The CEO of 500 Startups says all successful founders have these two traits in common

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The CEO of 500 Startups says all successful founders have these two traits in common

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500 Startups

• Christine Tsai has worked with hundreds of entrepreneurs since cofounding 500 Startups eight years ago, giving her some unique insights into what factors lead to success.
• She said successful founders tend to have two traits: they listen to feedback and they move quickly.
• To succeed, prospective entrepreneurs also have to open-eyed about the difficulty of the task ahead of them, she said.

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Christine Tsai has a lot of experience working with startups, and that's given her some pretty good insights on what makes entrepreneurs successful.

Tsai is the cofounder of 500 Startups, the famed Silicon Valley venture firm and startup accelerator. Since last August, she's also been its CEO, following the departure of Dave McClure, her fellow cofounder who left amid accusations of sexual harassment — accusations that she's declined to discuss in much detail.

Launched in 2010, 500 Startups has helped incubate hundreds of companies and has invested in more than 2,000 total, including Twilio, which went public in 2016. Over that time, Tsai has gotten a close-up look at lots of startup founders and seen what works and what doesn't and what it's like to be an entrepreneur.

Successful founders tend to have two key traits, she said in an interview this week with Business Insider. They're coachable, and they move fast.

Listening is one of the keys to success

500 StartupsTsai said people have this image of the successful entrepreneur being someone like former Apple CEO Steve Jobs — the "don't listen to anybody, I'm always right type of founder." But those types of founders usually aren't successful, she said.

"I feel like those people who are like that, they succeeded despite being that way, not because they were that way," she said.

That doesn't mean successful entrepreneurs need to be ultra-congenial or acquiesce to every suggestion made to them, Tsai said. But they do need to be open to suggestions.

"They do listen," she said. "They do take the feedback from customers, from employees, from investors."

Moving fast is also crucial

Successful startup founders also move quickly, whether it's launching new products or putting new strategies in place — or learning from mistakes, Tsai said.

500 startups meets frequently with the founders of companies in its portfolio to check in with them about how they're companies are doing and how things like fundraising are going, she noted. "It's always a bad sign if they say they're going to do something, and then a week later, two weeks later, they still haven't done it," she said.

Successful entrepreneurs have to be careful not to be rash or reckless, she said. But they also have to avoid stalling and overthinking things.

"It's a very fine balance, of course," Tsai said.

But founders than succeed have a very acute understanding that they've got to move as quickly as possible.

"You have a very limited runway either in terms time [or] cash," she said.

It's important to be clear eyed about the task ahead

Reuters/Brendan McDermidTsai also offered some advice for prospective entrepreneurs: Understand what you're getting into.

TV shows and news reports tend to romanticize the life of startup founders, particularly the super-successful ones. But founding and running a startup is usually anything but glamorous, she said.

Most startups fail. Many entrepreneurs are trading a stable, high-paying job for an uncertain, lonely, and stressful existence.

And the payoff — if there is any — usually only comes after years and years of hard work.

"It's really sucky … it's really hard," she said. "I definitely do warn [entrepreneurs] about that."

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July 25, 2018 at 03:54PM