Note: The full article on this topic first appeared on Mashable. You can read it here.
There is a lot of talk about creating “category-defining companies” in the modern business world. If you’ve ever heard a new company defined as, “we’re the Uber of….” then you know this to be true. Historically high valuations are rewarding immensely creative new technologies, but what does that mean for entrepreneurs? Should that change how you approach founding your company? It shouldn’t.
I’ve found four common characteristics in the founders of truly category-defining companies, passion sitting at the top of the list.
Here is what it takes to start and build a game-changing company:
1. Category-defining founders have true passion
Category-defining companies are typically built by entrepreneurs with a deep-rooted passion behind it. They are at a point in their life and career where building a company is a noble endeavor and a natural part of their life’s arc. Let’s look at Jack Dorsey, founder of Twitter, for example. Dorsey can trace the origin of the idea for Twitter back to his childhood hobby of listening to police radio scanners.
Compare this story to a few people sitting around a whiteboard attempting to find a new idea from a handful of pre-existing ideas. Unlike an entrepreneur who simply tries to replicate and alter an existing business models, founders with a deep connection to an idea know exactly what they need to sustain themselves when times get tough. If an entrepreneur lacks that passion, then what will nourish them to continue on, especially when it’s not obvious that they should?
2. Category-defining founders don’t set out to build category-defining companies
Passion, creativity and the boldness to do something different are the enduring ingredients of building a true category-defining company. Many of the great companies we think of as “life-changing” (i.e. Twitter, Facebook, LinkedIn, Skype, Apple and AirBnb) were not born great. They started as ordinary companies but became great over time. In fact, the companies that become category-defining are often ridiculed or misunderstood by others when they are first created.
The goal of building a category-defining company is not always a sustainable vision. If you become too concerned with fashionability, monetary gains, or social capital, you can quickly and easily lose focus, thus weakening your company.
3. Category-defining founders move forward relentlessly
The best entrepreneurs never give up easily. They’re the people who can wake up faced with nine reasons why they could fail, nine reasons why they should quit, and only one reason why they might succeed. It’s the entrepreneurs who can relentlessly focus on the one reason to press on that win.
A key characteristic of a forward-moving founder is self-awareness. They’re the people who know what they are and aren’t good at and believe that what they are building is bigger than themselves. With that perspective in mind, they seek to improve their company with every new hire. So long as you are not threatened by the prospect of hiring someone who may be smarter than you, you will be able to hire A-level people who can challenge you and the status quo, even if it’s uncomfortable at times. The other route is taking the path to mediocrity, which certainly does not create category-defining companies.
4. Category-defining founders are not stuck on perfection
Many people speak about the importance of the founding team — Avalon included. While this is a good conversation to have, there is one important caveat — there is no such thing as the perfect team. In fact, what defines the “right” team for you may change over time; it has to. Each company develops its own personality and culture from the start, and it’s rarely a perfect balance, especially as the company grows. At Avalon, we see this as part of our role to help put those team elements in balance as we help our portfolio companies grow.
What to do next
If you’re thinking about starting a company, now is arguably the best time to do so. However, doing it for that reason alone will not be enough to take you far. If your business idea is traceable to a deep story arc, you will discover your real motivation that is key to building a truly defining company. This should become obvious to you, but if it is not, you should take a serious look at why you are starting a company now. The passion that category-defining founders have is certainly contagious and it is this necessary, unquenchable flame that drives them onward.