Can I see this team building a very big business, can I see myself working alongside them for ten years while they do so and will my partners back me?
Introducing the Notion “Ideal Founder Profile” – aka the 5 characteristics we look for in a founder.
In our world of early stage of B2B tech investment we are obsessed with the hunt for the ICP – the ideal customer profile – the customers our portcos are laser-focused on. The identification of the ICP is the foundation of:-
- Product / Market Fit – we have identified a combination of proposition, product and pricing that resonates.
- Go to Market – we are replicating sales and expanding revenue within the ICP.
- Capital Efficient Growth – we are rapidly growing revenue in a capital efficient manner.
In each of these stages we return to the questions of who is the customer, how will you access them, how big is the market to ensure that our companies are solving the number one problem in their chosen market AND that the chosen market is big enough to support this first phase of their chosen growth strategy.
The Ideal Founder Profile
But before we get to any of these questions about customers, markets or products we need to make an investment.
Notion invests in exceptional entrepreneurs (and companies) solving big business problems with the potential to disrupt and lead large global markets.
Those investments are often early stage – maybe pre-revenue, sometimes pre-product – so many are predicated on our belief in the founding team. Like most investors we meet with hundreds of companies for every investment we make.
So if we believe in the power of the ICP, why not an IFP (Ideal Founder Profile)?
Every investor has ideas and personal beliefs of what “ideal” looks like, so the challenge is to distil those into a common set of characteristics.
I believe in the power of the team. It’s rarely about just the founder, we are looking for and investing in exceptional teams. – Chrys Chrysanthou.
By considering current and past investments we can identify the common characteristics all our most successful entrepreneurs have shared (risk takers, ambition, intellect, perseverance) and then consciously start applying those as a methodology for future investments as well as a framework for helping the founding teams to develop and grow.
I ask myself this. Can I see this team building a very big business, can I see myself working alongside them for ten years while they do so and will my partners back me? – Chris Tottman.
As an early stage B2B software investor, our companies have much in common, but what makes them different and gives them the ability to be great is always unique, and the same applies to entrepreneurs.
What makes a great entrepreneur? This is a question I get asked and think about a lot. Apart from being a fascinating and elusive subject, it also forms a central piece of any investment decision I make as an investor. – Jos White.
This isn’t an identikit approach but rather a framework to help us make better decisions over extended periods. There are a number of ways at looking at founder characteristics.
- Unique, in-depth, proprietary domain knowledge, expertise, or connections
- Ability to learn super-fast and build great teams
- Ambition, drive and resilience to realise a big vision.
It’s a prerequisite for me that the founders have deep sector knowledge and domain expertise. And not just on where their market is now and but where it will be.” – Ian Milbourn.
- A deeply held conviction that the world should work differently.
- A rebellious streak
- Personal exceptionalism – hard on themselves and others
Many entrepreneurs share a common characteristic in that they see the world differently and believe that it should conform to their point of view, rather than the other way around.” – Chris Tottman.
Our Ideal Founder Profile
We distilled the characteristics we care about most into five key attributes or behaviours so we can challenge ourselves in the decisions we are making. We wouldn’t expect any founders to be exceptional on all five, but across a founding team they might. What this also gives us is a structure for guiding the development of the leadership team on personal development as they continue on their journey from founder to CEO.
- Fills the room – this doesn’t mean charisma necessarily but rather the team must command our attention. They need to have a magnetic impact on the people around them. This might be less overt in a technical founder but it is still there especially to a more technical audience.
- Wants to change the world – founders with a big, big vision and the desire to make the world conform to their point of view.
- Leaders – the ability to create high performing teams and attract top talent – people must want to work for the founders and follow them into battle and those founders must also be aware when they need new skills as the company grows.
- Winners – we look for people who display a high degree of personal exceptionalism, operating at an extreme of capability. They are hard on themselves and others, they set high standards for quality and execution.
- Sponges – they demonstrate a high level of self-awareness, soak up knowledge and know when to listen, learn and adjust.
We are a co-founder firm
It is of course far more nuanced. People don’t neatly fill into boxes and we rarely invest in sole founders, therefore what we are really looking for are blended skills and the ability to learn fast. We are also acutely conscious of our three phases for SaaS businesses:
So depending on the stage of investment the mix of skills may well be different across:
At an early stage we may be looking for people who demonstrate a strong orientation on commercialising product or engineers who quite literally embrace their customers. Whereas at a later stage the emphasis will focus more on building the team, hitting the numbers, raising large amounts of capital.
As with all such initiatives the above are simply a set of guidelines. They drive internal debate. They help us make informed decisions pre-investment and support our companies better post-investment. And we try not to lose sight of that fact that there will most likely be something about the very best entrepreneurs that simply doesn’t conform.
Posted by Stephen Millard, Chief Platform Officer, Notion Capital.