Sonali de Rycker, a partner at Accel, has worked with some of the most brilliant European technology entrepreneurs over the last 12 years, including the founders of Avito, Spotify, Kry and Monzo. Frequently listed among the most prominent venture capitalists in the world, Sonali has a unique perspective on the principles that have underpinned some of Europe’s defining success stories.
From her work, Sonali has distilled eight leadership lessons that founders of the next generation of groundbreaking young ventures should take to heart. These eight learnings will set you up for success as a leader, and ensure that as your company scales, so do your leadership practices.
Expect to learn
- How to build a narrative that makes brilliant people gravitate toward your vision
- How to hire the best you can get, while accepting that you’ll get it wrong from time to time
- How unwavering transparency will empower your team
- How to keep your focus and priorities straight as your company scales
1. Develop your storytelling – your most powerful asset
A key leadership attribute is an exceptional ability to tell a story. Sonali explains, “Storytelling impacts every aspect: founders need to sell their vision to attract customers, to attract great talent, and to raise capital.”
It starts with the unique insight that led a founder to start their business, often a trademark ‘aha moment’; as they’ve joined certain dots or spotted a white space that others don’t notice. “It could be noticing a weakness in a competitor’s product or a customer need you have experienced by being really deep in an industry,” Sonali says.
But vision alone is not enough, “A founder needs to find that artful balance of selling their tomorrow but focusing on today. What’s very powerful is when their vision can be distilled into clear decisions on what they need to do now to get there. When an entrepreneur can tell that story clearly, it’s hard not to want to get onboard,” she says.
2. Hire the best out there
Storytelling along with vision, passion and charisma play a key role in attracting talent. A great leader has the ability to attract the kind of talent that, on the face of it, might feel impossible.
“Don’t hire the best you can see, hire the best you can possibly get,” Sonali says. Describing an iconic example from Accel’s portfolio: “It was a seminal moment when Sheryl Sandberg decided to join Facebook in 2008,” she shares. “Sheryl, of course, had multiple big roles she could have accepted instead, including being the CEO of a company. But because of Facebook’s ambition and the impact she knew she could have, she took the job of COO.”
Sonali believes the most successful founders can convince someone who was already set on becoming their own boss to work for them. “If you look at the C-Suites of the best startups, you’ll see a number of people that could have easily headed up their own companies. However, they chose to join a company within someone else’s founding story because the mission is so compelling.”
3. Expect some hires to fail
However, not every hire turns out to be right. As companies raise money faster than ever, they are also hiring at an unforeseen pace.
Leaders should embrace the inevitability that not everything will go as planned. “It’s part of the journey that you get some hires right and others you don’t. Hiring is a muscle that takes a lot of training to get fit. With the people who don’t work out, take care of them and help them land another job,” Sonali says. “Not moving fast enough to let someone go can breed ill will and complacency within a team.”
People’s success is often correlated with a strong HR function, which wasn’t something the startup scene talked about when Sonali was starting at Accel in 2008. This has changed over the past 5 years, and entrepreneurs who invested in great HR teams early on are seeing it pay back multiple times over.
In fact, hiring a great people officer and strong recruiters before you actually need them can be a huge advantage. “To build a great recruiting funnel, the hiring team will need to know your culture. Give them that time and help them get to know what good looks like for your company,” Sonali says.
4. Clarify and prioritise ruthlessly
In a period of rapid growth, clarity of thought, or the ability to focus on the right decisions in uncertainty, becomes incredibly important.
“We invest in early-stage companies who are true innovators, which often means there is a big vision but little proof. How the founders think and make decisions determines how they execute. Good execution is often the result of a series of good decisions and prioritizations,” Sonali explains.
Clarity of thought is something that can be developed. One way is to surround yourself with people who ask the right questions. Sonali suggests, “An entrepreneur should use their board for this. Board meetings should not be update sessions. Send your board the key questions and priorities in advance so they can come prepared and you can have a robust debate on the issues that actually move the needle.”
