: People are everything. The people create value. The people hit goals. The people fix what’s not working. The people move, shake, and shimmy when it is demanded. And most importantly, they do it together. Great people who blend seamlessly into great teams are bound to succeed.
Solving a big problem in a big market is really hard.
There are many worthy competitors aiming to own the space you are after. You can’t put a plan in place and expect to simply execute on the plan. It’s like hockey. The plan is to get the puck in the goal.
So you practice setups and offensive approaches on goal. You decide who is going to be where when skating down the ice in attack mode at 30 miles an hour. Then a defenseman steps in and deflects the puck. Or you get the puck back quickly, but now everyone is out of position. The puck isn’t where you expected it to be. So you need to readjust. You need to set up a new play formation on the fly. This takes a team who never forgets the goal but is comfortable in their talent and creativity. They must trust each other and go with the flow.
“I am looking for transparency,” he said.
“That’s exactly what you are looking for,” I agreed. “You need to approach this like you are getting married. If you join this company, you will spend more time with this founding team than you will with your wife and kids.
“I know you like this company and what it can become, but I want you to look past that. Focus on the founder and the other key man in the business. Do you see yourself fitting well together?
“Will you respect each other’s skills and experience to operate autonomously? Will you ever get to where you are talking in shorthand as you finish each other’s sentences? Can you get to where you know what the other guy is thinking? Will you feel free to tell it like you see it? Are egos pushed aside? Do you share the smartest guy in the room as a meeting progresses?”
“You get it. That’s what I am looking for. I am in the midst of some excellent earnings years. I’m not looking for a guarantee. I’m looking for an honest shot at building something big. My experience tells me talented people who are honestly and humbly interdependent give me the best shot,” he said.
He’s right. People create value…together. But you know what? Mark needs to share what keeps him awake at night about this deal. Real relationships are built on transparency. Mutual transparency.