Capabilities and sensibilities

“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” – F. Scott Fitzgerald

One reason running a startup is so interesting is the constant tension between opposing ways of thinking: short-term vs. long-term, internal vs. external, saving vs. investment, etc. At large companies, responsibility for these ways of thinking is often spread across multiple business units. In startups they fall on a few people, usually the founders.

As a founder, the most important tension is between your capabilities and sensibilities. Capabilities are your talents and resources. Sensibilities are the way you see the world. Successful founders usually have an unlikely combination of capabilities and sensibilities. The right sensibilities without the right capabilities means a good vision, poorly executed. The right capabilities without the right sensibilities means building something your market doesn’t want. Getting both right creates founder-market fit.

There are advantages and disadvantages to being an experienced entrepreneur. Disadvantages include the fact that, with age, you are more likely to have obligations outside of your startup. You also risk having calcified sensibilities. Counterbalancing this is greater self-awareness, and, ideally, the wisdom to choose markets that match your sensibilities and cofounders who augment your capabilities.

http://twitter.com/elicolner Eli Colner

tldr; it’s really hard

http://www.cdixon.org/ chris dixon

heh, that’s tldr for pretty much every startup blog post ever

http://twitter.com/mikeyavo Michael Yavonditte

I am now back in a place (adtech) where I have the right sensibilities and the right capabilities. What’s the result? I recruit 1000% better, but more importantly? I see things (again) that others do not see. It’s a little scary because I don’t want it to feel too easy, but it feels dramatically easier than building mobile apps (right sensibilities, wrong capabilities).

I now make decisions from a familiar perspective: from a hypothesis that I’ve confidently developed. I don’t waver much because I know certain things are true. It’s a good feeling, one I don’t want to stray from ever again.

http://www.cdixon.org/ chris dixon

Sounds like you’ve been thinking about the same things as me. I realized that I was at my best when I got the capabilities – sensibilities right. At SiteAdvisor what we did well was combine strong technical capabilities (due to my cofounders not me) and sensibilities that came from an “ordinary user” perspective that most security people didn’t have.

I think the risk on your 2nd/3rd time in the same space is 1) getting overconfident and 2) “fighting the last war”.

http://procause.com/ matthewhughes

Well put.

I’ve thought a lot about this subject, or a variation of this subject a lot lately.

When assessing your start-up idea, you have to ask yourself where you have ‘built-in’ knowledge?

That could mean capabilities and sensibilities.

Whatever they are, lean on your built-in expertise and talents.

http://www.cdixon.org/ chris dixon

You can also partner with people to give you the right capabilities. Much harder to do that with sensibilities. Usually to have the right sensibilities you need to be someone who personally wants to use your product. (hence the common advice to “scratch your own itch”)

http://twitter.com/augie_smith Augie Smith

I think this is why accelerators stress the team, and the history of the team, so much.

The thinking is that if you have worked together in the past (overcome some obstacles) and want to pursue another project, then your sensibilities probably match. If you succeed in that project, then perhaps your capabilities match too.
http://procause.com/ matthewhughes

Yup.

I guess built-in knowledge also includes the people you know and leveraging their talents.

http://reecepacheco.com/ reece

absolutely

no paragraph on the advantages and disadvantages of being an inexperienced entrepreneur?

http://www.cdixon.org/ chris dixon

Oh, thought that was kind of implied by the negation of the last paragraph. Advantages: no distractions, flexible / modern sensibilities. Disadvantages: less self-awareness, which can lead to picking the wrong team and/or market.

http://reecepacheco.com/ reece

yeah… i inferred it a bit, but i also think that some of that naivety can be a positive
“you don’t know what you don’t know” and you don’t have the “baggage of experience”

http://www.cdixon.org/ chris dixon

Agree, that’s what I mean by flexible / modern sensibilities, but you phrased it better.

http://reecepacheco.com/ reece

gotcha

http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim

these are excellent points. Naivety has its advantages especially when trying new things in life. Too much experience is not always good (Nassim Taleb mentioned some of these concepts in Black Swan book)

Irving Fain

Great post! I would say the self-awareness to first recognize what your capabilities are and are not and then the sensibility to recognize that you need to fill those holes is one of the most important aspects of a successful company / founder.

http://www.cdixon.org/ chris dixon

I agree.
JamesHRH

It can get esoteric, but the only sound startup you Can build is the one that You can build.

