As an angel investor, I get requests almost every day to review a new product or website, and provide feedback on its potential success. Yet I can’t remember the last time any entrepreneur asked me to assess personal potential, despite the fact that most investors will admit they invest in the person more than the product. It is people who drive successful businesses.
So it behooves every aspiring entrepreneur to understand their own DNA before picking a project to bet their life on, and to facilitate effective communication with all constituents, including partners, investors, team members and customers. We all have strengths and special interests, and it always pays to capitalize on these, rather than assume all opportunities are the same.
To confirm the value of checking yourself, I find more and more investment organizations and startup incubators, including StartupAmerica and CoFoundersLab, already use a formal process, such as StrengthsFinder, as part of their screening process. If they find your strengths are not consistent with the project you are bringing forward, their interest may come to an abrupt end.
A newer methodology that seems to be gaining traction measures an entrepreneur’s fit or DNA in each of four quadrants: Builder, Opportunist, Specialist and Innovator (BOSI). It was developed by Joe Abraham, who manages a portfolio of successful high-growth international companies. You can even check your own DNA with his self-assessment against the four key types:
Builder. The Builder excels at constructing a business from the ground up. These people are the ultimate chess players in the game of startups, always looking to be two or three moves ahead of the competition. They are usually described as driven, focused, cold, ruthless and calculating. Many might say Donald Trump epitomizes this category. They usually win, but don’t often get the appreciation and happiness they crave.
Opportunist. The Opportunist is the dreamer in all of us. It’s that part of us that maneuvers to be in the right place at the right time to make big money. If you ever felt enticed to jump into a quick money pitch on the Internet, that was your Opportunist side showing. These entrepreneurs dream big, go big and too often crash big.
Specialist. The Specialist entrepreneur will enter one industry and stick with it for a lifetime. They build strong expertise, but often struggle to stand out in a crowded marketplace of competitors. Picture the graphic designer, the IT expert or the independent accountant or attorney. These types of people start good family businesses, but can’t scale.
Innovator. You will usually find the Innovator entrepreneur in the lab working on their invention, recipe, concept, system or product that can be built into one or many businesses. The challenge with an Innovator is to focus as hard on the business realities as the product possibilities. If one of these entrepreneurs teams with a Builder, the sky is the limit, and every investor wants to get a piece of the action.
Of course, understanding your type and tailoring your plan is still no guarantee of success. The second principle that all investors live by is that successful businesses are also about execution, rather than the idea. That’s why I also put major emphasis on startup traction, milestones achieved and metrics rather than listening again to how great it’s going to be.
Nevertheless, I see tremendous value in understanding your entrepreneurial DNA, as part of your personal preparation, or in conjunction with incubators, accelerators or advisory boards. I am not convinced that any organization has the ultimate system to map your DNA to business success, with all the unknowns of a new business and personal idiosyncrasies, but it’s a good start.
There is still no substitute for personal relationships and effective teams. That’s why most angel investors only invest locally, where they can do that assessment of the founder and his team personally over time. Venture capital investors have the resources to travel to entrepreneurs with high potential.
So before you initiate your next startup, I recommend that you spend some time looking inward, or working with a mentor who will tell you where your strengths lie. At the very least, you can then find a co-founder who has complementary strengths, and prove the theory that one plus one equals three. All too often the alternative is that one plus zero ends up as zero.
*** First published on Entrepreneur.com on 6/10/2015 ***