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On The Vows We Make To Startups, Best Not Forget Patience And Humility

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Zinhle Mncube | Sep 7, 2022

As a recently wedded man, it’s safe to say I’m in a honeymoon phase of my marriage. Sunshine glows out of my beautiful bride’s face, Labrador puppies run out with joy alongside her every time she enters the room and her heavy breathing when she sleeps is like calming rain (sorry honey!).

 

However, the process that led us to our engagement and eventual marriage was fraught with many a prickly situation that, at worst, culminated in the question, “is this it? This surely cannot be it.” It’s safe to say that both these questions were emphatically answered, and I could not have picked a better partner. But my point is that being fully sure about someone is a recipe that comes with a pinch of uncertainty.

Working with a startup at any stage of its life carries with it similar characteristics to that of the steps one takes to being betrothed to someone. It is filled with promise, disappointment, moments of fleeting hope and joy, rage-filled arguments, doubt and once the dust settles, with a healthy dose of good fortune, a matrimony of mutual minds working towards a successful business. With the work we do here at 22 On Sloane, through our Incubation and Accelerator Programmes, we are not immune to this comprehensive set of emotions. In my time with the team, I can absolutely testify that I have gone through them and as I reflect on this, there are two key themes that if applied, provide startups with a greater chance of success. The two key themes are patience and humility. Against a backdrop of pressures to be a sustainable business and to quickly scale, this may seem like antithesis to an investor or a programme’s business model but please allow me to run with this thought.

 

On Patience

 

In a 2021 TechCrunch report, it may take between 12 to 14 years for a VC Fund liquidate their returns as some startups are not able to realise exits within 10 years even if they have high exit potential. Take note that these are post-revenue startups. What more of a pre-revenue startup? This is not to say that we have patience for everything and everyone – sometimes you must choose peace and keep it moving. Patience is applied where we see promise and this can come from two sources: patience with the entrepreneur or patience with the proposed idea. It must be stated though there are some aspects that cannot be quantified that require gut feel. You would however want to keep a check on certain items and much of these are centred around the entrepreneur. Ask yourself, how often do they keep showing up to group or mentorship sessions? How often do they meet agreed upon milestones (however right or wrong)? When there are differing views regarding the startup what is their response, do they keep availing themselves? Responses to these questions give meaningful insight on the entrepreneur’s attitude and character which in turn is a great indicator regarding their success. Startups by nature are an illiquid investment. While technical competence is key, if it’s not built around perseverance, passion, determination, resilience, and just sheer stubbornness – annoying as some of these may be – then it all falls flat. If then the founder and their team show these qualities, like a frustrated lover, you may want to stick around a little longer before sending out messages of commiserations.

 

On Humility

 

The pressure that we all come across as people and organisations is this need to be seen to know everything. While at face value this thought can be (read should be) easily dismissed as untrue, subconsciously the need to be a know-it-all still pushes out like a weed in a flower bed. Kill that weed! The accelerator programme is comprised of a team of highly experienced and thoroughly capable professionals from a wide-ranging background. Despite this, they are not experts on all subject matters. They may be experts when it comes to the sectors that the startups work in but they may still not have the intricacies of their platform or the overall business model. I can even say the heart and soul of the startup’s vision sits squarely with the founders even if it is taken up and supported by the broader team or partners as crucial as investors. No one, no matter how knee deep we are vested in the startup, it is highly unlikely that anyone else will know the startup like the founders. Yes, there may be people or partners who are able to realise this vision or better articulate it, but we cannot escape the expressed and tacit knowledge that rests with the founders. Investors and programmes must respect that. I would be highly uncomfortable if I were to show greater knowledge about the vision than a startup’s founders. Imagine a marriage counsellor knowing your vows off by heart and saying them with greater gusto than the bride and groom? No sir, no way! Disagreements tend to sprout from this due to the partners feeling like the entrepreneurs are not fully taking in their views or decisions and, in some instances, may feel a strong sense of disrespect. Shareholders agreement clauses and reserved matters aside, I would implore as far as we possibly can, that a more subtle approach be considered. With humility comes a willingness not just to hear the entrepreneur but to understand where they are coming from. Our stances may be correct against what the founder believes to be true but how we convey that message may have to change. Instead of coming across like a finger-wagging parent, try to have your arm over their shoulder. Be a partner, a peer but do not be ‘The Man’ or the nanny. A chisel instead of a hammer. Approaching matters with a sense of authority will likely bring conflict (two bulls in one kraal) resulting in an acrimonious end to a startup that is still in its infancy. In his research on trading investors, UC Berkley Professor Terrance Odean found that overconfident investors tend to buy and sell more at higher rate than their fellow humble colleagues which causes them to lose more money and err in their decision-making. Something we should not look past at when working with entrepreneurs.

 

In Closing

 

There is a plethora of other important factors that make a relationship between a startup and her partner work. As in life, there are certain qualities in a spouse that are non-negotiable. These are qualities that make them worth the wait. When you have that found entrepreneur or startup; be patient with them and practice humility. They will fill you with regret, your hair may fall out and they will forget the odd deadline. But they keep doing the work, they put in the effort. They try. And as the old but classic Otis Redding line goes, perhaps ‘try a little tenderness’.

 

Zinhle Mncube, Investment Associate – 22 On Sloane

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