I’ve met my fair share (and then some) of software entrepreneurs – and would-be entrepreneurs. In thinking back on those I’ve met that I would consider “successful” (i.e. have built successful companies), I’ve found there’s a pretty recurring set of “patterns” amongst the successful and not so successful.
The items below are more about correlation than causality (i.e. manifesting one or more attributes doesn’t necessarily cause you to become a great software entrepreneur, but in my experience, those that manifest these attributes, in my experience, have a strong correlation to long-term success). Inversely (and very coincidentally), I’ve found that many people that you would have thought would make great software entrepreneurs ended up not doing so. In each of these cases, I’ve found that they were missing over half of the attributes below in some significant way. One of the big impacts of the dot-com bust was that it gave many mediocre entrepreneurs an excuse for not having succeeded. This is the classic “I’m great, my company was great and my idea was great – if only the market hadn’t collapsed”. And yes, I’ll concede that many great entrepreneurs also got taken down with the market, but I’m going to argue that many of the software entrepreneurs that failed in the wake of the bust would likely have failed anyways (in a “normal” market).
In any case, here are my signals of software entrepreneurs with a high probability of success. Note: I have a bias towards “technical founders” (i.e. software company founders with a technical background). However, I’ve met some great entrepreneurs that weren’t technical – but were able to join up with someone who was – and who would have also met most of the criteria below.
Top Signals of Success for Software Entrepreneurs:
- You like to experiment: You like to play with new software. You’re one of the first people to try new software (like Google Desktop Search, Yahoo! 360 and Microsoft Live)) within a week of its introduction. You end up using < 1% of these applications over the long-term, but still love to “play with new stuff”.
- You like to read and learn: You tend to read a lot. A combination of blogs, books, magazines, etc. You like to read on a variety of topics (marketing, technology, sales, strategy, etc.).
- You like to tinker and build: You tend to want to solve problems in a better way than is out there. You customize, you build extensions, you write scripts, you improve. You like to build things. You can start with nothing more than a computer and a compiler and create something that generally works.
- You are opportunistic: You’re always looking for leverage and an opportunity to create (and capture) value. You measure ideas by their ability to create something meaningful. Though you may not be obsessed with money, you’ve got a healthy recognition of the fact that money makes the world go round (and helps you have the resources to do what you love).
- You are an artist: You love having an audience (users). You’re fanatically obsessed with delighting your audience (users) with software that surprises them in positive ways. You like to continually improve. You take pride in your work by investing in great design that will withstand the test of time.
- You Live On Email: You tend to prefer email as your preferred communication vehicle. Though you see the merit and value of in-person meetings (and in some cases phone calls), you would much rather have 90% of your communications over email as you believe it makes you more productive. Your average response time on “emails that matter” is measured in hours, not days.
- You are considerate, respectful and nice: You tend to respect other people’s time, and show up on time for meetings. When you meet with someone, you pay attention. You don’t abuse the fact that you may have the upper hand in a given situation. You are considerate and empathetic and generally have a high emotional quotient. You tend to genuinely want to help people (even those from whom you are unlikely to receive anything in return). You are kind to animals and children.
- You have a proclivity for action: You are more likely to act than analyze, plan and obsess. You tend to “jump in” and do it and deal with consequences after the fact instead of figuring out precisely the right path, right product, right market, etc. You’d much rather ship a product that’s not perfect than try and spend another two weeks perfecting.
- You attract others like yourself: You tend to have a great nose for talent and your passion is infectious enough to attract them to your cause. You like to hang around other people that are as smart (or smarter) than you are. The thought of feeling threatened never even crosses your mind.
- You are a realist: You tend to look at most things objectively. You see them for what they are. You have ambitions, but not unrealistic ones. When in contentious situations, you’re usually the voice of reason. You keep things in context and tend not to over-react.
- You are exceptionally intelligent: Lets face it, software is a mind sport. Software as a business even more so. I’ve never met a successful software entrepreneur that I wouldn’t classify as being “well above average” in terms of intelligence. I’m talking about raw intellectual capability here (which may or may not have translated into great grades, exemplary test scores, or other “standard” measures – those these certainly don’t hurt).
- You are fundamentally likable.: People want to help you. Customers want to buy from you. Employees want to join you. Generally, people tend to return your phone calls and emails and they tend not to avoid you at parties.
- You exhibit “balanced frugality”: You tend to have a reasonable and rational approach to expenses in your business. But, its not frugality applied evenly across everything. You’re not always looking for the lowest price or best deal in all cases. In areas that matter (like the product!), you tend to spend what is necessary (and what you can). You also tend to let other people make money too (something about the karmic startup cycle). You avoid the temptation to “do everything yourself” using cost-savings as an excuse. You place value on your own time (even though you may not be paying yourself out of the company yet).
- You work hard: You’re an over-achiever. You’ve never been satisfied delivering the “minimum”. Though you understand the importance of work-life balance (you read about it in a book somewhere), you’re not frequently able to pull it off. When in a group setting where work is divided you somehow always do a disproportional amount of the work.
- You just love the game: You’re grateful to have the opportunity to do your own thing, create neat software products and serve customers. You love the adventure and the thrill and are not hung-up on the rewards (though some of those would be nice too).
That’s it. Once again, remember, these are just “patterns” I’ve observed in many of the really successful software entrepreneurs I’ve met. Obviously, simply responding to email within minutes or reading the top 10 business bestsellers each year will not cause you to be a successful software entrepreneur. But, if you manifest most of the above attributes, you are generally more likely to succeed than not. You’re the kind of person I like to invest in (and I’m sure other investors feel similarly).
Notice the stark absence of the idea, or the hockey-stick financial plan. In my experience, simply having a great idea is not correlated with success. That is, I’ve met many people with great ideas that haven’t built great businesses and many people with not-so-great ideas that have done really well.
So, I think the software industry is desperately seeking great entrepreneurs. Are you one of these people?