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 40 companies and reviewing hundreds more from behind the scenes.
We’re excited to share a few things we’ve noticed along the way about great founders. They:
- Have a clear vision
- Understand tech and product management
- Create great teams and cultural leadership
- Are hungry and humble
- Are goal-oriented, determined, and focused
- Value and practice honesty and transparency
- Are coachable and adaptable
- Care about their customers as much as revenue
- Show resiliency and persistency
- Are passionate, born builders
- Communicate well and listen carefully
- Care what happens after exiting
- Come in many different forms
Top 13 Traits of the Best Startup Founders
1. Great founders have a clear vision.
A successful founder needs a clear, distinct, comprehensive long-term vision of their company and where it’s headed – whether they’re aiming to solve a problem, grow sales, launch a new product, or something else. They can imagine how to turn their dream into reality, including all the small steps along the way, not just the big picture or grand idea.
They also need to understand when and how they’ll know they’ve succeeded – so, a realistic definition of success should be established at the outset and shared with all involved, though this can of course change along the way as the startup grows and evolves.
Finally, any founder’s realistic vision will include possible roadblocks or challenges they anticipate facing. They know that while they can’t predict every issue that might come up, they can expect certain problems and should be prepared to deal with them.
2. 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 – like Justin Klemm, founder of Ghost Inspector. Justin was a developer who saw a market need, so he built the product. After some time, he sold it, repurchased it, hired a team, and knew when it was time to sell. SureSwift acquired Ghost Inspector from Justin in 2022.
“I’m a software engineer by trade,” Justin told us. “I was, and I’m dating myself here, in sixth grade when we got the internet. I was hooked, I had to figure out how it worked. I was building websites in junior high, the whole thing. I went to college for computer science and worked for a number of different companies afterwards. I always did a lot of freelancing along the way, I was always a builder. I like tinkering.”
And 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.
3. Great founders create great teams and cultural leadership.
Founders are only as successful as the teams behind them, so you must choose yours wisely and carefully. This not only applies to your full-time employees or contractors, but also to your suppliers and professional service providers like accountants or financial advisors. When it comes to these relationships, great startup founders can:
- Create a fine line between personal and professional relationships – they need to put emotions aside and make judgments without personal feelings getting in the way.
- Make tough decisions about others.
- Foresee how and why others will respond to their decisions, so they can plan and act accordingly and in the best interest of all.
- Empathize with others while not allowing their empathy to stand in the way of their vision.
Equally important is a founder’s ability to foster the precise company culture they see as motivational and key to the success of their entire team. When you can bring people together in the name of your vision and inspire them to aim to achieve it along with you, there’s something special that happens. A shared, empowered, encouraging culture emerges and becomes the standard for the startup’s future in everything from how decisions are made to the types of team members you recruit.
4. 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.
The best founders are willing to jump on the phone, chat, or email with a client, even one that is not paying them. 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.
5. Great founders are goal-oriented and determined, with narrow, deep focus & expertise.
Great founders don’t get distracted from their mission. It’s inevitable that bigger, brighter, newer ideas will pop up as you work on various parts of your startup, like operating procedures, hiring, and business development. But, it’s crucial not to go down rabbit holes and get sidetracked with these new ideas and strategies as you begin to fulfill responsibilities.
There are so many different paths and rewards, but you simply can’t do it all. The less focused you are on the best plans for your goals, the less successful you will be. So, keep your eye on the prize by focusing on your main vision and goals, while making notes and adding those new gems of ideas to the parking lot for later, once your startup is well on its way.
As well, contrary to what you might think, you have the advantage of being small and nimble as compared to your large, established competitors. This is because being so small enables you to get to the heart of your goal, strategy, and focus, allowing you to address customer needs quicker and often in a more personalized, meaningful way. And, this dedicated focus also lets you keep the clutter or distractions at bay that can often be time and energy sucks for founders of larger companies. The key here is learning how to say no to things that won’t directly help reach your specific goal or solve your particular problem.
6. 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.
7. Great founders are coachable and adaptable.
Founders are human, just like everyone else, so they, too, sometimes need guidance or mentoring along their journey. Even the most senior, experienced leaders face challenges and obstacles from time to time and have to ask questions or seek advice.
So, the more willing to learn, open to outside input and perspectives, and amenable to pivot, adapt, and change you are, the better off you’ll be in the long run. All of this is essential to both business and personal growth and success.
8. Great founders care about their customers as much as (or more than) their revenue.
As a founder, you have to focus 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.
9. Great founders are resilient and persistent.
There will always be challenges and negativity thrown at you from many directions – let’s face it; this is simply a part of life, both in and out of business. From someone not believing in your idea to legal issues or predictions of economic downturn or recession, you need to have pretty thick skin to weather these storms. Resiliency and a drive and determination to keep trying, adapting, growing, and persevering against whatever odds are huge keys to startup success.
10. Great founders are passionate, born builders.
You won’t find a great bootstrapped founder in quarterly meetings or week-long product roadmap sessions. If a great idea for a new feature or 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 time frame because it’s valuable and fun.
Great founders don’t need board meetings, massive roadmap discussions, or 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.
Because founders are 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.
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 trouble.
11. Great founders are great communicators — and they know that ultimately means being a great listener.
With customers, good founders are 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.
The best 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.
12. Great founders care about what happens to their businesses after they exit.
Sure, founders 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 – not necessarily because you’ll pay the highest price.
13. Great founders come in many different 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 consistent 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. Rather, 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 encounter.
Beyond the Norm: SureSwift is Breaking New Ground with their Unique Business Model
Since 2015, SureSwift has been pioneering a unique approach to Software as a Service (SaaS) investment – allowing Investors access to a diverse portfolio of SaaS businesses that we acquire, hold, and grow with our team of exceptional operators. In this article, we dive deep into the SureSwift’s unique business model. We’ll discuss our strategy for buying and growing profitable businesses as well as what Investors can expect when they invest in a SureSwift fund.
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