While finishing up a meeting one morning with an old friend, Alice recommended a business to me that she felt would be an ideal company for Raizcorp to partner with. I had met the entrepreneur she recommended a year earlier and remembered that Peter* lacked energy. He showed no excitement or interest in his business and was not clear on where he wanted to take it, referring to it as “a nice way to make some money.”
His general demeanour was one of someone who drained you of energy, and I remember feeling relieved when he left the party.
A promising prospect?
I valued Alice’s recommendation and opinion on the business because I’d known her for many years, and I concluded that Peter could have perhaps just had an ‘off’ night at the function where I met him. I raised this contradiction at my next meeting with my mentor.
I explained my dilemma to him, as well as the fact that I had known Alice for many years, and her decisions to invest in companies had always been extremely accurate and strategic, because they were based on large amounts of thorough research. Yet I felt uncomfortable with the experience I had had with this particular entrepreneur. Her recommendation contradicted the experience.
“What about this business has you feeling anxious?” my mentor asked. “I am not convinced that Peter has adequate business knowledge because he is in his early 30s and has only just started his new venture,” I explained.
“My first impression of him when I met him at the dinner was that he was low on energy and quite unfocused. I asked him about his business and his replies were short and imprecise, which left me feeling unsure of his ability to pull off what he was trying to sell to me.”
“Have you asked anyone else for feedback on this young entrepreneur and his business?” my mentor asked.
“Alice is someone I deeply respect, so I contacted Peter’s previous employer for a reference and they gave him a phenomenal one. However, working for a corporate is not the same as working in your own business where you are the owner and leader.”
Culture follows character
“A dog looks like its owner, just as a business looks like its leader,” commented my mentor. “In my experience, high energy and highly driven leaders create high energy and highly driven organisations. Low energy and timid leaders create low energy and uninspired organisations. So when you met Peter, if your first impression was that he was lethargic and unfocused, his business’ culture would most likely take on those characteristics.”
After considering my concerns about Peter, my mentor asked: “Does Peter have a business partner? Very often two business partners will balance each other out and bring two sets of skills and characteristics into a business.”
“No,” I replied, understanding the implications of the answer. “But he received such a good reference from his corporate boss?”
A tennis match on a grass court
“Tennis players who are strong at playing on clay courts are generally not as strong when it comes to playing matches on grass courts – they are two completely different games, each with their own set of conditions,” my mentor said.
In this story about the tennis matches on different court surfaces, I understood the lesson he was teaching me. If Peter had spent the last few years finessing his clay-court game for the corporate environment, then that would not automatically mean he would do well in a grass court game, which equates to running his own business.
“I would back my own experience of the entrepreneur over the recommendations of others, especially others who have experienced him in a different context. However, listening to your feedback, I would not back this one,” my mentor said confidently.
I later sent an email to the young entrepreneur and declined his offer.
* Not his real name.