[This blog originally appeared on Ted’s Take on February 6, 2012]
In a previous post, I began to share my thoughts on some key traits I’ve found in successful founders: what makes for great leadership and the characteristics they share in developing high-growth, high-value enterprises.
Here are a few more traits I have found in great founders:
- Personal Integrity: All startups and speed-ups will hit bumps in the road. All will have difficult problems to overcome, and all founders will have their mettle tested and their emotions stretched to the limit. I have found that people with great personal integrity– high levels of honesty and good personal traits — are the best founders and leaders. This is the key question when I do due diligence on a potential investment: Can we trust the founder? When I make an investment and join with a company and its founder, I take personal the level of trust and honesty in a relationship. Transparency– open communications and candor — are traits that serve these relationships well. Communicating bad news to me is more important than telling me how well the company is doing!Jason Hogg, the founder of Revolution Money (which is now a part of American Express) is the best example of a high integrity executive I can think of today. He was a former FBI agent– he grew up in an industry based on trust– and he and I went through unbelievably trying times together as we tried to grow a financial services company during the 2008 and 2009 economic meltdown. Jason was a founder and knew everything about his industry and his product — from business model to technology to market partnerships to his competition. He was quite impressive from a resume and from an operating standpoint.But what was most telling was how he reacted and acted in times of great stress. When the company was in difficulty, he was steadfast, open and honest. He communicated well with all constituencies, he worked hard and smart, and we got through it together. I would invest in any company that Jason was involved with as a founder or senior executive.
You can tell a lot about a person when times are tough. Founders with personal integrity will get through the tough times in a manner that is respectful and thoughtful and builds long-term value. Revolution Money was a great company; it created a one-of-a-kind, next generation payments platform. I will remember how the founder handled tough times and emotional distress with grace and with honor.
Jason is now a senior executive at American Express and I have joined the Board of Directors of American Express. American Express is all about high value, high trust and high character. The Revolution Money investors made a very good return on their investment, and Jason Hogg’s personal integrity and drive made the deal a winner all around.
- Been There–Done That: It isn’t surprising that founders that have had success in one company will have success in another company. Nothing succeeds like success, and I enjoy backing second acts as much as startups. So it is no wonder that I have backed personally Scott Ferber– founder of Advertsing.com (that we acquired at AOL) — when he became the founder of high growth Videology. I have also backed Jason Calacanis — who founded Weblogs that AOL acquired — in his new company called Mahalo; and Jim Hornthal — who was founder of Preview Travel, that went public — in his new company called Triporati.All three founders are seasoned winners; all of them are fun to be around and have learned so much from their first founding experiences. It is an honor to be an angel investor in their companies.
- Having a chip on your shoulder: I love working with entrepreneurs who have a chip on their shoulder. They have a score to settle, are highly motivated and fiercely competitive. These founders are driven to win: they play hard and work hard and build a team of like-minded competitive players.The best example I can think of is Jim Bankoff at SBNation. He and his team are “going for it” in the highly competitive sports and consumer electronics category. In fact, Jim wants to build the best next generation online publishing company: he wants to out execute AOL and Time Inc . I believe he can; he is attracting great people to his team; he is focused; he is tech savvy; he is a great guy and people are rooting for him to win. I am a small angel investor because I want Jim and his team to win!
- Stick-with-it-ness: Staying the course – while being agile and making the right course corrections – are key traits of real winners. Founders must be true to themselves and never give up. Sometimes success in life is just showing up and surviving through the rough times. Being tough minded– but kind; being focused and maniacal and driven, while not losing your soul: these are things that I look for in new investments. Being customer sensitive, employee focused, and a realist are important traits for a founder.Ali Saadat at Fedbid is a good example of this quality. He has basically owned and operated his company through good times and bad times for a decade. Many better funded competitors have come and gone, while Fedbid has steadily worked to create a great platform and a way to create new marketplaces that serve buyers and sellers well. His company will be considered an “overnight success” after 15 or so years at it! There are few overnight success stories: most companies have to grind and find answers to tough questions and fend off tough competitors and naysayers. That is why I admire stick-with-it-ness in founders.
So there you have it: A quick snapshot of some winning traits that I see, and why I respect and love founders and entrepreneurs.