These days, a lot of people think it would be a great idea to become a co-founder.
One reason for this high level of interest and entrepreneurship is that a lot of people love the idea of becoming their own boss. In addition, some founders become quite wealthy when they sell or otherwise exit their business. Who doesn't like the idea of making a bunch of money?
Unfortunately, becoming a successful entrepreneur is by no means guaranteed. The type of company that founders create has a very high failure rate of up to 90%. There are many reasons for this, but one of them is that not every founder has what it takes to grow their company into a household name.
In this article, we will look at what it takes to become a successful startup founder. We will consider the level of commitment to required, the type of skills that you will need, and the personal characteristics that help founders succeed.
Personal characteristics and “soft skills” of a successful founder
Besides having dreams, startup founders need to have certain personal characteristics. These characteristics help them make the move into entrepreneurship and propel their companies into success.
Founders have a high level of confidence
An essential part of being a founder is believing in your ideas and your new company. However, this begins very early, even before you spend that first dime on developing your business. The reason for this is that as a founder, you will face a lot of doubt, a lot of rejection, and a lot of frustration.
For example, Many people do not understand why you would want to leave a high-paying job with steady benefits and a guaranteed salary. They understand why you would leave for a better job of like type, or even to undertake family responsibilities or similar reasons, but they don't understand giving up financial security for a dream. Unfortunately, many people do not keep their opinions to themselves, especially friends and family.
You'll probably face a lot of questions and a lot of self-doubts. Are you really acting in your own best interest? Can you really succeed? If you are not confident in your gut that becoming a founder is the right thing for you to do, you probably shouldn't do it.
Founders are not afraid of failure
Even for experienced founders, pouring your heart and soul into something that is uncertain it takes a lot of courage. There's a reason why becoming a founder is risky: many people have spent years of their lives chasing a dream that never materialized. Or worse, they lost everything by going bankrupt in an attempt to save their company.
Similarly, most founders fail at something. It could be something as simple as not achieving their directive immediately, failing to meet important goals or even failing as a boss. If you are a perfectionist who cannot brush yourself off and try again after each failure, you likely don't have what it takes to be a founder.
Founders are willing to commit their own resources
as the saying goes, they put their money where their mouth is. In other words, a successful founder does not shy away from spending their own money to make the company a success. Sometimes, this is a relatively small sum, but in other situations, a founder might take out large loans or cash in their 401K.
Likewise, a founder must contribute long hours and a lot of expertise to start their business. This involves using their professional skills and pouring their heart and soul into turning their dream into a reality. While it's never a good idea to neglect family and friends, your new business will likely take precedence over other considerations. If you've ever had a boss that works nights and weekends, they are a lot like the founder. Chances are that they work this way due to a high level of commitment.
Founders know what they, and their ideas, are worth
Although they’re taking a huge risk with their careers, founders should never sell themselves short. This means that they shouldn’t sell their ideas for less than they are worth because in doing so, they’ll reduce their wealth if the company succeeds.
Similarly, a founder needs to know the fair valuation of their professional work, which will become more critical as the business grows. A founder usually makes much less than their value in the short term despite this value.
Founders know how to sell
Whether a founder is trying to sell his product, convince people that he has a good idea, or raise capital, the sales process is constant. For one thing, a founder has to convince those early employees and Co-founders to join the project. This start-up team will frequently also give up a steady job with guaranteed income for something less certain.
Likewise, a founder needs to convince people to part with their hard-earned cash. Whether that's in the form of purchasing a company's products or services, making an investment, or providing venture capital, each of these commitments represents a leap of faith. Furthermore, someone who puts money into a start-up needs to be convinced that their investment in the company will provide value over time.
Founders learn from their mistakes and value feedback
Successful founders do not start their businesses thinking they have everything perfect immediately. There are a lot of unknown factors when you start any business, whether it's a vegetable stand or a future multinational. However, successful founders will learn from their mistakes. Whether it’s miscalculating on product pricing or saying something that gets misconstrued, founders know when to say sorry.
