complicated concepts

Beware of the "charmers"

A few months ago I wrote an article that compared investing to dating. I made the case that you've got to look at lots of different options in order to see who is actually the best of the bunch.

Ok, so. Last week I realized there's another similarity between dating and investing: the danger of a charmer.

Let's pretend for a moment that I'm a woman (I am). I meet someone at a bar.

He's an extrovert. An extrovert with a great smile. He strikes up a conversation, and right away I'm hooked.

He's interested in everything I have to say. He maintains eye-contact. He tells great jokes, seems to be friends with everyone at the bar, and has fascinating interests.

And at the end of the conversation, he asks for my number. I gladly hand it over.

But after a few dates I realize that this person kinda... sucks. Those interests I thought were so fascinating? Yeah, no.

Turns out he doesn't actually meditate daily... he just has a subscription to Calm that he never uses.

He doesn't really volunteer at Boys & Girls Club... he just lives next door to one.

He doesn't grow his own vegetables. His roommate does.

It takes a few dates, but I get it. This person is a charmer. He charmed me with his smooth talking and unique interests, but it's all a show. He's great at making people think he's a catch, but he doesn't put in the work to be a catch.

See where I'm going with this?

Yes, but let's go there anyway.

Some founders are great at fundraising.

They know how to spin a story, they're great at making personal connections with investors, and they've made an art out of name-dropping.

There is nothing wrong with this founder. As long as they're actually doing the work of building and scaling a business.

Here's what I mean:

A number of years ago, our team took a meeting with a founder who was an extraordinary fundraiser. He was an exceptional story teller, had a high EQ and so formed strong relationships quickly, and shared a long list of investors who had already verbally committed to his round.

When asked about his customer acquisition strategy, customer discovery, and retention numbers, he didn't have great answers. He hadn't actually done much work on the business yet.

But people loved him! And so they invested.

Later that week, we took a meeting with another founder. This one was not as obviously charming.

She was soft-spoken, a bit socially awkward, and was solving a problem in a space that felt kinda boring.

But when asked about her customer acquisition strategy, customer discovery, and retention numbers, it was clear she was hustling hard. This founder was doing the dirty work: getting on the phone with potential customers, testing variations of her messaging, closing deals.

I'll give you 1 guess as to which one raised more money.

Yep – the charmer.

And I'll give you one guess as to which built a profitable company and saw a decent exit.

Yep – the awkward.

What's your point, Kera?

Look – not all charming founders are terrible business owners. And not all socially awkward founders are wonderful business owners.

It's your job to look beyond the first impression and dig into the meat of the business.

  • How many customer discovery calls have they done?
  • Do they have a strong sense of who they're selling to?
  • Do they deeply understand the problem they're trying to solve? How do you know?
  • How are they tracking retention?
  • How are they thinking about customer acquisition?
  • What makes them different from the competition?
  • How did they find their early users?

These are the questions to dig into... not who else is on their term sheet, or where they went to school, or what kind of vegetables their roommate is growing.