A chip on the shoulder drives founders, until it steers them

Mark Suster wrote this on his blog, Both Sides of the Table, as a description of what he looks for as an investor. His reasoning is about incentives. People already comfortable inside an industry have a stake in how it works, and they rarely try to overturn it. People outside it, who feel overlooked or underestimated, have less to lose and something to show. Much disruption comes from that position.

The pattern appears often. Founders who were rejected by established firms, who grew up without money or who were told a market was not for them tend to push harder and accept fewer limits. The drive carries them through rejection, which every founder meets, and makes them less likely to accept the industry’s explanations of why something cannot be done. In software, where a small team can challenge a large company, that stubbornness counts for a lot.

The line is weaker when the chip starts making the decisions. A founder who needs to prove something to one person, such as a former boss, a parent or a rival, can end up building for that audience rather than for customers. The product becomes a rebuttal. Such founders also often find it hard to take advice, since advice can feel like the old dismissal returning. And a grievance can turn into contempt for customers or partners who do not see the vision right away.

It is also a hiring heuristic, and every heuristic has blind spots. Investors who look for a chip on the shoulder will favor founders who display one, loudly. Plenty of good founders are calm, secure and driven by curiosity rather than proof. They may pitch less intensely and be passed over for it.

The useful form of the idea is to know what one is out to prove, and to whom. If the answer is that the market has a problem nobody solved, the chip is working. If the answer is a person, it is worth asking whether the company is the best way to settle that account.