JumpStart and other equity investors (angels and VCs) look for companies that are led by entrepreneurs and executives that have previously led a company from startup, through rapid growth, to a wealth-creating exit. This is one of the few founder characteristics that has been found to have positive relationship with the future performance of an early-stage startup and several studies have been published to support this view.
Outside of that, many investors look for specific behaviors or personal characteristics that they think correlate, at least, with a higher likelihood of success. This is a heated topic and very few investors agree on any one set of attributes.
In my last post, I introduced the idea of Adaptive Excellence. Someone with Adaptive Excellence has the initiative to take on new challenges, adapts quickly, and achieves excellent results time after time on a meaningful scale. However, this is an observable pattern of outcomes more than it is a set of behavioral characteristics.
Why do we look for signs of Adaptive Excellence? Mostly because outcomes are easier to spot than the character attributes (or combination of attributes) that produced those outcomes. Today, I'll discuss this idea in greater detail and share some examples that will help you spot it when evaluating entrepreneurial talent.
1. What is Adaptable Excellence? As discussed, Adaptable Excellence is not so much a set of behavioral characteristics, but rather, a demonstrated pattern of excellence in multiple, varied pursuits. By "demonstrated" I mean that a candidate's background shows at least three distinct and observable examples where they have achieved excellent results on a meaningful level. These do not necessarily need to be professional examples. In fact, people with Adaptive Excellence find it hard to turn "it" off when they are away from work.
Adaptive Excellence is not excellent results in only one thing or mediocre results in lots of things. That's not to say that people with Adaptive Excellence haven't experienced failure. In fact, to be adaptable, you have likely made your fair share of mistakes that have taught you to learn quickly from faulty assumptions, new information, and rapidly changing markets.
Example: Phil Brennan of Echogen Power Systems. Prior to starting his first company, Phil was the captain of his university's championship basketball team in Ireland. He was also a successful stage actor in London, Chicago, and Cleveland!
2. Can people from big companies have Adaptive Excellence? Absolutely. Successful growth entrepreneurs often spend a significant portion of their careers developing skills and discipline within a larger corporate environment. Many of the world's most successful large companies systematically encourage Adaptive Excellence by continually taking high-performers and throwing them at new challenges, often where the employee has no prior experience or expertise.
Example: Prior to founding Logos Energy, Kevin Berner had only worked for big companies, including one of the biggest companies in the world, the U.S. Army. After a distinguished 15 year career as an officer in the Army, during which he earned a PhD Economics from MIT, Kevin went on to lead McKinsey's manufacturing practice in North America.
3. What about non C-level talent... do they need to have Adaptive Excellence? Since pretty much every member of the team impacts its future prospects, successful startups try to have Adaptive Excellence at all levels and functional areas where critical thinking and individual accountability are part of the job. The same criteria apply, where their background demonstrates three, distinct and observable examples of excellence. However, you should compare these achievements to their peer group.
Example: Since joining Findaway World fresh out of Weatherhead's MBA program, Mike Belsito has held just about every position imaginable as the business developed from idea stage to a profitable, growing leader in the library audiobooks market. Mike developed Findaway's initial product offering to public libraries; helped the company enter new markets like continuing professional education and; took on the national sales manager role, growing that business by 50% in his first year. More recently, Mike has co-founded a company that created an iPhone accessory that is being distributed through national retailers.
4. What about recent graduates without work experience or track record? I get this question a lot. How do you assess someone's background when they don't yet have meaningful work experience? Surprisingly, perhaps, the same logic applies when looking at recent graduates - that they've taken the initiative to take on new, varied challenges and have achieved meaningful success.
Did the candidate achieve high academic marks while holding down a night job and founding the campus entrepreneur's club? Did they double major in Economics and 17th century Portuguese poetry while doing volunteer work for a local charity? Did they attend a top-flight school and play competitive collegiate athletics? These sorts of people are actually pretty easy to spot.
Example: John Knific of CitizenGroove is a perfect example of someone with very little work experience that demonstrates Adaptive Excellence. John founded CG while in college at Case Western Reserve University. Not too shabby, right? John also graduated magna cum laude, was accepted into Case's medical school, and performs professionally as a jazz pianist.
5. So now what? 
If you've found someone that looks like one of the examples I've provided above, congratulations! You've found yourself an A+ Entrepreneur. A+ Entrepreneurs have the ability to accomplish the work of 2-3 adequate employees. They make fewer errors, require less time to train and manage, get more done, and deliver great results no matter what challenge you throw at them.
However, it turns out that Adaptive Excellence is only one piece of the puzzle. When hiring, you are likely looking for a specific technical skill set or experience in a relevant market. This is critical, to be sure. If you need a biomedical lab technician, a salesperson with Adaptive Excellence isn't going to help much (at least not in the lab).
Just as important, you need to understand if this candidate is a cultural match to your young (and small) company. In a startup, you will spend 60-80 hours a week with a very small and close-knit team of founders and staff. Therefore, it is critical that everyone share the same Core Values and vision for what the company is trying to achieve. I'll spend more time in my next post discussing Core Values and why defining these early it is critical to your company's prospects of future success.
If you're thinking that Adaptive Excellence sounds like something rare and special, you are right. However, taking a company from startup, through rapid growth and value creation, multiple rounds of equity investment, toward and through a wealth-creating exit and creating a bunch of jobs along the way is tough stuff. Only the top 1% of startups have been able to achieve this sort of growth success story, but these best-of-the-best companies account for 40% of the new jobs created each year.
Next time... the importance of cultural matching when hiring key employees. In the meantime, do you want to learn more about hiring these A+ players? We're hosting a seminar on May 27th to help you learn more about just that - Hiring Smart: How to Hire & Retain A+ Players.