On Leadership, Teams, Success & Happiness

In my day to day life, the topic of leadership and teams has been a frequent topic. Some investors are market-focused, while others are more team-oriented, while others look for market fit and product/market fit. Because I am team-centric, every investment decision that I make centers first and foremost on this plane. Only then can you care about the product, market, or their "fit".

My belief is that exceptional leadership can attract teams that are more than the sum total of their parts. Nearly all companies face crisis times. Only through the inspiration and dedication leadership can you motivate your teams to dig deep and emerge stronger.

LEADERSHIP

I invested in a company that had deep domain knowledge. The founders and investors agreed that it was sensible to hire a CEO to oversee the next phase of company. This would allow the main founder to remain focused on the product that he loves and excels at. The founder initially spoke out about the need for someone with deep domain expertise. I advocated for the opposite.

"A great leader is what I care about most. I'm looking for someone who inspires you to create great products, but doesn't know your trade as well as you. I am looking for someone who can sell but not better than our head sales. I am looking for someone who can plan but isn't trying to do the work as the VP Finance.

I need someone who can set a stretch goal we can reach, and gets agreement amongst the team to work towards certain goals. I need someone who can work with partners, attract future investors, and keep everyone calm during setbacks. It's nice to know that they are industry veterans. But I want them to know that they aren't stuck with legacy thinking ."

He's still not certain. He is still unsure.

Imagine you were a Phd wireless chips designer at UCSD, then Qualcomm. Start a startup. You decide to hire someone to run the company. This will allow you to focus on technical excellence.

You need someone who can handle handset deals in the US and Europe. To build your R&D, business development, and sales teams, you need someone who can raise $15M. You need someone who can manage teams across three continents. Are you searching for a Phd wireless chips designer em?

For certain, leaders are smart. Leaders are often very skilled at getting information from people and helping to create a framework for decision making. They also push for support within the organization from those who back the decision and those who don't. Yes, I would like to hire someone with a high IQ and EQ, but not someone who is better at your skill set than me.

ON TEAM

What is it that prepares us for great leadership? It is not just book-smarts. It's not. It's street intelligence. has. Recently, this topic has been much discussed in the public. Amy Chua, a Yale professor , wrote a book on raising children in the "Chinese Mother's" way. She was focused and strict. She spoke out about things that her daughters weren't allowed to do.

"Attend a sleepover, play with a friend, go to a school play, or watch TV, play computer games, and get an A grade, not the No. 1 student in all subjects except drama and gym, can play any other instrument than the piano or the violin em>

It was probably a self-fulfilling prophecy, as it is not unusual for militant mothers to demand sleepovers.

My wife is out with her girlfriend, which is a big irony. My two boys and her two boys are sharing a sleepover. The sleep-over is being run by me alone! We made a fort, played Wii and ate pizza. Now they are watching "Despicable Me" for the next 90 minutes as I type this. Poor Mark. I must be making Neanderthals.

Oh, and my second grade son chose to play for the school's basketball team this season. It was his choice. To root him on, I quit work at 5:15 a.m.

After he left, I took him to Pinkberry frozen yogurt with chocolate chips on top. This was so he could have a good time with me before he gets too old and starts to think I'm crazy. Because it was only 4pm, we ordered a small size. I didn't want to spoil his appetite. He was also asked to promise that he wouldn't tell his mom that he had eaten a Pinkberry sneeky. (Sorry, Tania!)

I value rule breaking. It is part of my ethos. Growing up, I believed in the motto "question authority." I debated everyone, made teachers prove their claims, and talked to bullies. I learned to push teachers, bullies, and parents as far as possible to make them love me and frustrate me. I could talk smack, but if I felt I was about to be punched I would diffuse the situation. Sometimes I even use humor.

Although I was not the most strong kid in my class, I also learned that I was not a wimp. I was able to figure out the hierarchy and made friends with strong people. My only two incidents of being kicked in front others were when I was at the top of my game. One time, I was in a stadium and the entire school was watching. My best friend ran away from the crowd and beat him back. It was magical. It was a blessing to have some loyal friends. I later took a beating defending him.

What's the point of all this?

These daily interactions are what I believe lead to leadership and team building. As a child, you are able to push boundaries and discern right from wrong. Sometimes you get smacked. It is easy to see how people can form rivalries and factions. People who are willing to take on the toughest or most popular kids in their class, but not to cross them, are often the best. This is important to understand from a young age.

These skills are more important than the ones you acquire in your life. My experience as the president of my fraternity and rising through the ranks was far more valuable than what I learned in class studying supply & demand curves in Economics. It is an interesting story that I will write one day.

I learned how to work in teams. I was able to recruit others to our group and not to another group, build consensus amongst strong personalities, empower others, get people to take action, quash those who are against you, and build partnerships with other Greek organizations. This was an extension of my 19 years of experience.

This is what Amy Chua seems to be missing.

Please read the following article by David Brooks about why Amy Chua is a wimp, and not a hard-ass mom. Here are the slightly shorter money quotes:

"I think she is coddling her children. She protects them from intellectually challenging activities

Although practicing a piece of music takes focus and concentration, it's not nearly as difficult as having a sleepover with 14 year-old girls. These and other social tasks, such as managing status rivalries, understanding group dynamics, and navigating the distinction between self- and group, are all cognitive challenges that will overwhelm any tutoring session.

