For the past few years, whenever I meet a new startup, I treat them like a rock band. Not only because I believe startups are rock stars, but because I have learned -- from my experience as the owner of an indie record label and as an early-stage investor -- that there are a lot of similarities between the two.
Bandmates
Every band has to have a lead singer and, in my opinion, a drummer. When it comes to lead singers, it doesn't matter if they can play an instrument, as long as they can sing, be the face of the band, have a stage presence and lead. This is just like a CEO. He or she doesn't have to be the best developer in the company, but needs to be the face of the company, inspire those around him or her and lead by example.
And the drummer? The drummer keeps the beat and makes sure everyone is in sync. In startups, it's important for everyone to be on the same page and have a unified vision for the company. The COO is the natural drummer of the company. In early-stage startups, the drummer is often also a co-founder.
Discovering Talent
When it comes to discovering talent, as an early-stage investor, I rely on friends to recommend their friends to me. I also get directly pitched by up-and-coming entrepreneurs who just solicit me. And then there are the times I just stumble across a startup randomly in my daily activities. My personal preference is for startups who are into Internet communications and those explore the edge of qualitifed self technologies.
When record labels scout talent, they usually send someone to clubs to see up-and-coming bands. While scouting, you learn early on to look for the bands who are unsigned who can attract fans to their shows and whose fans know the words to their original songs. The key to a successful signing with an artist is their fans.
The same thing goes for a startup. But, instead of spending late nights at rock clubs listening to new acts, I find my way to accelerators, incubators and at times cafes, where the next-generation startups are waiting to get discovered. What I don't wait for is "graduation day" for the accelerator or incubator, because by then it's too late for someone who likes to get involved early. What we also get to see by meeting the portfolio of startups in the current class are the current trends of the investment season.
Signing On
When I decide to move forward and invest in an early-stage startup, the experience at times feels like when a band gets its first record deal. For the startups, it's great to have people willing to invest in you, but now you have to work even harder to deliver and make everyone proud.
Just as bands can introduce new music sounds and be successful, so too can startups who are disruptive. A startup that's disruptive and successful can change the course of history. (Of course, it may take 99 no's before someone says yes -- the biggest source of failures in startups, and music for that matter, is giving up.)
The Secret to Success
Winning startup entrepreneurs need to feel confident enough in their own vision to find and follow their own path. It's okay to be driven. In my life, I have found success in areas I had no real-life experience in, just passion for something in the space. So I am the last person to think people can't be successful just because they don't have any relevant industry experience on their resume.
It's hard to get noticed when you sound just like everyone else, look like everyone else and go where everyone else is going. I look for startups that are confident enough to be unique and have their own sounds. I just hope they don't go off key in the process.