Given the low percentage of people who end up becoming executives, their must be certain qualities they possess in order to be able to be executives. This is true whether someone becomes an executive internally through rising up the ranks, or someone who creates a startup from scratch. Originally hired by Don Valentine in 1988, Doug Leone became a managing partner of Sequoia Capital in 1996, then global managing partner in 2012 until 2022 alongside Michael Moritz. His net worth estimates in 2022 was $6.1 billion. In his training of executives both at Sequoia Capital and as well as in seeking future founders’ companies to invest in, he has come up with just 3 qualities to look: vision, execution, and culture.
Vision
Vision refers to the plan that a person sees. The crystal ball read of the future, direction. A well-defined vision can often lead to a mission statement, and guides actions to be made towards those central visions. It can lead to a strong sense of purpose and intentionality. The more this vision is exceedingly contrarian and simultaneously, the more the founder, if successful, will be known as a visionary, pioneer, trendsetter. If the vision is contrarian and wrong, the founder will be known as crazy, madman, insane. If the vision is already known, or predicated in mostly conventional wisdom, then regardless if the vision is correct or not, the founder will not be known as a visionary. If that’s the case, then the only answer in the 2×2 matrix is to be simultaneously contrarian and right. In other words, they must see a vision of the future that few others see and stubbornly hold out into building that future that it eventually becomes a reality. Turns out you want the kid in the fable who cried wolf, except that the wolf is a good wolf, a white swan that benefits the future.
However, it’s also possible that the founder may stubbornly persist on a vision of the future that does not turn out to be correct at all. Here, this may come down to the VC firm in question with board seats to try and convince the founder to pivot. Given the overwhelming uncertainty to begin with, in some instances pivoting would make sense, while in other situations not pivoting and doubling down may make sense instead. This may then come down to a 6th sense, or in laymen terms, deep domain technical expertise that would guide the decision rather than relying on false intuitions or feelings.
Execution
Execution, aka getting things done. We can all talk a big game but if we can’t walk the talk, it doesn’t mean anything. Coming up with ideas is incredibly common, but actually carrying them out is much rarer. Not many can execute at a high level, so a founder’s track record could have some importance here. Previous successful startups sold at an elevated profitable valuation, outsized success, particularly early on that is relatable or translatable towards startups matter. Raw qualities of integrity, intelligence, energy can also affect the likelihood of execution. Those who can execute but lacking in vision are known in modern terms as a manager in a corporation, or at a higher level, an exec or operator. Execution without vision will not be sufficient in a founder, but would be in terms of hired help to round out the executive team. When the stakes are high in a startup, a lack of execution will be the end of the startup, having drained all the cash runway that exists.
Culture
If you don’t have culture, then you are known as an a**. Culture, establishing the inner values of how people do things starts from the top and seeps its way throughout. If a founder establishes a bad culture, it could consist of: authoritarianism, nepotism, micro-management, punishing mistakes brought forward, promoting those who kiss up to management, sugar coating negative news, not getting rid of toxic personnel that weighs everyone down and killing morale, not providing adequate compensation and thereby losing top performers, forming cliques and factions, play favorites, and many other problems. This kind of culture will slowly spiral like quicksand and eventually collapse. Take it from a former class 1 railway that I worked for that included a sexist manager who consistently berated anyone who made any kind of mistake. Fast forward, that team no longer exists and the manager is now fired entirely, only after many hires and quitting taking place. This might not take down a large corporation, but could mean the end of a small company if a crucial division is up in flames.
On the other hand, a good culture includes a collaborative team environment, people are more concerned about getting work done than who gets the credit, management has empathy and listens to people, people are empowered and respected, compensation is adequate if not above market average, expectations as well as work life balance are considered, taking time off is considered to prioritize health rather than seen as lazy, etc. In these cultures that can strike the balance between high performance and being sustainable over the long run, this can lead to an easier time hiring more competent staff leading to better performance.
Culture ends up being the most important factor out of vision and execution as it is the osmosis of the founder’s values expressed through conduct and behaviors taken or not taken. Toxic cultures can even negatively affect a person’s health irreparably through the long-term, while a good work environment can allow people to be happy, excited and not stressed out.
Disclaimer
This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.