As a tech founder and investor, I have spent a lot of time thinking about why some startups scale and why others fail. You have to when your livelihood is riding on whether or not you can execute. And when you’re putting other peoples’ money on the line, knowing what to do and being able to do it isn’t enough, but you have to be able to explain your decisions and actions.
When I made enough money as a founder to start angel investing, I was overly focused on the idea and strategy. Why? The business I had founded with my twin brother Ryan Weber was successful in terms of financial returns, but it lacked defensibility. In my opinion, that’s what prohibited our business from scaling to an even greater outcome- we didn’t have a great idea or strategy.
Learning from this lesson from my own business, I compensated by investing in founders who had a clever idea and a good strategy. Sometimes it felt like I was just investing in a nice pitch deck. Many of these teams just could not execute, and over time, they’d fail.
You can be a brilliant founder, with a clever idea and a good strategy, and still fail. It happens all the time. If you can’t attract customers, build a team, and set and achieve goals, you’re sunk.
As a VC, I’ve had to synthesize everything I’ve learned about operating and investing into a scalable, repeatable process- to turn these lessons into actionable guidance for conducting diligence. Founders who work towards these things increase their chances of reaching an exit, and investors who look for these things increase their chances of generating a return.
These are the top 5 signs a startup will succeed.
1) The startup has founders with great soft skills. Having a great idea or writing some really kickass code isn’t enough to scale a big business. Soft skills are even more important than tech skills or industry experience. A founder/CEO’s job includes sales, recruiting top talent, management, etc. All of these are soft skills.
2) The startup has a culture of accountability, and is focused on key growth metrics. Creating a metric driven, accountable culture is challenging. It is easier to do with a 4-person startup than a large-scale growth business so it is a critically important early piece.
3) The startup is good at new product development. Teams that are good at product development are analytical and creative. They run experiments before building a complete product which enables them to avoid focusing on building the wrong product with the wrong features.
4) The startup is focused on finding and perfecting one scalable customer acquisition channel. Experimenting is expected in the very early going, but eventually you need to bet on the one channel that can get you to scale. It could be digital media-focused customer acquisition, a referral program, or viral social strategy, anything that creates compounding returns. You need to be world-class at whatever your dominant channel is to succeed. For most of the best startups, growth is designed into the product or some other kind of clever growth hack is utilized. Look at Airbnb’s famous spamming of Craigslist (Airbnb Growth Study (benchhacks.com)) or DropBox’s famous early referral incentives. This is the scrappy team, focused on the right things, that has found the right product, and a way to scale.
5) The startup has an adaptable, entrepreneurial team. Early-stage is not the time for a team fixated on management systems. The time for investing more heavily in management systems is when your startup approaches 20–50 employees or more. In the beginning, you need a team with entrepreneurial skills, including customer empathy, product engineering strength, and go-to-market strength.
For former founders-turned-investors like myself, we need to be particularly aware of not being overly attracted to clever ideas in big markets, but instead focus on identifying the teams that can find their North Star to take them from point A to point B so the startup has an opportunity to start compounding. Execution is everything.
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April Newsletter
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June Newsletter
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Demystifying Startup HR
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Head of Finance & Fund Administration- Venture Capital Firm (Remote)
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Demystifying Startup HR
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3 Portfolio Companies Make Inc. 5000 + Quicklly & Instacart Expand
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iraLogix closes $22M + Branch expands with Uber
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iraLogix closes $22M Series C
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Flywheel lands Gates Foundation grant
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Venture Capital Analyst
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Orazio Buzza, Founder and CEO of Fooda – on Episode 13, “Execution is King”
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$40M Fund II Raised!
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Eric Martell, Founder of Pear Commerce: Episode 13, Execution is King
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Great North Ventures Raises $40 Million Fund II
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Investment Thesis: Fund II Strategy
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Investment Theme: Community-Driven Applications
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Investment Theme: Digital Transformation Through AI
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Investment Theme: Solving Labor Problems
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Trends in the Gig Economy + Work in the Metaverse
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Portfolio raises $125M + talking fundraising with Branch CEO
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Omnia Fishing closes $4M round, joins Great North portfolio!
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Atif Siddiqi, Founder/CEO of Branch: Episode 11, Execution is King
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Michael Martocci, CEO and Founder of SwagUp: Episode 10, Execution is King
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Yardstik new to portfolio, closes $8M Series A
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First venture studio startup comes out of stealth!
