Bloomberg Línea Ideas — If spending Friday nights researching unfamiliar topics sounds like fun, you might have what it takes to help build a trillion-dollar startup.
That’s how Paul Judge, managing partner at Panoramic VC, used to spend weekend nights in college. Judge has co-founded three companies and invested in scores of tech startups. Like every successful entrepreneur I know, he has an unquenchable thirst for knowledge, grit for solving hard problems, and the passion to pay it forward. These three fundamental qualities, combined with gratitude, make unstoppable entrepreneurs.
Here are some tips Judge shares on how they go about building something from nothing.
Win yourself over first
A big mistake I’ve seen entrepreneurs make is trying to woo investors before being 100% committed to their startup idea themselves. Founders must do their due diligence and know that the problem they are trying to solve is big enough. The bigger the target market, the easier it is to succeed, says Sergio Furio, founder and CEO of Creditas, one of Latin America’s current unicorns. If you have less than a trillion-dollar market, he says, one mistake can kill you. A bigger market offers more room for error. Founders also must be certain they care enough about the problem to dedicate the time, passion, and sweat it requires to build a unicorn while knowing that most startups fail.
Once convinced, team building begins. Startup teams are not mere employees. “They’re a tribe,” says Shu Nyatta, managing partner of the SoftBank Latin America Fund. When you start, you need an Olympic team of generalists, and, as you scale, you need the best team of specialists. Going after huge markets means others will be chasing a similar solution. To stay ahead of the fierce competition, founders need to hire the very best.
Next, you need to convince the first customers. Only after you have committed customers do you try to convince investors that your solution is worth scaling and worthy of investment.
Think like a fireman
Getting ahead in startups demands perpetual curiosity and grit. “Whenever you see the toughest thing the company is facing, if you run toward that like a fireman, that’s where the best learning is,” Judge, also an investment committee member of SoftBank’s SB Opportunity Fund says.
So as a leader, ask your team what problems they are trying to solve and offer to help wherever possible. Don’t shy away from the toughest problems — that’s where one can add the most value. “If you’re going to put the effort and days of your life into solving a problem, you may as well go solve the biggest one you can find,” Judge says.
Use your air supply wisely
Scuba tanks have only so much air, and divers know to not go further than their tank allows. It’s the same for startups: Founders must set a goal for each funding round and maximize the size and scale of their desired outcomes. “Funding buys you time to get you to where you’re going,” Judge explains. But it’s just the gas, not the destination.
Focusing solely on the goal for each round prevents entrepreneurs from getting distracted and running out of cash. It’s also a helpful approach for later when startups move beyond the survival stage to focus on growth.
Whether you’re working for a startup or launching the seed funding round for your own, remember that “the hustle will outperform intelligence,” Judge, an instructor at the SoftBank Group Operator School (SBOS), says. This means you can control your hustle, and you can build intelligence around you if you have ambition and drive. At the end of the day, an idea is worth nothing without execution.
So don’t be intimidated if you don’t know something. You can hire the right person to address that needed skill set. But only you can control how much effort you put into the enterprise.
The best entrepreneurs are go-getters as much as they are grow-givers. Their companies and impact increase by learning from others, investing in other entrepreneurs (usually those who at one point were part of their companies), mentoring others, and sharing their challenges and solutions. The more you grow as an entrepreneur, the more you should give, the more you get back, and the greater your multiplier effect.
This column does not necessarily reflect the opinion of the editorial boards of Bloomberg Línea, Falic Media or Bloomberg LP and their owners.