What makes a great seed stage founder
Issue 191: What to look for (and avoid) in early builders
When it comes to angel investing and advising, the seed stage is my passion and exclusively what I focus on. What used to be Friends and Family, Pre-Seed, and Seed Stage have sort of blended together. It’s the highest risk phase to invest but also the most rewarding. As Lee Child once said, “In order to win, you must be prepared to lose.”
At Seed stage, there is only one thing you can bet on—the founder(s). It's ridiculous to me when I hear people who say they're seed stage investors and looking for metrics of a growth stage company, avoid those folks. Founders need to be built different along the various phases of a traditional company growth arc.
Seed stage (pre-seed and seed): Building the product and learning to be a CEO along the way
Growth stage (A, B): Scale with the company as far as you can as a CEO
Late stage (C, D, Etc.): This varies. Some CEOs grow into the scale and others bring in a professional CEO when the time necessary comes. Both paths can result in a good outcome.
The great founders I’ve backed as an angel investor, advisor, or supporter have five core attributes: Focused on building, Customer-oriented in product development, Adaptive and openness to pivot, high technical acumen, and storytelling/demo skills.
Focused on building
The concept of building may seem obvious, but it's the obvious things that are the most difficult to focus on. Many seed stage founders get distracted by activities that are both necessary but can be distractions. There are early stage founders who view startups as a lifestyle. They are eager give up part of their company in order to have the runway to be seen in the scene. They don't care if their company fails because they'll go start another lifestyle startup and fail again. Great founders focus on building, almost to a fault of avoiding fundraising and networking.
Mickey Friedman at Flair.AI is a shipping machine
I met Mickey from mutuals on Twitter. I was so impressed with her focus on building. At the time she was just starting Flair AI and it felt like every week she was shipping a new feature. I heard from many firms and investors tracking the company; they really wanted to invest. However, Friedman was prioritizing building and shipping before all else. It's quite refreshing for a founder to be so focused on building at this stage.
Customer-oriented in product development
Being customer obsessed is a broad statement. What's important is being customer-oriented as part of the product development process. This might be initial need finding and discovery or getting usability feedback along the way. When you get to a certain level of scale, prod is going to be a great way to test. In early stage product building, getting continuous signal is essentially because time is the most valuable asset in seed stage. Founders who reduce the iteration cycle and get quick customer feedback extend their runway by knowing where to focus. One signal is when founders ask people about their problems and what they're trying to achieve instead of focusing on the product they're trying to build. Great founders ask what a potential customer's goals are and build around that.
Cara Marin at Stashpad starts with customers
I've had the pleasure of working with Cara as an angel investor, but even before I wrote a check, she was focused on the customer problem. I describe Cara as one of the types of software engineers I loved working with; focusing on the customer problem and being immersed in the research process.
Adaptive and openness to pivot
Adaptability is key to survive for founders. If a founder were uncompromising their vision like Jodorowsky making Dune, their idea will never ship to the world. I hold a different view that pivoting is not betraying your idea. It's finding out how the core of your idea can be useful to people.
(There are founders I know adapting and pivoting. However, I don't want to share a specific story since it might expose their strategy, so no story here)
Storytelling and demo skills
Demo culture is crucial for any company. For early stage startups, you’re doing it in high volume because of the need in fundraising, acquiring customers, and getting product feedback.
Dan LaCivita is a great storyteller
Play is the best way to design native iOS experiences. Dan LaCivita is co-founder and is always ready to give a demo of the product and the problem it solves for their customers. LaCivita also sweats the details of how a demo is done and opts for the most naturalistic experience vs. on a slide deck—on device. Play uses Apple App Clips as a way to demo their product. The experience is mind-blowing and delightful. Scan the QR code and you see the native app experience on your phone.
Technical acumen
It’s very hard to be a non-technical founder at the seed stage—many find themselves dead in the water. Technical acumen is a must for founders to go from idea to an early product. You don’t have to be a software engineer to be technical but must be intimately familiar with product development—a product manager or a product designer.
Lucas Dickey is a builder at DeepCast.fm
Though Lucas as an operator is best known for being a Product Manager, his technical range and ability build with others is what makes him a strong founder. Even though his Product leadership experience spans from the highest scale, he knows how to go down to the smallest implementation detail to ship and rightsize what’s needed for the seed stage. He’s willing to do design mockups himself or submit a pull request to ship a feature. Lucas is a great example of how technical acumen isn’t only for software engineers.
Founder friendly to great founders
Many firms emphasize how they are founder friendly or put them first—a tagline I am on board with. However, this doesn’t mean to support any founder out there. Whether you learn directly or indirectly, there will come a realization that not all founders take the work seriously or willing to do what it takes to be successful.
If you ever consider angel investing or advising, create your own rubric for evaluating founders. In case you’re wondering, founders probably have a rubric for evaluating you too. In my opinion, it’s a net positive to find a strong partnership.
Hype links
Devtools.fm: a podcast about developer tools and the people who make them
Webflow acquires Intellimize to unlock AI-driven website optimization → Congrats!
This camera trades pictures for AI poetry → Congrats Caro and Ryan