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Insights for founders from a data guru, + FactoryFix raises a Series A!
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Una Fox: Episode 9, Execution is King
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Start With a Mobile App, Not a Website
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2ndKitchen acquired by SoftBank-backed REEF + advice from an early Googler
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Joe Sriver, 4giving: Episode 8, Execution is King
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2ndKitchen Acquired by REEF
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Venture studio startup jobs + advice for founders from founders
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Best Advice from the Great North Annual Event: Episode 7, Execution is King
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Newsletter: Do you fit our investing themes?
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Jonathan Treble, PrintWithMe: Episode 6, Execution is King
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Anna Mason, Revolution: Episode 5, Execution is King
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Mynul Khan, FieldNation: Episode 4, Execution is King
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Nick Moran, New Stack Ventures: Episode 3, Execution is King
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Molly Pyle, Center on Rural Innovation (CORI): Episode 2, Execution is King
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Justin Kaufenberg, Rally Ventures: Execution is King Episode 1
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Newsletter: “Podcast Launched: Execution is King!”
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“Execution is King” – the Great North Ventures Podcast
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Newsletter: Fund II is open for business!
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Unlocking the Potential of Anonymized Commercial Real Estate (CRE) Data
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Fund II is open for Business!
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Mike Schulte Promoted to Venture Partner
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New Name + New Venture Studio
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Great North Launches Startup Studio
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We Don’t Need No [full-time MBA] Education
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How the University of Minnesota is Embracing Startup Culture
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Top Stories of 2020, iraLogix, and LaunchMN Calls for Mentors
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Building Capacity for Innovation
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Seizing Opportunity in a Recession, Allergy Amulet, and Twin Cities Startup Week
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Recessionary times, a record-setting IPO, and Minnesota’s Resilient Startups
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Minnesota's Resilient Startups
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July 4th, Equitable American Dream-ing, and Robots Diagnosing COVID
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Jumpstart, the Startup School, and Branch Wins a Webby!
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COVID-19 Trends, the Great North response, and our Founders Survey
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Giving in the Time of Coronavirus
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COVID-19 Resources for Startups, State-by-State
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COVID-19, the CARES Act, and startups stepping up
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New Business Preservation Act
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Digital Future Boardroom, PartySlate, and The Lean Startup School
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Great North Labs’s Startup Summit 2020
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Great North Labs's Startup Summit 2020
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World Economic Forum, NoiseAware, and the Startup School reboot
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Great North Labs at the World Economic Forum 2020 in Davos
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Top 5 Stories of 2019
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Taking the Founders Pledge, Inhabitr, and gBETA Pitch Night
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Founders Pledge: Support the Organizations that Support You
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BETA Showcase, Greater MN, and Launch MN comes to St. Cloud
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7 Places to Spot Us at Startup Week
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The Greater MN Meetup, Parallax, and Exponential Medicine
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Greater MN at the big show, Neela Mollgaard heads Launch MN, and Misty’s roadtrip.
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Talking VC, tech kids, and Forge North’s Horizon
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June: Great North Labs’s first fund raised!
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May: Innovation Ecosystems, SingularityU Kickoff, and PrintWithMe
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April: Minnebar Recap, ZenLord Pro, and Supporting Entrepreneurs
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MinneBar 14 Recap
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Dispatch and 2ndKitchen claim Tech Madness titles
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Minnesota Innovation Collaborative
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March: Minnebar, Hockey + Hustlers, and Innovation Workshops
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Great North Labs at CES
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Dec.-Jan.: Top Posts from 2018, pepr, Glowe, and Misty Robotics
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Carried Interest: Top Posts from 2018
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Oct.-Nov.: Singularity University, Exponential Tech, and the State of Innovation
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Digital Transformation Summit, July 25th in Minneapolis
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June: Silicon Lakes, FactoryFix, and the Digital Transformation Summit
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Putting the “Silicon” in Silicon Lakes
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Digital Manufacturing and Logistics
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May: Team Genius, IoT, and the Future of Everything
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IoT 3.0
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Healthcare Innovation
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March: Exponential Tech, the “Goldilocks Zone”, and Minnebar 13
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February: Team Expansion, Dispatch, and Startup School Events
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Great North Labs Newsletter – December 2017
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A Letter To My Younger Self
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Great North Labs Newsletter
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Great North Labs Featured on Tech.mn
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Great North Labs Featured in St Cloud Times
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Great North Labs – Featured on BizJournals.com
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