Photo courtesy of ROUSH CleanTech.

Photo courtesy of ROUSH CleanTech.

I’m not one for judging a book by its cover, but sometimes it’s the best policy.

Peter Thiel justifies one snap judgment in his book “Zero to One: Notes on Startups, or How to Build the Future.” In this series of posts based on the book, I’ve highlighted important questions raised by Thiel, including one he calls “The People Question.” To succeed, Thiel says, a company must have the right people in the right positions.  

Sounds simple enough, but how do you know who is “right”?

One screening test Thiel’s company used when evaluating which clean tech companies to back was actually based on looks. “Energy problems are engineering problems, so you would expect to find nerds running clean tech companies,” he writes. “The ones that failed were run by shockingly nontechnical teams. These salesmen-executives were good at raising capital and securing government subsidies, but they were less good at building products that customers wanted to buy.”

Thiel’s tech venture capital firm saw this coming: “The most obvious clue was sartorial: clean tech executives were running around wearing suits and ties. This was a huge red flag.” Real technologists wear t-shirts and jeans, he says. His fund instituted a blanket rule that it would not invest in any company whose founders dressed up for pitch meetings.

“There’s nothing wrong with a CEO who can sell, but if he actually looks like a salesman, he’s probably bad at sales and worse at tech.”

Key take away being that it is about the team’s ability to execute that ultimately fuels a sustainable business. Never confuse the ability to raise capital with the organizational capability to know what to do with it. Good ideas get funded. And when you get funded, how will you execute and sustain the business?

This is really about trusting your intuition. Thiel’s gut feeling recognized a “disconnect” between the doomed clean tech companies’ product and how they represented themselves.  

So here’s your fuel for thought: Are you listening to your gut when making decisions about the right people for the right job?   

About the author
Joe Thompson

Joe Thompson

President, Roush Products

Joe Thompson is the president of Roush Products and formerly served as president of ROUSH CleanTech since the company’s inception in 2010.

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