【Founders: What's Your Why?】
Occasionally, when meeting with founders, we're often asked about what exactly we look for when investing in startups.
Is it a killer product? A scalable business model? User stickiness? Track record of success? Large addressable market?
Those are all certainly core facets of an attractive deal, albeit present across varying degrees. But one of the most important considerations that we spend a great deal of time trying to understand is the founder's Heart (among our core framework of Heart, Head, Hand), and more specifically the "why."
If COVID-19 is any indication, unpredictability and volatility can completely derail a startup at any given time. Although an outlier event in many respects, the outbreak is still but a microcosm compared to all the trials and tribulations that are bound to arise along a founder's journey.
If it's not a worldwide pandemic, then it's a co-founder abruptly quitting, a term sheet falling through, an inhibiting regulation, a competitor poaching top talent, a Google or Amazon entering your space, a loss of a key account, or perhaps a failed relationship or marriage--essentially a myriad of constant challenges that seem to do nothing but put your mental resolve and willpower to the test.
In tumultuous times, it's then important to always go back to your underlying reason for starting the company. As famously preached by the German philosopher Frederick Nietzsche, "He who has a why to live can bear almost any how."
For some, it's to scratch their own itch or solve their own problem. For others, it's to create a better world for their offspring and impact loved ones and those around them.
Regardless, the "why" is what will give meaning to founders' efforts in the face of adversity, allowing them to ride out rough patches and generate the conviction to see things through to the end.
Global restrictions on movement and trade have created unprecedented economic and operational challenges for companies across the value chain. Founders, use this time as an opportunity to revisit your why, clarify and affirm your reasons for starting a business. In this way, you'll have a stronger and more fortified foundation to capitalize on the upswing when things start to recover.
-Jun Wakabayashi
Analyst, AppWorks