Lean on other advisors and mentors for this, too. However, it’s always preferable to take feedback from those who are following your journey rather than dipping in and out. Especially those with skin in the game, whether that means money or reputation.
5. Balancing values and value
Rapid growth often leads entrepreneurs to decision-making moments where they’ll face a tradeoff between values and value. Sonali has seen that the strongest companies have found a way to manage those conflicts. “Don’t forego your core values, as you focus on building shareholder value.”
Some of the most important values she’s currently seeing are transparency, diversity, and inclusiveness.
In particular, Nordic founders seem to excel at these, such as Ilkka Paananen and Mikko Kodisoja of the Finnish gaming company Supercell. Accel led Supercell’s Series A in 2011 and saw how the business embodies the Finnish attitude that everyone is more or less equal from the first time they meet. For example, while it’s typically just the founders that meet with VCs, Ilkka, and Mikko brought their entire team to the meetings.
Staying true to their values comes naturally to the younger generation of founders. “What I find common in many millennial leaders is that they want to win but also do the right thing. It is the nature of today’s workplace, where for employees to engage, buying into the mission is critical. I have seen time and time again when things go awry, it is the employees first and foremost who demand that their leaders walk the walk,” Sonali says.
6. Be transparent in order to build trust
Transparency is worthy of a tip of its own, as it’s key to empowering your executives to the best of your abilities, so they can truly step up. At its core, transparency means being accessible, authentic, and open to feedback.
Founder of mobile consumer bank Monzo, Tom Blomfield, is a great example, “His transparency has taken me aback at times,” Sonali says.
For example, a CEO typically announces a new investment to their team after the deal is signed and set in stone. When Accel decided to invest in Monzo, Blomfield announced the news to his entire 300-strong team before it was signed. “I remember thinking: is this a good idea? But complete transparency and accountability is Tom’s philosophy as a leader,” Sonali says.
This attitude extends to an all-hands Q&A session every week where Tom answers questions submitted in advance. Following the investment announcement, one question was: Why do you think you should still continue as CEO as the company continues to scale meaningfully? “And he answered in a completely open, authentic way,” Sonali says. (Editor’s note: In May 2020, Monzo announced that after five years, Tom Blomfield will be stepping down as CEO and continuing as President.)
7. Build a well-functioning executive team
Transparency also plays a key role in how CEOs build relationships with their executive team. The best CEOs Sonali has worked with understand that they need to build relationships with their key executives as a leadership group and not just individually.
Often, first-time CEOs nail their one-on-ones, but they don’t naturally embrace doing the same with all their key execs in the same room.
Moving from being a founder or small founding team to a bigger company without effectively cultivating this way of working can become difficult for a company over time, as it becomes too much about the CEO, Sonali notes. She compares a well-working company to the human body: the organs need to be talking with each other for the whole entity to work properly.
To ensure this happens, CEOs should bring their execs together in weekly meetings. “That’s when the magic happens – when smart people with the right incentives, who’ve all got skin in the game, come together to build on each other. You’ll get more than from just one-on-ones,” she says.
8. Keep focused on the North Star
It is so easy to be blinded by shiny new things, especially when your company starts to grow, and numerous options are thrown at you. “Inherently, founders like new opportunities and new ideas. That’s their natural instinct, but some of the best founders I’ve worked with have a great ability to selectively mute it.”
A founder that builds the right dialogue with the team, customers, board, and shareholders is more likely to stay true to their mission. Figuring out what you won’t do is equally important to figure out what you will do, Sonali says. “As the founder of a young startup, one of your most important assets is your focus,” she adds.
Sometimes entrepreneurs tend to take their sight off their original vision and obsess over competitors’ narratives. “Suddenly, they may find themselves playing a defensive game, going to markets or launching products to compete against what others are doing rather than following their own voice.” This isn’t how you win. “You win by playing your own game, and playing it incredibly well,” Sonali concludes.