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Investment, Proptech, Start Up, Technology

Managing the Passion Gap

March 30, 2017

I was having drinks with a CEO of one of our portfolio companies recently, and this discussion focused on the challenges of successful team building; the heart of any good tech company (and a chief responsibility for CEOs).  There are many difficulties in hiring as a young startup: lack of time, lack of resource, a rapidly changing company and of course adapting culture and “fit” as the company scales very fast.


To a certain extent, these issues face all companies regardless of stage in the private market. Yet there is a particular challenge facing companies at seed stage: what I call the “passion gap”. This is where founders are so passionate about their venture and vision that they are living and breathing it every day, often at great expense. Long working hours, non-existent social life, no holidays etc. Of course, they don’t see this as a sacrifice as they are so enthusiastic and excited about what they are building. I, myself, have felt this way about Pi Labs over the last 18 months or so. The challenge comes in the first few hires outside of the founding circle at that seed stage. Almost invariably, the incoming individuals are not at the same level in terms of passion. How could they be? They are just employees.


To be clear – this is entirely natural and in no way am I suggesting that such people are not excellent additions to the team. Technically and skill-wise they are great (one assumes/hopes) but when it comes to “fit”, founders often struggle with alignment as they see life through their own lens. This can be a problem – ultimately no one is ever committed enough to the vision in their view. This effect can be exaggerated if options/equity are in the equation.


I wrote recently about how self-awareness is a trait we look for in founders when we invest. I believe this to be a critical, yet oft-overlooked, characteristic. Knowing thyself, understanding how you are different, playing to your strengths and plugging your weaknesses are essential to the success of your company. Managing the passion gap is part of this. Entrepreneurs are abnormal. We take enormous risks every day that compromise our families and loved ones, our health is probably sub-par due to the stress and workload and we are probably less interesting people as a result of our narrow and absolute focus (at least for a while). Very few people are like this (something today’s entrepreneur hungry society needs to remember, but that’s another post altogether) – and that’s a good thing. If we were, the world would be a pretty miserable place.


Managing the passion gap is about managing expectations – your expectations as a founder/CEO. Get great people in; give them an environment they will thrive in; ensure they are stretched (rather than pushed); and reward them accordingly. They will fly. They will not be prepared to sacrifice as much as you in all likelihood and there is no problem with that. Make your peace with it: that’s why you are the founder and CEO.




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