Alan Clayton
I have spent 10 years working at the multistage, global venture firm SOSV, and in that time I’ve assessed or coached nearly 4,000 founders from 1,000-plus startups. We start investing at pre-seed, when the founding teams are very small, sometimes just the founders themselves.
Over the years, it has become clear to me that one of the biggest determinants of success is healthy, complementary relationships among the founders. It’s no surprise at all that 60% of all failures in new ventures are due to team conflicts.
At SOSV, we use a tool called Herrmann Brain Dominance Instrument (HBDI), to help the founders better understand themselves and their team members. SOSV requires its employees as well as portfolio company founders to take the HBDI assessment. We have also compiled data on all the HBDI results from our founders over the years and discovered some very clear trends among founders, especially CEOs and CTOs.
But before we get to the data, let’s review what HBDI reveals about a person. It answers the question, “Which of the multiple ‘intelligences’ available to me have I come to rely on over the years, and what are the consequences?”
My shorthand way of explaining how this instrument works is to use the leadership team of the USS Enterprise-D from “Star Trek: The Next Generatrion”: Captain Picard (boldly pursuing the mission), Data (tirelessly taking the analytical view), La Forge (responsible and attuned to technology’s limits) and Dr. Crusher (always monitoring the crew’s mental and physical well-being). For those who are not Star Trek fans, think optimist, analyst, realist, therapist.
The HBDI framework provides insight into a founder’s preference for each of four critical Star Trek mindset quadrants, or value clusters, if you will. This takes us beyond assessing mere skills but stops short of diving deeper into personality. Values trump skills every time. I agree with YC’s Sam Altman, who says, “Attitude is more important than experience” in his Stanford startup talk on team and execution. With HBDI, we have an actual tool to identify and develop it, which scores attitudes from 0-150 for each quadrant.
How do we identify winning CEOs and founders?
The SOSV data below was gathered from over 4,100 founders, representing 75 nationalities and a variety of functional roles (CTO, CEO, CMO, etc.). When we average the scores across that group, the quadrant distributions are Picard (85), Data (76), Dr. Crusher (63), La Forge (62).
The higher the score, the more “value” an individual places in that quadrant. Clearly, founders are very Picard-like, which means they are visionaries, stubbornly committed and optimistic. They are much less inclined to resemble La Forge, fussing over the Enterprise’s engine room, or Dr. Crusher, in the sick bay, tending to the crew.
What if we look at only the 455 CEOs in that dataset? They are usually founders, but certainly not all founders are CEOs.
What the data reveals is the early-stage startup CEO represents a 13-point jump in the Picard HBDI score. The CEOs at our top 50 companies (those with the highest valuations to date) score a further two points. Clearly, the winning personality type for early-stage leadership is the stubborn visionary. It’s also worth noting that the realistic mindset represented by La Forge drops 10 points, which can mean trouble for the COOs tending the engine room. But that’s not the full story either.
These Picard-esque leaders ultimately don’t succeed without compensating for the values in play across the rest of the leadership team. There is overwhelming evidence that cognitively diverse teams have the advantage when it comes to solving problems, boosting innovation, and delivering better results, and that’s what we help founders understand right from the start as they work with their co-founders and start building the team.
The second most pronounced score among founders is the highly analytical quadrant, represented by the android Data. When we look at 190 founders who play the CTO role in our data sample, the Data quadrant score jumps 17 points. You can see where this is going. The analytical CTO tells the visionary CEO that the big vision is not attainable by any known means. Conflict ensues — and hopefully a resolution in the form of an innovative new product or service.
It’s worth noting the 10-point drop in the CTO founder’s Dr. Crusher-like qualities. The CTO is below founder average in terms of relating to people (Dr. Crusher), just as the CEO founder is below par when it comes to realistic management expectations (La Forge).
As the saying goes, “Simple awareness is often curative,” so the act of simply laying this data on the table begins to impact the way we develop the culture of a team. If we can coach the optimist (CEO) and the analyst (CTO) to reach genuine awareness and appreciation of their different values, we’re off to a solid start. Often it’s the elementary things such as differences in communication styles, realistic versus optimistic decision-making and a clash of fact versus fiction in presentation styles that cause conflicts between key players. HBDI results also help others around the quadrants in terms of what to expect from their colleagues. It also helps the founders strengthen their first-generation team by consciously seeking out senior talent that balances the leadership’s values.
Scale the team with personality and values in mind
The seed-stage CEO is a “jack of all trades, master of none.” But as the team grows from a family of three to six to a tribe of 15 to 20, the Series A CEO role becomes increasingly a people-management role. At that point, street smarts need to be tempered with a good deal of social smarts, one of the less preferred mindsets of our original top CEOs. The role also becomes more outward facing, engaging with investors, customers and partners.
That usually means the founders need to recruit someone socially smart, a Dr. Crusher, into the founding family, likely as head of sales and marketing. It’s important to recruit not just on skills or experience, but to keep their values front and center as well. The other common gap in an early founder team is La Forge’s practical, responsible mindset. That’s why startups are famous for delivering late and over budget. Optimism needs to be balanced with realism if trust is going to be established with investors and customers. Unkept promises add up, and the firm’s reputation is at stake. So an early, important recruit is sometimes a COO, chosen again as much for their skills and experience as for their cultural fit.
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