Last week, I was thinking about filters for identifying successful entrepreneurs. I had previously written about critical traits like intelligence, persistence, domain expertise, etc., but I was looking for something else.
In unpacking the problem, I decided to flip it and see if I could find attributes to avoid. I started looking for reasons why entrepreneurs fail when everything on paper looks solid. But I was stuck.
Fortunately, and out of the blue, I received an email from my friend, Danvers Fleury with the following:
I had to learn the hard way (admittedly again) that character is a great gateway trait to screen for but it is not a proxy for judgment.
And that word, “judgment” jumped off the screen and drilled a hole into my head. Not judgment in the sense of big strategic decisions, but rather, reflexive, instinctive judgment based on the sum of experiences (and character) that allows you to make quick decisions.
Unfortunately, I can think of too many times when failure of basic judgment should have been a red flag. For example, last year I took a meeting with someone who offered to make several (four) introductions to “help me out.” The thing is, he didn’t write any of this down. Guess how many introductions were made?
Yup, zero out of four.
How likely is it that this person could deliver on something challenging when they can’t walk and chew gum? And how smart would I be to work with this person in the future?
The Problem in Evaluating Judgment
With the benefit hindsight, it is often easy to identify a few head scratchers. However, evaluating judgment ahead of time can be a really tough thing, especially when you don’t have direct, situational experience with the other person.
To shed some light, I reached out to my friend, Jan Davis, President of Triangle Angel Partners. Jan has a ton of experience evaluating early-stage investment and founders: Here is what she had to say:
When I don’t know entrepreneurs and need to evaluate their judgment, I pursue one (or all) of three alternatives:
First, I ask people who DO have experience with them, and preferably not references they give me.
Second, I work with them to set up some milestones to meet over several months and talk with them multiple times over the time to discuss how they achieved the milestones.
Third, and my least favorite, is I ask them to tell me stories about times when they made bad decisions and what they learned from them. If they say they have NEVER made a bad decision, they are clearly not investment grade material.
YES, awesome advice Jan.
Don’t just talk to the people that have been pre-filtered to provide a positive spin. And I love the idea of giving someone some basic milestones and an opportunity to deliver on these over a period of time.
Anyone else have insights on how to evaluate judgment?