Spoiler alert: There’s no “recipe” for a great startup founder. And anyone who tells you that you just need 7 habits, or 10 qualities, or any other magic number of things is probably more concerned with selling ad space than mentoring founders. Great leaders come in many different forms, with different backgrounds, strengths, and areas of expertise. But some patterns do start to emerge when you look at a big sample of successful founders — especially in the bootstrapped business model. Being in the acquisition business we’ve had the distinct advantage of purchasing more than 30 companies and reviewing hundreds more from behind the scenes. These are a few things we’ve noticed along the way.
Great founders understand the technical and product management side of the business, even if they’re not developers.
While a development background is super common in the SaaS startup world, it’s not the rule, or the only way to succeed. We’ve acquired high-performing businesses from marketers and subject matter experts, too.
But while the businesses we’ve acquired haven’t all had technical founders, we’ve noticed that the best ones have had founders who had the curiosity and persistence to learn about development and product management.
Those founders have also had one other critical skill: Recognizing when a lack of technical knowledge was causing their business to hit a growth ceiling. When Marvin Russell ran into scaling issues with his SEO lead generation startup, MySiteAuditor, he brought in a technical co-founder and it helped him grow to $40k MRR.
We’re not alone in noticing that hard skills are not the only predictor of success. A Harvard Business Review study earlier this year found that experience alone was not enough to make startup teams thrive.
Great founders are hungry and humble.
Starting a business takes motivation and drive. That’s no surprise. The thing a lot of people won’t tell you is that it also requires a good dose of humility.
Building a business with humility starts with making something because it fills a need in your customers’ lives, not an impressive title on your LinkedIn profile. Click to Tweet.
The best founders are willing to jump on the phone, chat, or email with a client, even one that is not paying them money. They understand the importance of feedback both in the early days, and as the product matures.
In those early days, they’ll respond to inquiries on their help desk pretty much any time, day or night. And they’ll happily take on sales and customer support work, too. They don’t consider any task below their pay grade, but they also recognize when it’s time to hire, and when they’ve hit the limit of their knowledge and skills.
As the business grows, they keep asking questions, and they’re still constantly checking in with their customers, team, and peers to validate ideas because they know they’ll never know it all.
Great founders understand the difference between honesty and transparency.
Honesty and transparency are often used interchangeably, but when it comes to business they can look a lot different. For example, an honest founder might break the news to their team that they didn’t meet their annual goals, and they have to lay people off or reduce hours. A transparent founder lets their team know the business is struggling and what goals need to be met to keep things running and keep everyone gainfully employed.
When it comes to communicating with customers, an honest founder is straightforward and fesses up if any billing or security issues come up. A transparent founder is open about their security practices, and any third-party services they use.
Great founders care about their customers as much as (or more than) their revenue.
As a founder, you have to be focused on revenue and profit. This is especially true if you’re bootstrapping, because you’re typically self-funded, and you need your business to pay the bills.
A great founder understands that their product has value and they can charge for it, but they never lose sight of their customers. Because of this they’re sensitive about pricing, and always looking to add more value to their product to keep customers happy and loving their service.
Great founders are great communicators — and they know that ultimately means being a great listener.
With customers, they’re humble, and curious, always ensuring an amazing level of service and trying to learn how to improve their product. They probably have a handful of customers they know on a first-name basis they can call if they’re thinking about a new feature.
In a room of colleagues, they’re likely the one that is sitting back, occasionally talking, but always listening and visualizing a conceptual fit for what they’re hearing and their product.
Great founders build great remote teams. They lead by example, even if they’ve never managed anyone before. They’re responsive, thoughtful, and enthusiastic, and they tend to ask for feedback as often as they give it.
They know when a quick Slack message or email is fine, and when it’s better to hop on the phone or get on a video chat to talk things through. They don’t shy away from difficult conversations, and they handle giving constructive criticism as gracefully as praise.
Great founders are born builders.
If a great idea for a new feature, or new integration comes up, they’re excited to build it and motivated to offer it to their customers. In the early days it’s likely banged out in a very short window of time, because it’s valuable and fun.
They don’t need quarterly meetings, massive roadmap discussions, or to wait for bloated valuations and massive infusions of cash from VC funds to accomplish their goals. They make a decision, figure out how to get it done with the money they have, and go for it.
And because they’re building with their own time and money, they’re not forced to meet deadlines that could compromise the integrity of the product. They build something that solves a problem and really nail it. Then they add on again and again to make it a well-built, thoughtfully constructed product with exceptional value.
And maybe most importantly, great bootstrapped founders are experts at knowing when to build and when to buy.
Because they know that it’s a waste of time to recreate the wheel, but if every component of their product is someone else’s, they’re in for trouble. Click to Tweet.
Great bootstrapped founders are inherently curious and might have started their company as a side project, but now that their side project is making money, they probably have multiple side projects for their side project.
Great founders care what happens to their business after they exit.
Sure, they care about what they’re going to make when they sell their business, too. But not more than they care about who buys it. Why? Because the really good bootstrapped founders care about their customers and their team. You know you have a great founder when they have multiple offers, and they select you because you’re in the best position to service their customers and take care of their team.
Great founders come in many forms.
This list certainly isn’t exhaustive, and as we continue to look at and acquire new businesses, there will likely be 10, 50, or even 100 things we could add to it. But these are a few things we’ve seen that can set a business and its founder apart, and help answer that impossible question: What makes some businesses succeed, and others fail? It’s not a formula, a checklist, or a recipe you can follow. But it’s something we can all aspire to as we lead our businesses and our teams. And it’s what we’ll be on the lookout for as we continue to evaluate the next hundred businesses we look at.