Athenian Capital

Four virtues critical to success in entrepreneurship

America’s greatest startup success stories almost always involve creative, resolute, determined, defiant, independent thinking, true believing, underdog outsiders. And while those success stories are extremely rare, if you’re smart enough to launch an even remotely credible startup, then you’re almost certainly smart enough to have landed a cushy job at Google, or some well-funded startup. And the kind of people who pass that up to instead launch a business of their own are almost universally going to be this rare breed of defiant outsider. These outsiders may be rare relative to the general population, but relative to the population of would-be startup founders they aren’t rare at all; in fact, they’re almost cliché.

If that’s the standard by which some VCs judge who they should partner with, well that basically means they can partner with anybody who comes around looking for cash.

As we see it, in the tech world, there is no real danger of founders lacking ambition, determination or creativity. That’s their shtick. And the very fact they’re trying to launch a tech startup is the best possible proof you could have that they possess these virtues. You’ll know almost immediately that they possess the guts, self-confidence, and candoism necessary to run a startup.

However, the primary danger, as we see it, is that these founders might really be lunatics, flimflam men, or megalomaniacs. With that, if we’re looking to invest in a company based on the personal virtues of its founders — in addition to being defiant and determined and all that — we’d probably want to make sure they’re objective enough to see how much the odds are stacked against them; how great a role chance will play in the effectiveness of their strategies; and the extent to which powers beyond their control will influence their company’s fate. Because the founder who’s courageous enough to try launching a company despite knowing all that — well, he might just have the tenacity necessary to succeed.

For the same reasons, there is no real danger that a founder isn’t a “creative spirit” or “true believer” that some funds look for — the secondary danger is that they might be a fanatic, hopeless romantic, or pathological narcissists. This is the virtues we look for — in addition to being an independent thinking, true believing, fighter, etc — are these: that founders are (1) objective enough to know the cards are stacked against them; (2) disciplined enough to exercise restraint; (3) humble enough to admit mistakes; and (4) flexible enough to change course.

Perhaps these virtues aren’t as sexy-sounding as the ones some other, more prominent funds identify, but I would say hands down they are more exceptional. More on this later.