Using complementary intelligence types to build stellar startup teams
I have spent ten years working at the multi-stage, global venture firm SOSV, and in that time I've assessed or coached nearly 4,000 founders from 1,000-plus start-ups. 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 healthy, complementary relationships among the founders is one of the single biggest determinants of success. And 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 U.S.S. Enterprise from the Star Trek series: 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 Start-up 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.
Over the years, it has become clear to me that healthy, complementary relationships among the founders is one of the single biggest determinants of success.
How do we identify winning CEOs and founders?
The SOSV data below was gathered from over 4100 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), followed by Dr. Crusher (63) and 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. And they are much less inclined to resemble La Forge, fussing over the Enterprise's engine room, or Dr. Crusher, in the sick bay, tending 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. And the CEOs at our top 50 companies (those with the highest valuations to date) score a further 2 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.