Sunday, June 7, 2020 by John Sharp (Hatcher+) 868 Views
When I was in fourth grade I asked Mr Davis, my English teacher, what "intelligence" was. This wasn't just me being precocious - he had just called me out as being "obviously not very intelligent." My smug rejoinder to him was "define intelligent"...
He looked at me with the expression cats often use when surveying Labradors (or other lesser beings) and sighed, as there was obviously no hope and no point. And then he gave this response: "intelligence is the ability to deal with a given situation. The more intelligent you are, the more situations you will be able to deal with in life." And then he moved on with the lesson, probably convinced that this expenditure of breath had been a complete waste of time.
I tell this story for two reasons - to make the point that if you are an intelligent fourth grade teacher, you should never assume you are not having an impression (you probably are - even with the troublemakers) - and to illustrate a point that I think is often not talked about with respect to IQ. IQ is not some abstract thing. Whether you are a janitor or a technology founder (or both), IQ is a measure of how well you can use the knowledge and wisdom gained from your collected experiences to solve a problem, build and run a team, progress a strategy, defuse a crisis, or come up with a better, more efficient way of doing something.
Every startup demands that the founder use intelligence to solve a problem or set of problems in a new, innovative way. This doesn't mean that your IQ, as a founder, needs to be sky-high (there are many people with extremely high IQs that find their analytic skills to be a massive barrier, rather than an advantage.) But founders without a reasonably high IQ are rare - and are probably not going to survive the investment process (most successful investors I know are deeply curious people that adore learning about a new way to look at the world, as a precursor to making an investment) - or the post-investment execution phase.
So IQ, I think we'd all agree is an absolute must-have for a founder. But what about EQ?
Although I think I know what it means, I'm not a big fan of "Emotional Intelligence" as a buzz phrase. I don't think it properly captures what is required when interacting with people. Insights can be obtained and lessons learned even when there is very little emotion involved. Which is why I much prefer "Empathetic Intelligence" as the definition of "EQ" - as in, an ability to see the world as others see it, and act on the knowledge and wisdom that generates.
Recognizing emotions and being able to react and deal with them effectively does not necessarily create value or enable new ways of thinking or selling. Being able to put yourself in a situation where you can see through someone else's eyes the world inhabited by the disabled or sick - or those who lack access to resources the rest of us take for granted, or are stuck doing a repetitive task that could be made much less onerous... the insights obtained this way are often the most critical when it comes to generating solutions for intractable problems.
And it shouldn't just involve the problem owner... sometimes the inspiration for a better solution arrives because a founder adopted an empathetic approach to listening to a traditional solution provider - or someone with technology that they didn't know was adaptable to a different problem set or market (think Steve Jobs playing with a mouse and window-based interface at Xerox.)
Personally, I don't think viable solutions can be created without a significant application of empathetic analysis and understanding with respect to both the problem owner *and* the traditional problem solver. To me, EQ is more important than IQ - because the better you understand the problems and the solutions from the perspective of the people inhabiting them, the more likely it is you might come up with a great, investable solution that pushes everyone towards a bold new world.
[Side note re EQ - I'm always amazed when I see entrepreneurs make no attempt to understand the investors that they are pitching to, or what level of personal interest they might have in the subject being discussed, or solution being proposed. In my experience, entrepreneurs that do use EQ to engage with investors - and especially those that have done the necessary homework and can articulate why their venture may or may not be a fit for their capital - have a distinct advantage over those who like to pretend investors are just ATMs - i.e. robots with money*. ]
IQ and EQ. I know at a high level it probably sounds like that's all that's needed - an ability to understand the problem set (EQ), and use one's collective knowledge and wisdom (IQ) - and... bingo! Except that if you think that, you'll be missing one very important additional metric that is going to be critical to your success: TQ.
There are no "dream startup" stories. Talk to any founder of any startup that has made it to revenue and beyond, and you'll hear some of the most harrowing, heart-breaking, and (sometimes) hilarious stories of what the founder (or founders) had to do to keep the ship on course, and above water. How Airbnb sold Obama-branded cereal for a year so they could continue to pursue their widely-hated business idea. How Eventbrite struggled not just with acutely negative perceptions of their husband-and-wife founder team, but with cancer laying low one of those founders at a critical time. How when Ring founder Jamie Siminoff appeared on Shark Tank, he was not only almost broke, but he left without a single offer.
Every day, thousands of men and women around the world start businesses, many without the slightest idea of exactly what they're getting into. Starting a business is really really hard. Only the tough will survive. In a startup, you need to know how to survive (and keep your team beside you) when you can't make payroll, pivot when your strategy isn't working out, adapt when someone pushes you out of your target market, and tap reserves (money and otherwise) that will enable you to stay the course, regardless of pandemics, riots, depressions, or personal tragedy.
But most of all you need tenacity. If you don't have that core toughness, aren't ready to explore the depths of your own resourcefulness, or your backup plan is a little too easy to jump to... then your TQ (tenacity quotient) is going to be low. And in my experience, nothing kills a business like low TQ. I view TQ as *the* essential metric. If you want to be successful, the only "Plan B" should be the one you plan to pivot to within your business if Plan A doesn't work out - not the easy consulting gig you kept warm on the outside.
Intelligence (IQ) + Empathy (EQ) + Tenacity (TQ) = Eventual Success. That's the recipe. Mix those together, then the only thing you'll need to add from time to time is a dash of luck - something that will become more and more probable, the more tenacious you are.
*Tip: If I can offer new entrepreneurs just one tip here... if you do manage to get an hour meeting with an investor, don't spend 59 minutes of it pitching. Spend the first ten minutes asking the investors what they've done in the space you wish to conquer. Ask them about what they think has worked and hasn't worked. For those who may be thinking it, I'm absolutely not suggesting you suck up (we're all put on our pants one leg at a time, etc..) - I'm instead suggesting that you a) use your IQ to gather intelligence... b) use your EQ to engage, and c) tell stories about your tenaciousness (TQ) to provide support for the meeting you're about to have - and proof as to why you won't immediately go running back to your old job if things get tough.
John is a Partner at Hatcher Plus, the leading data-driven venture capital investment firm. John has extensive commercial experience at the senior management level, having been the Chief Executive Officer of Authentium, Inc. the Managing Director, Asia, of WorldSpace, and CEO of Hatcher, the precursor company to Hatcher+. A tenacious and driven executive with longstanding board-level and C-suite level management experience within high-growth companies, John also brings a strong history of capital raising from an extensive network of investors globally. As Chairman and CEO of cybersecurity pioneer Authentium (acquired by CYREN in 2010), John co-authored three US patents and developed and sold cybersecurity solutions to some the largest organizations in the world, including the US Department of Commerce, NASA, AOL, British Telecom, Comcast, Cox Communications, Google, McAfee, Microsoft, Symantec, and Telstra. As CTO at Hatcher+, DocDoc, Heardable, and ThoughtRiver, John has designed and developed several highly-innovative technology platforms using cutting-edge approaches to data processing, user interface design, and workflow optimization. John is a frequent blogger and an in-demand speaker at venture events globally, and has extensive experience implementing ESG solutions as Chairman and/or board member of numerous start-ups, including director roles at trade finance provider ASYX and payment aggregator Mozido, and roles as Chairman of MENA-based financial services pioneer Telr, and the leading Cambridge-based legal services technology company, ThoughtRiver.
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