Co-Founders - How do you identify the seller and the builder?

Part six of my interview with Reed Robinson of Groove Capital and BETA

Casey:

And you wrote an article , for those that don't know, about the founder archetypes that you call sellers versus builders.

You stated, “Builders can learn to sell and Sellers can learn to build. However, the more we see, the more I’m convinced that the best founders gravitate towards the function that comes most naturally to them. And given that all startups are short on time, it’s best to have people focus their energy where they can make the largest, most immediate impact.”

Could you tell us about a time that the distinction wasn't obvious and what you did to identify the builder and the seller in that situation?

Reed:

Yeah, sure. There's a part of it that I left out in that article, which is from a venture capitalist perspective, I also don't want to invest in you learning how to do another one of those things.

I would rather you do what you're best at than pay and wait for you to build another skill, so that's the probably more aggressive way of describing kind of how that influences our investment decisions.

To your question, it's usually pretty obvious. I think at some point along the way I thought that there might be maybe the one in 10,000 that you bump into that might be capable of both. And I'm maybe less certain now that that actually exists. But I haven't made up my mind on that subject.

But if it's not obvious, which it is in most cases, then I'm thinking of one person right now that I'm not quite sure, then I'll ask them. I'll kind of give them the framework or the construct and say like, "This is kind of what we are interested in. Does this make sense to you? And if it does, which one do you think you are?"

Or we can kind of... on that same article on the list of qualifications, I can kind of figure it out depending on how comfortable you are with fundraising. If I can tell they're uncomfortable asking for money, then they're likely going to fall into the builder bucket.

So that's kind of a dead giveaway.

Casey

Okay, makes sense. And you had mentioned that if they were missing certain skills that it may not be worthwhile to invest as a venture capitalist to help them build those skills. If you ran into someone in that scenario, if you saw potential in them, would you recommend that they take certain actions to build those skills before they come back and pitch again?

Reed

I would say in most cases we're pretty direct and constructive to help them understand the way that we think and what we think they might need. But I think there's sensitivity to it because built within that feedback, it's very personal. You're saying things to them that they may not have realized yet or maybe somebody else hasn't said it and it can be and it occasionally is taken out of context or like you kind of say it one way but it hits them in another and then we can't control that, but it happens.

But I would say in most cases it's like... I'm thinking of one investment that was all builders and we had this conversation a number of times. It was like, you just don't have that other side of the equation. And it's just so obvious that it's stalling your sales, it's stalling your ability to invest. Go find that and add it to your team. We both can see the evidence of this thing, but I would say if you're mature and you're kind of in this game with the right kind of strategy, you're going to take that and you'll adapt. If you believe what we're saying is true or that's your opinion.

I think we'll just keep doing what we do, and they could be right as well.

It's not like it's impossible if you don't have one or the other. I just think your likelihood of success is lower.

Casey

And I think you mentioned in the article that there's been cases where you've helped introduce a builder to a seller or a seller to a builder. Is that true? Have you set up any duos?

Reed

I don't think any of them have converted.

But yeah, we'll do that from time to time where I'm making introductions and I'm hoping that's what happens but it doesn't always work out. In most cases it doesn’t.

Casey

Okay. So it's worked out in the past when it's more organic or they've already come in as a seller and builder pair or group that's complementary?

Reed

That's true.?