In addition to the ability to pivot, character matters, too.\u00a0 As my kids have commenced driving, I\u2019ve harped incessantly, hopefully to the point of their nausea, on the notion that they should always have in mind that everyone driving on the road is in a massive conspiracy to collide with them, and make it appear that the collision was an accident. \u00a0\u201cJust assume everyone is trying to kill you,\u201d I say.<\/p>\n
I take this approach to angel investing.\u00a0 I begin by assuming that the founders of the company are incompetent, psychopathic, lying con-men and thieves; and I try to convict them of these charges<\/i>.\u00a0 I ask them innocuous questions, and try to check as many seemingly inconsequential details of their story [ Email readers, continue here…]<\/span>\u00a0 Faithful in little; faithful in much.<\/i>\u00a0 If someone will deceive about a small matter, he will deceive about anything and everything.\u00a0 I don’t do business with liars.\u00a0 If I am unsuccessful in proving these charges, then, perhaps the company is a candidate for investment.<\/p>\n I was a partner at a large global consulting firm.\u00a0 We hired literally hundreds of thousands of graduates every year.\u00a0 They had no meaningful experience.\u00a0 The only way to evaluate them was to look for a kind of raw, athletic talent.\u00a0 To help us in this, we adopted a technique which I believe is now universally used, but which was unusual at the time.\u00a0 We called it behavioral interviewing<\/i>.\u00a0 This technique relies on identifying specific traits and characteristics which one wishes to find, either negatively or positively, and then asking the candidate to tell specific true stories about situations in which s\/he would have had an opportunity to demonstrate the traits in question.\u00a0 A lot of the value of this technique relies on the interviewer being extremely aggressive with the candidate about the minutest of details within the story offered.<\/p>\n For the founders of companies in which I am considering investing, I have concluded that flexibility, intellectual nimbleness, and a relentless focus on dispassionate examination of factual evidence of results, are some relatively rare traits with which I cannot ignore.\u00a0 \u201cTell me about a time when you changed your mind about something important,\u201d I will ask.\u00a0 \u201cTell me about a time when what you were doing wasn’t working.\u00a0 How did you know it wasn’t working?\u00a0 What was the problem?\u00a0 What did you do?\u201d \u201cTell me about a time when you screwed up big time.\u00a0 What happened?\u00a0 What did you do?\u201d\u00a0 I will ask questions about the tiniest details of their stories.\u00a0 What were you wearing?\u00a0 What time of day was that?<\/p>\n I have actually had people respond along the lines of \u201cI don’t recall a time when I screwed up.\u201d Or \u201cSometimes I have been let down by my subordinates and my partners, though.\u201d\u00a0 Check, please!<\/p>\n But, a more common problem is that you find out by detailed questioning that the story presented is not really a true specific story, but a theoretical composite story, which reflects theoretical behavior the interviewee assumes you want to hear about.\u00a0 I don’t want to work with these people.\u00a0 They are trying to tell me what I want to hear, and they do not want to admit the possibility of fault.<\/p>\n I want to work with people who are pleased to discover mistakes, errors, and opportunities for improvement.\u00a0 I will not work with people who hide mistakes, who ignore errors, and who pretend that everything is wonderful.\u00a0 I want to work with people who face the truth.<\/p>\n One of my very So, focus on the personal traits and characteristics of your team.\u00a0 Things will definitely go wrong.\u00a0 You want to have some idea of how your team will react when that inevitably happens.<\/p>\n (1)\u00a0\u00a0\u00a0\u00a0\u00a0 Helmuth Von Moltke the Elder, 1871<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" By David Steakley Our guest insight this week comes from David Steakley, a past President of the Houston Angel Network,\u00a0 and a reformed management consultant.\u00a0 He is an active angel investor, and he manages several angel funds in Texas.\u00a0\u00a0 Hang … Continue reading ![\"Basic_Berkonomics_front_cover\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2012\/10\/Basic_Berkonomics_front_cover.jpg\")
<\/a>as I can.\u00a0 Where did you go to school?\u00a0 When did you graduate?\u00a0 In what field was your degree?\u00a0 What was your first job?\u00a0 Why did you leave that job?\u00a0 Where did you grow up?\u00a0 Did you play sports in high school?\u00a0 What are your hobbies?<\/p>\n
\nfavorite entrepreneurs is the shining example of taking himself to task over errors and missteps, and of a constant vigilant search for how things are going wrong in his businesses.\u00a0 Recently he launched a unit which developed a casual browser-based online game, monetized through micro-transactions for virtual in-game goods.\u00a0 One of the beautiful things about this kind of business is the depth and immediacy of information available about performance and results. So, when something is changed, you find out immediately how the change affects results.\u00a0 This company has been through so many iterations of its model that I have lost track.\u00a0 I love the willingness to experiment, and the perpetual dissatisfaction with how things are going, and the relentless quest for improvement.\u00a0 This guy is going to make me a lot of money, or die trying.<\/p>\n