I’ve had the privilege to work with many great entrepreneurs, both in my operating days at the start of my career and over the last decade plus on the VC investing side. In my experience founders usually fall into one of three types: mercenaries, missionaries, and crusaders.
I think all three types can be successful and build impactful, enduring companies. In fact we’ve backed founders I’d categorize as all three types here at NextView. But certainly now as a VC investor I think more about what sort of a founder someone is, to better understand both why they’re starting a company and how they’re likely to go about building it. And if we’re investing in the company, it then impacts how I might be most helpful as a thought partner to the entrepreneur depending on their archetype.
The literal definition of a mercenary is a soldier who fights for monetary reward rather than political cause or national affiliation, and in modern times we often use the term as a derogatory description of someone’s attitude or motivations. The reality is that all founders (and investors) are motivated at least in part by financial or professional success, though to me that isn’t what fundamentally distinguishes great “mercenary” founders. And mercenary founders can also care deeply about the underlying mission of their business or the collective success of their stakeholders.
To me the “mercenary” founder type describes those leaders who are often referred to as “business builders”. They’re individuals motivated to succeed primarily in the creation and growth of a company in many laudable ways, like building successful organizations or mentoring or inspiring others, in addition to economic success. When you ask a mercenary founder why they started Company X (as opposed to Company Y or Z doing something entirely different), they often don’t have a strong answer. But sometimes they’re the founders most motivated to build a successful company. Mercenary founders tend to do more extensive market mapping to build a company in “white spaces” versus being guided to an opportunity by a specific set of values. MBA founders often, though not always, fit into this archetype.
I’d point to Marc Benioff or Meg Whitman as prototypical mercenary founders. Benioff has used his platform as founder/CEO of Salesforce in recent years for philanthropy and social activism, and early on he evangelized the software as a service model. But if you look at the arc of his career as an early disciple of Larry Ellison at Oracle and then Benioff’s work building Salesforce, you see a founder who’s been driven by professional achievement throughout his life and one who’s thought deeply about the “how” of building a company like Salesforce as much as if not more than the “why”.
While technically Whitman wasn’t a founder of eBay, she took the CEO role when it was a ~30 person company and deserves credit for building one of the most successful businesses of the Internet 1.0 era. It also speaks to the sort of founder who would start a company like Quibi after already having tremendous success with eBay and HP.
At some level nearly all tech entrepreneurs are evangelizing something… a new technology, a new business model, a new brand. What distinguishes the missionary founder type is the overarching nature of their drive to convince others of their particular worldview. They often care deeply about being “right” or are indifferent when others think their perspective might be “wrong”. The “missionary” founder type isn’t about moral values or doing good, per se, but about promulgating a particular innovation, ideology, or business concept.
In some ways, backing a “missionary” founder is a harder decision or at least harder to get right as a VC investor. There are entrepreneurs and innovators I regard very highly, but at times I’m uncertain if their missionary zeal will be channeled effectively towards building an enduring company or if it will be directed more at spreading their worldview. As an aside, over the last decade or so it has become en vogue and almost trite for tech founders to talk about being motivated to “change the world” or what have you. The founders who espouse this publicly are almost always mercenaries, seeking to cloak themselves in a more socially acceptable way. Missionary founders are almost blind to their drive, and tend not to frame themselves this way in public statements.
Stuart Butterfield and Linus Thorvalds are examples of the missionary in the technology sphere, and there are various others in other walks of life (e.g. Muhammed Yunus of the Grameen Bank). Butterfield built Slack with a mission of changing electronic communications and reducing or eliminating email usage. He also famously championed a philosophy of not having salespeople, and though that ultimately wasn’t the case Butterfield and others did spread a commercial model centered more on bottoms-up adoption and customer success teams than traditional outbound sales which is now being replicated across many B2B software businesses. Thorvalds similarly helped create and evangelize the open source software movement, though in doing so he notably never created a significant company as can be true for some missionary types.
There are a few parallels between the missionary and the crusader. The missionary may travel far and wide to spread the gospel, but fundamentally intends to return home more or less the same person. The crusader, on the other hand, takes up arms and is engaged in a holy war against dark forces… they will either never return home, or if they do they will be a conqueror who is forever changed.
Crusader founders are often mission-driven entrepreneurs, similar to the missionary. But they commit themselves without compromise to vanquishing others… competitors, incumbents, non-believers, etc. They are prepared to take actions which may be in service of the mission, but can at times endanger themselves or their organizations. As an investor, sometimes the way to be most helpful to a crusader founder is to serve as a voice of reason at critical moments.
Elon Musk is the quintessential crusader founder. I had the good fortune of working for him at the very beginning of my career, when I joined PayPal (originally the X.com part Elon founded) as my first job out of college when we were still a fairly small startup. Elon’s original vision for X.com was to usher in an era of internet-enabled financial services (retail banking, payments, simple stock trading), thus displacing the slow moving incumbent banks that were uninterested in innovation in the late 1990s. In many ways this crusade has been taken up by the modern fintech revolution. The script was largely the same for SpaceX, though the mission was to empower lower cost space travel and human settlement beyond Earth and it required displacing a stodgy aerospace industry. And also Tesla to speed the transition to electric vehicles, which were not at all a focus of the existing auto manufacturing giants a decade ago. See a pattern?
As much as I and much of the world hold Elon in very high esteem, we’ve also seen that as a founder he’s prepared to push the boundaries to advance his cause (the infamous 420 going private incident, making bold promises about full autonomy or new models that go unfulfilled, etc). Being a VC investor or a tech entrepreneur is fundamentally an outliers business, so there’s survivorship bias whenever we look at successful companies or founders. But arguably this is most true about the crusader founder type. Remember that other car entrepreneur, the one who boldly championed safer and more innovative car designs, who took on the stodgy Detroit automakers, who also got tripped up with the SEC? You probably don’t unless you’re a fan of vintage cars or saw the Francis Ford Coppola / Jeff Bridges movie about Preston Tucker. In an alternate universe the story of Tesla today could be more like Tucker and not the most valuable automobile company on the planet, which encapsulates the fine margins of investing in a crusader founder.
So What’s the Answer?
As I said at the start, there’s great founders of all types… mercenary, missionary, and crusader. I’ve had the privilege to work with successful entrepreneurs who arguably fit each of these molds. Some founders genuinely blend more than one type. One of the most successful founders I’ve had the opportunity to collaborate with is arguably a missionary who was trained as a mercenary early in their professional career, so has found a way to be the best of both.
But I do find this framework useful in my job of assessing and collaborating with founders. At the end of the day, what matters most is for us to be self-aware as both founders and investors. When that happens, much is possible.
(Image: Swiss Guard at the Vatican, one of the world’s last remaining mercenary forces)