Celesta founding partner Sriram Viswanathan gives us his thoughts on what it takes to be a stand-out founder and how to appeal to investors. With an ever-changing funding climate, what tools do founders need to adapt and successfully scale a business?
As an investor, the capabilities and character of a prospective founder are one of the most important things we examine. While it is always a challenge to successfully launch and grow a company, today it is perhaps more important than ever to have a strong leader at the helm of a startup. The economy is uncertain, competition is fierce, and it can be difficult to get funding. Many founders are facing incredibly tricky demands and personnel decisions.
However, times like these can also create opportunities, demonstrating which founders and CEOs are truly gifted leaders and business builders, and separating the good from the great. Startups inevitably face setbacks – some bigger than others. What ultimately matters is how founders respond.
A good founder is self-aware enough to know their strengths and weaknesses and is willing to admit when they need help.
As we enter a new year, with the backdrop of a technology landscape more dynamic than perhaps ever before, the qualities we look for in special founders are front of mind (as I’m sure they are for many investors). I encourage entrepreneurs to embrace these principles of savvy startup leadership in order to find long-term success as a startup leader.
1. Be open to change.
The business world is constantly changing, and startup leaders must be able to adapt quickly, whether it's a shift in your GTM plan, product strategy, or otherwise. Adaptability is a key strength and a founder who is unwilling to change their plans is likely to get left behind.
2. Focus on SOM (share of market) over TAM or SAM.
It is easy to get caught up in the size of the market you are targeting – but it is more important to focus on your share of that market. What is your unique selling point? How can you build a moat against competition? These are the questions that will help you find and maintain a competitive advantage.
3. Ask for help – and accept a change in leadership when needed.
A good founder is self-aware enough to know their strengths and weaknesses and is willing to admit when they need help. They understand that serving as CEO often involves a different skill set than developing a startup idea and getting it off the ground; they realize the needs of the business evolve over time and they may not have all the skills and experience necessary to lead a company to long-term success. In some cases, of course, founders prove to be great at serving as CEO as well. However, the best leaders are more passionate about what is right for the business than they are about a specific title.
4. Be ruthless in your focus.
One of the biggest mistakes I see early-stage founders make is not valuing their time properly and spending too much time on things that are not of high value to the business. If your strengths lie in technology or business development, you don’t need to be overly involved in negotiating benefits or designing your brand logo. Delegate thoughtfully and focus where you can really add value and have 10X capabilities relative to the average person.
At a company level, many startups spend too much time chasing after lots of opportunities instead of focusing on only the best opportunities. I like to remind founders you can't be all things to all people. Both with your product strategy and your target market segments, a good practice is to start with a clear focus, but within a broad-based platform and market that is designed to easily expand over time.
Practicing these qualities can be easier said than done in times of stress, which is why founders must also surround themselves with a strong team – as well as advisors and mentors – who can help them recognize blind spots and support them along the way.
Starting and building a company is a journey, not a destination. But startup founders who lead with these qualities are well on their way to success.