Growth5 Blog

Tuesday, February 23, 2010

10 Skills an Entrepreneur Needs to Get Funded

Serial entrepreneur, now VC at GRP Partners, Mark Suster listed the 10 skills he looks for in entrepreneurs before writing a check. He goes into detail on each of the ten over three posts - part 1, part 2 and part 3. Here are the ten skills with a brief synopsis for each one:
1. Tenacity: there will be people telling you 'no' everywhere you turn. Do you have what it takes to forge ahead?

2. Street smarts: someone who "gets it" – knowing how customers buy, knowing what excites them. Getting out there and talking to the audience. Not relying on book smarts, or established start up 'rules' – making their own way, trusting their instincts.

3. Ability to Pivot: Is the entrepreneur getting feedback and advice from multiple sources, do they have the ability to adjust on the fly when their audience wants something slightly different?

4. Resiliency: Sir Winston Churchill, “Success is the ability to go from one failure to another with no loss of enthusiasm.”

5. Inspiration: tenacity, street smarts, your ability to pivot and resiliency will only take you so far. Without the ability to inspire, you won't be able to convince the potential hires you need to get on board so you can make believers out of the VCs that are considering the next round of financing that will be used to build that great product you've sold your customers on.

6. Perspiration: Thomas Edison, “Genius is one percent inspiration and ninety-nine percent perspiration.”

Suster writes, "If you want a 'job', don’t be an entrepreneur. It’s not a job — it’s your life... For every person who comes into my office with a good idea I respond, 'Don’t worry about your failure, worry about your success. If you fail, you move on. But if your good idea pops big time then, trust me, there will be three Ph.D.’s from Stanford sharing a cheap apartment in San Jose working around the clock to beat you. They’ll be eating Ramen or Taco Bell every night and saving their pennies to pour into the company'...

It may be unfair, but it’s the reality of capitalism. It’s the dynamic that drives innovation. In the future, the competition won’t only be in San Jose, but also in Shanghai, Seoul, and Bangalore... You think China can’t build great Internet companies? Have you heard of TenCent? It’s more valuable than Facebook."

7. Appetite for Risk: How can VCs or Angels justify taking a risk on you if you're not willing to quit your job to work on this project full time. If you won't make that leap it probably means you don't your own project will succeed.

"Entrepreneurs are risk takers. Not wild speculators, but pragmatic risk takers who have a blind belief that they will find a way to make things work. If you put on paper what it would take to be successful in your company, you’d never take the first step, which is why most people don’t. It is often called a “leap of faith” because you jump from safety into the abyss with only the blind faith that you’ll find a way."

8. Detail Orientation: "One of the easiest ways to rule out an entrepreneur is when he doesn’t know the details of his business. There are tell-tale signs, and discussions about competitors often expose them. You can tell whether an entrepreneur has logged into his competitors’ products, talked to their customers, read news coverage of them and gotten the back-channel info."

9. Competitiveness: "Just ask Overture about Google ('Don’t be evil') and how they competed in international markets. It wasn’t all smiles, hugs and “let the best man win.” A lot was at stake, and Google competed fiercely."

10. Decisiveness: "There is no such thing as a startup decision with complete information. The best entrepreneurs have a bias for making quick decisions and accept that, at best, 70 percent of them will be right."

Domain Experience: If you spent three years building relationships with senior executives at media companies, a starting point for your next business ought to be, “How can I exploit these relationships in the next venture I launch?”

Integrity: "If I thought I could make a lot of money backing a dishonest person, I personally would pass. I know many private equity firms that would not."

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