Trying to do something that is not instinctively you will lead to failure.

Recognizing who you actually are is not common, for most people, before 20 (30? 45 tops, maybe).

http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim

great post and quote!! I agree with @ifain:disqus that you need to be self aware and honest with your strengths and weakness. This allows you to bring onboard the right partner that complements your skills and gives the startup a chance to succeed

http://twitter.com/augie_smith Augie Smith

@199dffa8119485f5259929431b5f81e4:disqus Should you place more of an emphasis on sensibilities or capabilities when choosing a co-founder?

http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim

I think @cdixon:disqus explained it elegantly by stating that you need both execution (capability) and vision (sensibility)

http://www.cdixon.org/ chris dixon

Agree, but part of what I’m trying to argue is you need to divide your strength and weaknesses into two categories: capabilities and sensibilities, and then compensate accordingly (or choose a different market if you can’t get a team with the right sensibilities).

http://twitter.com/Yasaman Yasaman

Great post. As a first time entrepreneur and Co-founder, I totally can feel the high level of responsibilities on my shoulder. I have to be involved in every decision making process (our company, ActivePepper, is small with only 4 people now) get everything done, constantly foresee what’s next in order to lead the team towards our goals. With all its stress and pressure, I truly enjoy all I do though because I care about our mission and what we try to build.

To your note about sensibility or capability, I think it’s better to be sensible than capable. I noticed if you are sensible and smart, you can attract talents, advisors, mentors (who teach you and spend time with you with little to no expectation), and find the resources that you don’t have. I agree though if you don’t have any skills or resources that will make the entrepreneurship route very tough. As a young, first time entrepreneur, if I have to chose between sensibility and capability, I will pick sensibility.

http://www.cdixon.org/ chris dixon

Thanks Yasaman. I think you need both. Sensibility lets you intuitively understand your customers & market. Capabilities are raising money, recruiting, managing, guiding tech & product, etc. They end up being pretty different skills.
http://blog.kwiqly.com/ James Ferguson @kWIQly

Go for both – One grows on its own – the other you hang on to !

Like the http://www.activepepper.com/ concept – might try for skiing in Switzerland when you get here !

http://blog.kwiqly.com/ James Ferguson @kWIQly

Thanks Chris this is exactly how I need to express our team. So here goes and forgive the passion !

We are older (average 40s), pretty bold and totally committed. We have exits behind us, infrastructure, global specialists in real niche IT, and contacts to die for and we aren’t going away. We have offers of funding, that we aren’t ready to take yet. And we have a technology that is *wincingly close* to product/market fit.
So when will we see that fit ? – I’m guessing 3 months for first real traction. But could it be 18 months ? – certainly – it’s a big industry and market (energy efficiency B2B).
Will we still be here when it happens ? – Scrub that – stupid question !
So Chris – did I understand the concept ?

http://www.cdixon.org/ chris dixon

I think so. Personally if I ever started a company again 1) I’d make sure I have sensibilities that fit the market (build a product I feel a need to personally use), 2) partner with the right people who compensate for my weaknesses 3) I’d try to wait as long as possibly to take funding, ideally post product-market fit. So I think we agree.

http://blog.kwiqly.com/ James Ferguson @kWIQly

That’s it 100% – nutshell…
1) Consulted for 15 years and did some trial R&D in automating services (back in 2002) = scratch itch.

2) UK Gov. sponsored PoC (2006) won national prizes – real world trials – not scalable.
3) Waited – technology for scale and flexibility did not exist !

