The tech startup world is incredibly exciting. But it’s also insanely competitive.
One of the biggest obstacles for most tech startups is securing venture capital funding.
Only a tiny number of startups will win VC funding. Even fewer will actually succeed without it.
Heck, before securing funding for my company, I was rejected. A lot.
So what separates the unicorns (winners) from the donkeys (losers)?
To find out, I asked a VC.
Read on for some great tips and advice from Hodges.
What’s exciting you the most in the tech startup world right now?
We have a developing interest in both human-robot interaction and the ethical considerations that accompany the evolution of A.I. Julie Shah at MIT is doing interesting work on the former, and Kate Darling has conducted fascinating research on the latter.
We’re the midst of a massive societal transformation, and robots are slowly becoming present in almost every aspect of our lives. We can’t fight it. Instead, we need to understand how we’ll coexist, facing our responsibility head-on to ensure that robots are equipped to make critical decisions.
What traits do successful tech companies share?
Startups are full of twists and turns. Some of the best companies I’ve seen are agile and invest in ensuring their teams are continuously aligned and rowing in the same direction.
People will amaze you with what they’re able to achieve when they have your trust and the autonomy to make decisions. But to be successful, they also have to have a clear understanding of what they’re aiming for and why it matters.
It starts with being purposeful about the culture you’re building from day zero, and continues with being intentional about communicating how your business and its needs are changing.
When done right, this kind of open communication lets you tap into the best ideas from every pocket of your company.
What is the biggest mistake a tech entrepreneur could make today?
Building heavyweight technology that doesn’t serve a purpose.
Growing a successful company requires a fine balance between having conviction around where the market is heading and listening to customers to solve for the real pain that exists today.
Too often, founders start with a big idea or develop a new technology without considering whether it has a meaningful application and corresponds to a real business opportunity.
Some of the best founders and researchers I know are the ones who have a profound understanding of a market and deep empathy for a specific customer pain point.
What attributes and skills do leaders need to succeed in the startup world now and in the future?
At Pillar, we look for entrepreneurs who have the ability to create a swell of momentum around an idea that magnetically draws people to them.
Building a successful company requires getting the right people on board–recruiting employees to join your team, convincing advisers to lend their support, selling to customers. People want to rally behind leaders with an inspiring vision.
Successful founders have the ability to sell their mission, developing relationships with people who elevate their game. They’re people who blow through walls in the face of adversity and actively seek out advice to broaden their perspectives.
What’s the best piece of advice you ever gave to an entrepreneur who wants to be a great leader?
No one builds a successful company alone–surrounding yourself with the right personal board of advisers can make or break you.
Living on “CEO island” is a lonely gig; no other person in the company carries the same weight and responsibility.
A diverse group of trusted mentors, sponsors, and coaches (subject matter experts) is critical in lending both emotional and strategic support as you navigate different stages of growth.
Sometimes, there are things you just aren’t ready to bring to your board, and other times, you just need to get out of your own head. A personal board of advisers augments your own knowledge and experience, and provides a shoulder to lean on in tough times.
You’ve been a founder, now you’re a VC. What have you learned from being on the other side?
It’s so different! When you’re building a company, you’re deep in one area, consumed by your business day in and day out. In venture, you’re surrounded by founders tackling so many different problems.
My partner, Jamie Goldstein, has been in venture for two decades, and as I watch him in action, it’s truly incredible to see the breadth of knowledge and relationships he’s developed over the years. We’re constantly learning about new technologies, markets, and industries.
I’ve spent a decade on the operating side, so I’d like to think I have deep empathy for what it feels like to be in a founder’s shoes. Working with so many companies brings a new vantage point on the challenges founders face, and the strategies they employ to deliver value and win.
At the end of the day, though, we aren’t making operating decisions–that’s a big difference that can be tough. We brainstorm, we advise, we suggest, but in the end, the hard choices are up to the teams in which we invest.
The other major distinction is that our progress is measured in years, versus days or months.
In an early-stage startup, where you’re constantly shipping new builds, listening to customer feedback, and iterating, you experience milestones at a faster pace. In venture, we have to be really thoughtful about the best ways to support our founders–the results aren’t always immediate.
What advice would you give to aspiring tech startup founders who want to secure funding?
Successful companies usually identify a big disruption (a big wave) and jump on it. It could be a platform shift in an existing market or a new market entirely.
Being early on a huge wave–and knowing how to tell that story and deliver on it–is a big advantage.