Similarly, a good founder will have an open door policy or a way for staff to air grievances. A startup often has a workaholic culture and a lot of uncertainty where people are afraid to speak up. By letting people speak openly, a founder can identify and correct issues early on before they become a significant drag on the business.
Founders have mentors, or at least someone they can ask for advice
Even experienced founders have an inner circle, and these shouldn’t all be employees or co-founders. One reason for this is that a founder needs someone that they can discuss their ideas with and get feedback.
Ideally, a mentor should be someone who’s started a company before. For example, in the younger generation, someone like Mark Zuckerberg would be a good mentor for tech founders. Zuckerberg has taken a creative idea and turned it into one of the biggest tech companies globally.
Likewise, founders need consumer-level or third-party contacts with whom they can discuss ideas. That’s because founders are very committed to their product idea but don’t always understand what makes it unique. In other words, an idea can appeal to a visionary who knows that the concept will change the world. But that same visionary needs to perfect the idea and make it desirable for relevant consumers, or the company is doomed.
Founders know how to validate ideas
Unfortunately, great ideas don’t always sell. Sometimes, it’s because the solution doesn’t solve a customer’s problem as well as you might think. In other cases, people might not understand that there’s a problem.
Here’s an example. Right now, many new tools help companies automate their procurement. These programs help solve a significant problem because procurement is a labor-intensive and slow process if you do it all by hand. When the first tool was developed, the company founder would have spent much time demonstrating that the product was marketable. Most people wouldn’t have questioned that automation of these manual tasks could reduce labor costs.
Validation is an important aspect of starting a company because when you develop any product, you run the risk that it won’t sell. Alternatively, you might have product features that consumers don’t like, and that could sink your efforts to sell the product. If your product fails in the first round, chances are that it’s game over for your business.
Founders have a good business sense (usually)
Great ideas are one thing. Turning a profit selling products based on that idea is something else. For one thing, it’s easy for a founder to misjudge the value of their product or to fail at managerial tasks. There are a lot of people with great ideas who never make a profit off of them, either because they don’t try or because their efforts fail. A founder knows how to turn their ideas into gold.
With that said, besides sound business principles, there’s no single way to make money from an idea. There are different business models that a company can use, other pricing methods, and even variations within a product type.
Similarly, a successful founder knows when to make major changes in their company. For instance, they might need to change prices due to rising costs, or adjust the price to meet what people are willing to pay. Hiring new staff at the right time, or even performing layoffs, can also be difficult decisions. If they don’t feel confident making these decisions, a founder knows when to get help.
Founders surround themselves with great people
Similar to having mentors, great founders know how to assemble a great team. It’s impossible for one person to be good at everything, so a founder will find great people who have complementary expertise. For instance, someone might be a great marketer who wants to develop a new marketing tool but they aren’t good at coding. In this case, the founder will find a great web development team. Founders also find great administrators, marketers, and other professionals to round out their staff.
Great people don’t have to work for the company full-time, however. Sometimes, good consultants and even independent contractors can help a company founder develop a thriving business. Not only do they specialize in an area of expertise that the founder needs, but they often get paid by the project. This allows for flexibility because the fledgling company only buys what it needs instead of being saddled with fixed expenses.
Does every successful founder possess all of these characteristics?
Well, no. Some founders lack, such as the ability to take criticism. Elon Musk is famously difficult to work for. Both SpaceX and Tesla have less than warm company cultures. However, people love to work there for the innovation and creativity that’s helping to change the world. Musk’s business sense has turned both companies into powerhouses worth billions of dollars.
In addition, some founders don’t have very good basic business skills. Many innovative brands were developed by people who had a great idea but may not have dreamed of starting a company. Instead, they started out to solve a problem for customers. These founders find top-quality marketing and management experts to make the business a success.
The most important feature of a company founder is an entrepreneurial spirit. This drives people to leave their jobs to pursue a dream. And arguably, each founder must be able to “sell” their idea to others because people need to join a company for it to grow. When choosing new employees or partners, the founder can find people with the hard and soft skills they lack. Everyone can then work together and make the company a success.