4) Tech. resolved – set up a company to own IP,
5) Cracked scalability.
6) Now pulling in team from industry.
7) Global top 100′s “saying” they will buy.

Soon to go for Seed – Frightening as anything – but hey isn’t riding tigers supposed to be !

PS European based so guess you are not in – otherwise a cool fit – *liked hunch* – some domain similarity !

http://abdallahalhakim.tumblr.com/ Abdallah Al-Hakim

great sequence of events. I look forward to #8

JamesHRH

This is 1000% on target.

http://www.victusspiritus.com/ Mark Essel

I’ve completely given up on rational sensibility.

http://blog.kwiqly.com/ James Ferguson @kWIQly

I tried Sense & Sensibility – liked them

- Now giving up Pride & Prejudice – harder

http://www.victusspiritus.com/ Mark Essel

Hah, much easier being senseless than egoless!

http://blog.kwiqly.com/ James Ferguson @kWIQly

Hmm – But if to have too much ego is senseless – how are they correlated ?

http://www.acktie.com/ Jamie Sowder

Great post Chris! My other co-founder, Tony, and I, realized part of this equation a few weeks ago. I’m not sure which part

We’d be classified as inexperienced entrepreneurs. One thing we love about our inexperience is that we’re questioning everything, thus we learn so much, both about our market and ourselves. A few weeks ago, we made the best “pivot” we’ve made thus far – we analyzed our own personalities and modified our business model.

We felt we weren’t performing at our best, and we couldn’t put our finger on why. We asked ourselves some hard questions such as “why don’t we put as much effort into this front as that one?” or “why does the vision seem cloudy at times?”. It was almost like therapy, and afterwards, things couldn’t be better. We’re making more progress, getting more traction, and maybe most importantly we’re happier than ever before. I’m not sure if you’d call this coming to our capabilities, our sensibilities, or some combination thereof, but it feels great!

http://www.cdixon.org/ chris dixon

It’s great that you guys are flexible like that. The trick is balancing that with 1) knowing when you find something good and the focusing on that, and 2) being aware of your capabilities and whether you can do what you need to do to build something people love. If you don’t have the capabilities, think about bringing someone on to help.

http://www.acktie.com/ Jamie Sowder

Solid follow-up points. We’ve recently found ourselves a mentor we really respect to help address those points, and your advice aligns very much with his.

JamesHRH

I highly recommend The Opposable Mind – http://www.amazon.com/The-Opposable-Mind-Successful-Integrative/dp/1422118924 .

It shares the core theme.

http://www.cdixon.org/ chris dixon

looks interesting – thanks

http://www.facebook.com/posinaga Pablo Osinaga

Chris – I wonder if you have any advice on team dynamics and tensions between sensitivity and capability.

We are a team of 3 founders with (I believe) the right collective balance of sensibility and capability for the stuff we are working on.

We experiment tension sometimes – eg capability-driven wants to get shit done, and thinks in terms of Trello boards, etc. Sensitivity-driven wants to look at the big picture and gets overwhelmed by thoroughness and needless small detail orientation.

Other than consumer-tech startups, what other industries need this balance and have mastered “best practices” for dealing with it?

Any other thoughts?

http://www.cdixon.org/ chris dixon

That’s really hard and sometimes just comes down to personalities. Ultimately one person needs to be in charge (no co-CEOs!) and decide what to do.

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http://www.facebook.com/magdalenaday Magdalena Day

There´s a TED talk about the struggle between our “Present Self” vs. our “Future Self” http://www.ted.com/talks/lang/en/daniel_goldstein_the_battle_between_your_present_and_future_self.html

How thinking in our today-happiness can or will affect our long term-happiness.

I´m sure it all relates to: short term-incentives. Gratifications. We all have this dilemma, so it is not always about matching personalities in a team. Both sensible and capable founders´ might actually have this battle with themselves when thinking about their startup future.

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Chris Dixon