Like a lot of startups, we looked at our banking situation with the news that Silicon Valley Bank (SVB) and Signature Bank in the United States went belly up.
The failures highlight our complicated relationship with banks and bankers but provide valuable lessons for tech startups and business leaders.
There is now concern about more bank failures and the overall stability of banks across the globe. However, as of this writing, the best guess is that governments have no interest in the major economic disruption caused by failing banks which would trigger more bank runs, which would have a domino effect, making it likely they will step in and make depositors whole regardless of the size of their accounts.
It’s too soon to know how these banking problems will impact credit availability and/or lending for startups around the globe.
This isn’t helping our view of bankers.
In the classic American movie, It’s a Wonderful Life; Mr. Potter, the banker, is the villain. Wearing black and confined to a wheelchair (the color black, along with disabilities and disfigurement, was Hollywood’s shorthand of moral corruption at the time), the audience was clear on who to jeer.
The film reflected post-depression feelings toward bankers. Bankers were the people in charge of institutions that went insolvent, causing millions to lose their life savings, and the same people that would foreclose on family farms and houses, making them homeless. (Everyone seemed to forget that the hero, George Bailey, was a banker as well—just a different type.)
In 2008, bankers were the ones behind the economic collapse. Again, more foreclosures and home losses with seemingly little accountability for the people that made millions while others paid the price.
We resent that we need banks, they charge us for access to our money, and we don’t get much in return. At least with an airline, you get to go somewhere.
We often fail to recognize how today’s banking system is one of the miracles of the modern era. They are the engine driving our economy by providing capital and loans that fuels the entire economy. Without these banks, some version of them, the world would look very different.
Without banks, we wouldn’t have the conveniences of modern life: credit cards, mortgages, car loans, school loans, and—most importantly for startups—business loans.
What does this have to do with Pathfinders, you might be asking yourself? It comes down to risk tolerance and risk management.
Pathfinders have a higher tolerance for ambiguity and risk than the typical person. They are not reckless, rather than can thrive in an environment where answers are not yet clear and are willing to take chances as they build something.
Pathfinders are the most likely to succeed as the first salesperson in a startup. And we have found that businesses want Pathfinders for specific roles.
This is where to know your risk tolerance.
While it might appear the low-risk choice for a first salesperson might be a Playbook salesperson, the opposite is true. A Pathfinder is a safer bet because they have the deep skills and attitudes to thrive in the role.
When it comes to a manager or other business leader, picking a person for a project, or developing a new path for the company, you have to be sure you want a Pathfinder.
We’ve been in situations where a Pathfinder is brought in, does a great job, and is ready to take the next step when the leadership that brought them in gets cold feet.
They thought they wanted to explore something new; they thought they wanted a new market, but what they really wanted was the status quo, just a little bit better. When this happens, the Pathfinder won’t remain with the project or the company for long. It’s not a match.
Too often it turns out to have been a lot of wasted effort.
How do you avoid that common mistake? Some ideas:
Reflect: Be honest about what you are really trying to accomplish. Is this something that you will support through thick and thin? Will your career or your job be in jeopardy if this project doesn’t turn out? How will that impact you down the road?
Challenge: Invite people you trust to challenge your thinking before you put the Pathfinder to work on the project.
Risk: How much risk are you willing to take to give the Pathfinder and the project the best chance for success? What are your parameters? Are these flexible? Do you have a decision tree on how to move forward at certain parts of the project?
Anticipate Success: We often anticipate failure, but what if the Pathfinder is more successful than you considered, what do you or the company do then? How will this strategically fit into your current goals and plans? Will this complement current offerings? How will the rest of the company or team respond?
So, you still want that Pathfinder. Excellent choice. Now, how do you find one?
Wouldn’t it be great if there was an assessment tool focused on the mindset/deep skills of a Pathfinder, allowing you to get the right people in the right roles?
We have good news.
For the first sales hire of a B2B tech startup, we already have The Right Five, which covers both the deep and vocational skills required to be successful. You can watch a demo here.
For every other type of Pathfinder, we’ve decoupled the intangibles, the deep skills from The Right Five assessment and offer this as a standalone online assessment through The Pathfinder Company.