This article first appeared in Digital Edge, The Edge Malaysia Weekly on October 9, 2023 - October 15, 2023

Hercules, a mythical figure from Greek mythology, was a demigod as he was the son of Zeus, the king of the gods, and Alcmena, a mortal. A legendary figure known for his strength, courage and heroic exploits, Hercules possessed a sense of justice, displayed intelligence, was cunning and used strategy and tactics to overcome obstacles and complete his tasks. However, he had a tragic flaw, a bad temper, that led to tragedy when he was induced by the Goddess Hera to kill his wife and children in a fit of rage, for which Zeus punished him by making him complete 12 labours or tasks (ask ChatGPT about the 12 labours if you want to know more).

What does this have to do with entrepreneurship and investing? In many ways, investors look for a Hercules founder when they invest in a company. The team and the founders are the most important criteria when deciding to invest in a start-up. And the leader, or CEO, is the most important person in any team. Many of the characteristics of great founders are similar to those of Hercules, as we shall see.

When investing in a start-up founder, I look for people who are trustworthy and have unwavering integrity. If this doesn’t exist or if the trust is broken, no matter how great the founder or the company is, the investment will fail. These traits are also important to employees, as they must trust the founder and CEO to do right by them and by the company.

I had an investee CEO from one of my early angel investments who wanted to raise money from a very dodgy investor. This “investor” was well known as a crook who had conned many people out of their money and was in fact being sued by them. Yet the CEO wanted to take his money and when I asked him why, his answer totally confounded me — he said he could learn how to build a successful business from this investor. I was flummoxed. What did he want to learn from a crook? Needless to say, I got out of this investment as soon as I could by asking the founder to buy me out at cost. I can just imagine how untrustworthy this CEO would be if he was tutored by a crook.

Without trust and integrity, the venture will be doomed to fail, so above all else, these two traits are of the utmost importance to me as an investor.

Running a business is among the toughest things one could do in their life. There could be a crisis every day; there will be tough times and challenges. Of course, if you are successful, it does have its rewards, but no entrepreneur ever becomes successful without going through difficult times. Elon Musk almost went bankrupt when he ran out of money and Tesla almost folded. Musk even admitted to having mental health issues while building Tesla and his other businesses. Steve Jobs was sacked by the board of Apple and spent a few years struggling until he built another successful business that was later acquired by Apple, to which he returned as CEO.

Entrepreneurship is so tough that you could be celebrating a win in the morning and facing a disaster in the evening. There are so many ups and downs that you need to be both mentally and physically strong, literally every hour of the day. All entrepreneurs know this and if you haven’t felt it yet, get ready; it will happen.

If you want to build a successful regional or global business, you have to be very brave as you need to take risks outside of your comfort zone. In the 24 years that I have worked with founders, I have discovered that they are comfortable building their business in their own country because they don’t have to get out of their comfort zone. But as the business expands and they have to go abroad, I see that they are not so brave and while they will never admit it, the fear of the unknown affects their confidence.

I have seen founders pivoting their businesses or building different products or services to try and squeeze more out of their own country rather than taking what is already successful and blazing a trail abroad. This ultimately stifles their growth and they become a jaguh kampung (village champion) but can’t build a big regional business. That is why it is rare to see regional or global players among most start-ups.

One excuse they give is that they don’t have the funds to do this, but often, getting a foot into a regional market doesn’t actually require a lot of funds. If they are brave enough to do this and can prove to an investor that the business works regionally, they actually have a better chance of raising funds. Looking for that brave founder is not easy but with time, bravery can be developed.

Most entrepreneurs I meet are passionate about what they do, but the bigger question is: Are they driven enough to achieve their goals and objectives?

Entrepreneurship is often a very long game. From start to exit (assuming founders want an exit for investors, not necessarily for themselves), it is at least a 10-year time frame. In this time, they must be constantly driven to achieve multiple goals, be persistent and strive against all odds to succeed. If they cannot hack it for the long term or if they lose their drive, then failure is almost certain. In some cases, if they have raised enough money and the business is fairly mature, you can always hire a professional CEO and the founder can take on a different role. This happens often, even with companies like Google and Yahoo, where the founders take on more strategic or product development roles while a hired CEO leads the company. This doesn’t, however, happen at early and mid-stage companies, so the founder still needs to be super driven to succeed.

In this case, “cunning” is defined as the positive form of exhibiting ingenuity or being smart or creative about how one does things. I look for more than just a university degree for a founder when I invest. I look for founders who are intelligent, not just the usual educationally qualified intelligence but also street smart, with the ability to survive and succeed in any situation.

Entrepreneurship is not a linear journey. There will be twists and turns, challenges, difficult situations and painful decisions that need to be made. You could be battered by lack of cash; customers cancelling orders; competitors challenging your position or luring your customers; or staff defrauding the company (yes, this happened to one of my investee companies) but if you are an astute, intelligent and cunning entrepreneur, you can overcome all of these issues and you will have to as this is part of the journey. If you fail, it could be the end of the road for the business.

Every business is always one disaster away from complete failure. That’s why former Intel CEO Andy Grove said, “Only the paranoid survive.” Being street smart and cunning will help you navigate the long-term challenges of entrepreneurship and it is ideal if founders have these characteristics in abundance.

Some people say that successful founders must be arrogant. Arrogance is actually bad; it means displaying a sense of overbearing self-worth or superiority over others. Such arrogance leads to a closed mind with the founder thinking that they are the smartest person in the room. They rarely listen to others, which means they tend to exploit people. With arrogant founders, the culture of the company is usually quite toxic.

What I believe is necessary is confidence in your ability to achieve your goals, to build a great company and to deliver on your promises to shareholders, investors, customers and employees. But you also need humility because this means that while you are confident, you are still open to listening to other people’s opinions, you can take on new ideas and you are constantly open to learning new things. It also leads to a better culture in the company where employees are able to share ideas and thoughts knowing they would not be put down or dismissed even if the idea differs from the founders’.

As an investor and coach, I look for founders who are willing to listen and learn so that together, we can develop strategies and plans to build a great company. A confident founder is not threatened by others and will adopt good ideas from just about anyone.

Success is not built by one person but by everyone who contributes their own ideas and energy to the company and a humble founder understands this and will be open to any ideas and suggestions that can help them in their journey.

All founders have to execute their strategies and plans to achieve their objectives. Zeus gave Hercules 12 tasks to complete as punishment to atone for killing his family and he achieved these tasks not just on his own but with the help of many others, including other Greek gods and humans. He not only fought or used his strength, but also used diplomacy when it was needed and was street smart.

Just like Hercules, founders have to work with many other people — not just staff but also their shareholders and investors, partners, customers, government authorities and sometimes even competitors — to successfully execute their plans. I have found that one major cause of failure is poor execution. Thus, the ability to work with others to execute their plans is a key part of a good founder’s characteristic.

Other investors may look for other traits in founders but in my experience, if founders have the aforementioned seven traits, like Hercules, they will ultimately succeed. Yes, the founders and the team are critical to any investment, but those with the right traits have a much higher chance of succeeding than those with just a university degree or experience in the industry.

I don’t think industry experience is all that necessary as long as the founders have these seven traits. Great people are harder to find than great ideas. So, I am always looking for Hercules. Let me know if you are him.

Dr Sivapalan Vivekarajah, who has a PhD in venture capital from the University of Edinburgh, Scotland, is co-founder and senior partner of Scaleup Malaysia Accelerator (www.scaleup.my) and adjunct professor at the School of Science and Technology, Sunway University. He is the author of the book Supercharge Your Startup Valuation.

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