This lack takes down countless startups
Some years ago, I was invited by my friend Sonya Sepahban, a technology investor and Co-Founder of Propel Works, to the first startup event that she and the team of The LA Catalyst have produced for the vibrant startup scene in Los Angeles. It was here I was confronted with the overlooked competency that takes down startups.
The event was hosted by the Third Street Promenade Apple store in Santa Monica. The Apple Briefing Room quickly filled with curious and eager-to-learn entrepreneurs, all the way from brand-new and up-and-coming entrepreneurs with only ideas for startups in their pockets to serial entrepreneurs who had seen it all.
Entrepreneurs Learning in Community
The format of the event was interactive, in which the moderator, Dave Anderson, the other Co-Founder of Propel Works, asked questions of a roundtable of experts, with participation from the audience. The experts represented some of the foundational pillars for startups: Legal, accounting, marketing, technology, and also a successful entrepreneur.
The discussions became passionate when a built-up frustration with the entrepreneurial process was unleashed by some of the entrepreneurs in the audience, and the other entrepreneurs in the room tried to offer advice and support from their own experience. The LA Catalyst is all about sharing, growing, and learning together in the community.
What’s the Missing Magic
As someone who specializes in leadership mentoring, leadership development, and particularly in Conscious Leadership, I was struck by comments made by two of the roundtable panellists — Peter Mansfield, Marketing Expert and President of CMO.LA with 25 years of experience working with startups and Jay Crouch, Technology Expert, Co-Founder and CTO of K2teams (and agreed with wholeheartedly by one of the seasoned entrepreneurs in the audience).
They both mentioned an area of big frustration for them and others with whom they work in the startup world. That frustration is the overlooked competency of LEADERSHIP, or should we say — the LACK thereof.
What are Investors Looking For?
You see, you can have the best idea in the world for a startup, but if you don’t know how to manage and lead yourself, let alone work with your co-founders and lead your team, you are in big trouble.
What I have heard from investors is that they are looking not only for a great product or service idea but, more importantly, they are looking for well–grounded and well-rounded founders with developed people-skills and the abilities to build long-term relationships and pull together a high–performing team. Without those factors, the great idea is just another great idea.
Ego at Work
Peter Mansfield told a story of a co-founder who was spotted on his hands and knees, tape-measuring his office so he could compare its size to one of the other founders’ offices. Should we say EGO at work? Absolutely. Because the other co-founders didn’t know how to handle the incident, they simply began ignoring the man. They cut him off. You can imagine what that did to the team’s morale and effectiveness.
It is an expensive investment to have a full-time position being siloed and not contributing fully to what the team is doing. Obviously, this scenario didn’t end well — it’s an investor’s worst nightmare. This is not a crisis of knowledge. This is a crisis of leadership. No wonder the startup failure-rate is as high as 90%!
Young ‘Tech Wizards’
After the event, I spoke to Peter, who shared with me his opinion that there are too many startups birthing out of young, intellectually gifted, but otherwise clueless ‘tech wizards’. Even though these young people are totally brilliant, they are most often introverted nerds who know little about people skills or Emotional Intelligence, conflict resolution, or how to collaborate effectivel<span style=”font-weight: 400;”>y — they most often don’t even know how to manage themselves due to their young age!
They don’t possess an executive presence and therefore often have a hard time creating trust or even rapport with investors, clients, and employees who are older than they are.
And most likely they don’t know what their true purpose in life is — something which is considered integral to building a successful business as well as in maintaining the passion and fire within the founders and the team needed to sustain them in hard times. The purpose of the founders needs to be aligned with the purpose of the business and communicated clearly to all stakeholders.
In startups where there is an obvious lack of maturity and the overlooked competency of leadership, investors are increasingly insisting on placing a temporary executive in residence while the young founders are finding their footing in how to deal with people.
Likewise, I also hear that more youthful boards are missing Wisdom Leaders. Wisdom comes primarily with experience and thus usually with age. Therefore, it is always smart to have board members who bring both wisdom and leadership skills.
At the end of the day, everything hinges on this overlooked competency of leadership — our self-leadership, Inspirational Leadership of others, and Conscious Leadership of our businesses.
How are you doing in the cultivation of your leadership?
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Rúna Bouius is a former CEO and entrepreneur from Iceland and the founder of the True Power Institute. As a keynote speaker, bestselling author, mentor, and advisor to visionary leaders and progressive entrepreneurs, she is on the vanguard of the new-business-paradigm thinking, creating better workplaces, and developing the emerging leaders. Rúna is a co-author of the bestselling book, “The Successful Mind,” a contributing author to several other books and publishing platforms, and sits on advisory boards. She is a co-founder of several social-impact platforms, including the Conscious Capitalism LA Chapter and Coventina Foundation. She specializes in helping CEOs, and C-Suite leaders accelerate their journey towards greater consciousness and TRUE Power.