Traits of successful startup founders outside of Silicon Valley
I think few would argue with the affirmation that creating a startup in Silicon Valley is a different experience versus creating it anywhere else. Sure, building a successful business presents the same challenges, but the environment in Silicon Valley provides many benefits. Nonetheless, everyday there are more and more examples of successful startups created elsewhere. From SnapChat in Los Angeles, Etsy in New York to Allibaba in China and Flipkart in India. These founders have a lot of the same characteristics even though the environment where they create their companies is a dimension away from the environment in Silicon Valley.
In countries such as Colombia, where I reside, there’s still a long way to go in terms of creating a vibrant startup ecosystem. Endeavor, a non-profit organization, that supports high impact companies and, particularly, entreprenuers has done a great study of how, in a country like Argentina, a few very successful companies and entrepreneurs such as MercadoLibre, Patagon, Bumeran and others transformed the ecosystem there. Disclosure: I am a mentor at Endeavor.
As I’ve written previously, Colombia has some startups with great potential to become large organizations with huge impact. These include PayU, PayMentez, Click Delivery, CoInternet, Aldeamo, Adsmobile and Tappsi (where I’m an advisor, shareholder and employee), among others. A number of these have already been acquired. Fortunately for the ecosystem, the founders of these companies are all very interested in giving back. I haven’t mentioned probably the most valuable startup to created in Colombia, which is VivaReal. I wrote about them five years ago in the New York Times and VentureBeat, but they are now focused on and based out of Brazil and becoming a Latin American blockbuster company.
The aforementioned companies have (including VivaReal) and will advance the local ecosystem. Nonetheless, we certainly shouldn’t stop trying to promote new founders and helping those who want to create new startups. There is a lot of local government money supporting institutions that accelerate bushels and bushels of new founders. I think that these initiatives will, at the very least, provide a certain type of evangelization of seriously considering the startup path and, along the way, it will educate those who undertake this path on the challenges that founders face.
Nonetheless, it is really tough to bring the government way of doing things (e.g., focus on volume and impact measured in large numbers) in synch with the way in which those with demonstrated success, such as YCombinator, have achieved success. Accelerators and Incubators that don’t produce results are tough to justify and that’s why I’m delighted that we are already starting to see concrete results in terms of companies making it to the next stage of development.
Since YCombinator is focused on Silicon Valley and on teams that have already been formed, I was happy to see that the Founder Institute was interested in working with international founders and starting at the idea stage (an extremely hard thing to do). When I started to think about things that I could do to help develop this ecosystem, I had already seen a number of early stage startups and heard some ideas.
That’s when I realized that the biggest void here was in helping potential founders come up with viable ideas and supporting them in building a team, building product, etc. This need seemed to mesh perfectly with the vision of Adeo Ressi, creator of the Founder Institute, since he was focused on the idea stage, had an enviable mentor network and was NOT closed off to international entrepreneurs.
As I wrote previously, things seemed to have worked during the past four years since we now can boast an incredible local and international mentor network for Founder Institute Colombia and, more importantly, we can point to startups that continue to grow and, some of which, are some of the select few startups that have received investor financing ($2M). The lion’s share of this success is due to the amazing local Founder Institute mentor network as well as the Founder Institute (FI) program and the unique method of choosing founders. I’d like to delve a bit more deeply into this last point (how FI selects founders). It’s not possible to find a 100% predictor of founder success and many key factors such as determination and drive are much better discerned in the heat of battle.
However, you can make the case that founders have certain traits that help them during their struggle and distinguish them from professionals who are much happier working as employees. In an attempt to evaluate these traits in a more objective way, FI has founders take a test that evaluates their “Entrepreneur DNA.”As I mentioned, there certainly are other factors that determine success and these are examined within the program.
Founders in emerging markets have a unique challenge, particularly those who solve local problems. Much of the grit and determination that are so paramount to overcoming the plethora of obstacles to doing businesses in relatively hostile business environments (when compared to Silicon Valley), can potentially blind these same founders during future stages of company development. Organizations such as Endeavor help tremendously to get such founders to look with a critical eye on everything they are doing and be more objective when measuring their current habits with the bigger opportunity in front of them.
That said, three of the traits for which the Founder Institute tests and my comments and opinions on the emerging market context:
Fluid Intelligence – “Ability to quickly learn a rule set and apply it to solve a novel problem. With a constantly changing playing field, founders must recognize patterns and quickly adapt to survive.” The emerging market context: startups outside Silicon Valley and, especially, outside the U.S. encounter tremendous amounts of friction. Successful founders from Colombia and, especially, in country, have tremendous amounts of determination and drive in order to overcome this friction and get them to a certain success level. In order to get to the next level, I’ve seen external mentors and organizations (such as Endeavor) help tremendously in awakening this key, and somewhat dormant, trait. This trait is what enables these talented entrepreneurs to snap out of survival mode and make investments in time and resources commensurate with the (bigger) opportunity in front of them.
Openness – “Constantly seeking new experiences and knowledge. ” The emerging market context: startups outside of Silicon Valley can really benefit by having an inquisitive mind. This is of utmost importance outside of the U.S., since the amount of information from other startups and others who have researched the startup space is accessible to all. In these countries, providing mentorship is quite prevalent. Nonetheless, before seeking mentorship, I would say that it is invaluable to research the space/industry you are entering as well as the knowhow about how to build a startup, then try out things and think for yourself out in the wild. A founder that has done this, will be infinitely more able to take advantage of mentoring and will also be much more demanding of the mentors who work with her or him.
Moderate Agreeableness – “Balance cooperation with antagonism.” The emerging market context: Emerging markets and, particularly, the country where I reside, Colombia, are notorious for having formal cultures. Disagreeing with someone is often viewed as an affront. Because of this, I see some entrepreneurs overcompensating for this and go into bully mode trying to pass it off as “being direct.” The key distinction is that the mind and logical reasoning can not be turned off; this is actually highly intellectual conversation. However, instead of objectively questioning findings, which can hurt sensibilities by itself, I’ve seen entrepreneurs interpret this to mean that they will push an idea mercilessly, to the point of foregoing reason, and pawn this off as their being “direct.”
FI is certainly a human endeavor and, as such, it is imperfect. Nonetheless, I’m now seeing the measurable impact it is having and prefer to keep on truck’n than join the sidelines and do nothing to advance the startup ecosystem here. The Founder Institute Colombia has one (excellent) sponsor, Microsoft, and will start receiving applications in February.