Must-Read: What Startup Psychologist Noa Matz Suggests to Win Investors
Noa, you have expressed previously you would recommend investors to invest in a good team rather than a good idea. What have you found to be the key qualities of a team you would recommend investors to invest in?
There are at least 20 qualities that I would state as significant, but I’ll share my top four:
1. We would want to see a passion among founders. Passion for the product, the pain and for creating a valuable solution.
2. We would also want to identify resilience. The entrepreneurial path is a constant struggle, posing daily challenges between failures and great victories. One must have durability in order to continue through the initial periods.
3. I would also want to make sure I’m dealing with coachable and open individuals who are humble and willing to learn. Being able to take feedback and adapting when necessary is important. I will look closely for a solid self-image and professional confidence next to the ability to acknowledge inadequacy. Meaning, their ability to say “I’m great at X but not as strong at Y – I could use some assistance”.
4. When it comes to the team element, I would want to see founders complement each other skill-wise. The ultimate situation is when each founder has their own unique area of expertise crucial for the company and their product. The wider the variety of specific abilities the merrier.
Speaking of being able to push through pain and struggle. Successful entrepreneurs are often labeled as workaholics and even psychopaths and other personality disorders. Knowing both sides, psychology and entrepreneurs’ mindset, how would you respond?
Well, a psychopath is a strong word and I wouldn’t use it in this context. Psychopaths are persistently antisocial, inherently egotistic, lacking empathy and remorse. Some entrepreneurs might restrain emotions and lack some basic social skills, but I wouldn't say they are in complete deficiency of compassion.
Have you found any confirmation to those labels thrown around in the media?
Generally, about personality disorders, it is interesting to know that research shows a strong positive link between engaging entrepreneurship and manic depression. By the hundreds of sessions I had with entrepreneurs in the past few years, I found a pattern of entrepreneurs reporting they are ‘going crazy’ – waking up in the morning feeling on the top of the world, eager to start the day, but by lunchtime they are in a deep low, at times unable to function. Their mental state can change drastically several times along the day, which causes this feeling of lacking mental stability.
Are these traits something to be wary of or aspired to?
Generally speaking, we should always aspire for mental stability, especially when living and working in such hectic and unstable surroundings. Having said that, the extreme genius we see with serial entrepreneurs – limitless creativity, capacity to think out of the box, real-time problem-solving abilities, etc – often goes hand in hand with other extreme personality characteristics, not necessarily as positive.
So when a person is thinking of founding a startup with their close friends or even a spouse, what should they keep in mind?The desire to start this kind of journey with a person you trust and love is highly common and natural, especially in a small and homely country like Israel. It could be an empowering experience for the relationship, but it could easily go downhill and destroy it. I would recommend making sure that there is a solid reason, aside from the convenience, to join forces with this friend, family member or spouse. You can start by asking yourself “Are we bringing different abilities to the table?”.
Estonia ranks high in Europe regarding the number of startups per capita. Can the stereotypical Estonian nature, next to an accommodating environment, be an advantage when it comes to entrepreneurship?
So what advice would you give to Estonians?
As far as I know, the typical Estonian tends to be more introverted, quiet, shy and will gladly forgo human interaction for a while. This could definitely be a problem, in a setting where you have no choice but to interact with potential employees, investors, and clients. As an entrepreneur, you have to sell yourself enthusiastically to all. If you won’t – your company will simply not survive.
An additional known stereotype about Estonian is regarded to their strong work ethics. This is definitely to their advantage since succeeding in entrepreneurship requires endless sleepless nights and never-ending work.
TeamDiligent performs empirical assessments for VC investors as part of the due diligence process, regarding the psychological capacity if startup teams, through the analysis of team dynamics and personality profiles of the founders. Noa Matz will speak more on qualities to look for in a co-founder and first team members at sTARTUp Day 2019.
PS! Early Bird tickets are available until 31st October 2018. Get yours here!