These difficult skills are essential to success. Most people work in groups. Because groups are more efficient than individuals at solving problems, we do it.

Researchers from MIT and Carnegie Mellon discovered that groups exhibit a high level of collective intelligence when members are able to read each other's emotions. This is when they are able to take turns speaking, and when each member manages their inputs

It is difficult to be part of a group that functions well. It takes the ability to trust others outside of your circle of kin, to read intonations, moods, and to understand how each person's psychological pieces can or cannot be incorporated.

This skill is not learned formally but is taught through hard experiences. These are the types of experiences Chua shields her children from, making them hurry home to finish their homework.

Bingo. These are the qualities I look for in leaders and entrepreneurs. It is what I consider the entrepreneur DNA.

ON SUCCES

How can we measure success? How do you measure success in raising venture capital? What are your results?

Entrepreneurs tell me the following:

"I have had difficulty raising funds. Investors desire to see more traction. This frustrates my. You thought you were supposed be VCs? I thought you were supposed to be venture capitalists. "How come you guys only invest when there is proof of success?"

"I don’t have enough money yet to hire my team. They are waiting patiently, and will join me once I raise enough money. We aren't moving fast enough. I don't have the traction I need to get people involved. I also can't attract people without money, and I can get money with no traction. It's a big, cluster-fucking loop that is recursive.

They don't actually say it that way. This is my Friday night snark. It's basically what they mean.

Here's the problem. VCs invest in people with little traction. They will fund people without customers. They will even fund people without a product. They won't fund you. Dig deeper. Learn why. Reflect. Be honest.

This was the conversation I had this week. This conversation was difficult because I wanted to help the founder succeed. I also know that he has the magic powder to succeed. But it's not possible without a team.

Me: "I love the market. It was my favorite market 18 months ago. Your product is beautiful. Your go-to market strategy was not convincing to me back then. But, this new strategy is. Although not perfect, it is much better. You have tried for years to raise funds. What makes you think you haven’t succeeded?

Founder: I didn't have the right product focus. I have it now.

Me: "Well, you've met other VCs lately. What are they saying to you?"

Founder: They love my idea, but they need to see it get more traction. We must sign up more customers to prove that we can make money.

Me: "And believe that?"

Founder: "Yes. They seemed to really like and respect us. We haven't proved enough."

Me: "Really?" I funded a team that had a product idea but no product. It was called Pose. Their live product, which was featured on iTunes, now has $1.6 million. It has received rave reviews. They had a prototype when I met them. I am not the only one willing to fund at a earlier stage than you. You've been around for almost 2 years. Your software is beautifully designed. You are missing something, I believe.

You haven't met with us three times in 18 months. A part-time lead architect, part-time developer, and part-time community manager are all part of your team. Meetings with other members of your team are required. You have proven your ability to excel in product and marketing. However, I doubt you are the whole package. I believe that the fact that there isn't a team indicates that you have weaknesses that need to be addressed. You might find a partner to help you through this."

Founder: "Wait a second. How do I hire a team with no money? That's the problem. I need someone to support me, and I know that the rest will follow."

Me: "The problem is that you haven’t hired a team." It's not possible to have " MO." Although founders don't like this, it's a common conversation. There are three people who have hired people for every person who comes to this forum to discuss the team they want to build. They didn't have the money. They were inspired. They had Chutzpah. They believed everything would work out, and they had the leadership skills to convince others.

It is important to hire a team. This is something that even investors don't understand. Real entrepreneurs can attract others to their calling. They can attract people who are willing to work with them. Sometimes, they bring in people who are higher than them. Real entrepreneurs are able to recognize their limitations as CEO. There are many answers, and I don’t know which one is right for you. It's going to be extremely difficult to raise funds until you can prove that you are capable of doing that.

Scot Richardson is the founder of LaughStub. I had this conversation 2 years ago. He accepted the challenge and was able to become a CTO within a week. One. He was able to raise funding within 4-6 weeks. I personally wrote him a check (not from the fund). He showed me that he could make it happen, and I supported him. He has been on a tear and signed up for the two largest comedy clubs in America. He is a star. I was not sure if he was an entrepreneur. Now, I am.

HAPPINESS

Finally, I couldn't stop talking about happiness.

I'm a group person. That's how I am. I have always been part of teams. I create teams where they don't exist. It's my place. It is where I get my group energy. There is also scientific evidence to support the idea that happiness and well-being are enhanced when you are part of a group.

Another wonderful piece on happiness , this time from David Brooks, my favorite OpEd columnist.

"Over the last few decades, many researchers have studied happiness. One of the most important findings is that while worldly success has shallow roots, interpersonal bonds are permeable.

The relationship between income and happiness is complex and, after a certain point, fragile. The lottery does not seem to bring about long-lasting improvements in well-being. People don't feel their best during years of winning the most promotions.

Daily activities that are associated with happiness include sex, having dinner with friends and socializing after work.

A group that meets once per month can bring you the same happiness as double your income.

Professional and economic success exist on the surface, but they are derived from interpersonal relationships that are deeper and more significant."

See? You can now feel better about the salary of an entrepreneur -- you are part of a closely bonded group! ;-).