It is vitally important for entrepreneurs and startups to have a well-defined business purpose. The entrepreneurial world is driven by edge people who are outside of the core, thriving on energy from creativity, disruption, change, and who share an idealistic outlook and purpose. They have a clearly defined reason for the existence of their businesses beyond making money, making products, or provide services. They have a solid ‘why’, intentional action, and clear direction.
Having in mind this insight, I recently invited Massimiliano Sulpizi to discuss his outlook on purposeful entrepreneurship and personal leadership. Massimiliano is an avid venture capitalist, merchant banker, entrepreneur, and executive. He is the creator of EquityMatch.co and CEO and Founder of HSMI, where he has advised clients in finance, energy, infrastructure, fashion, real estate, and high-tech sectors, with fundraising over €100M. He currently serves as an advisor and board member to numerous EU healthcare and technology startups and growth-stage companies.
In an insightful talk, my guest covered topics ranging from his personal leadership formulas to the indispensable ingredients of successful entrepreneurship, and also:
What is the role of confidence in a successful entrepreneurial journey
Why simplicity is the new oil
What are the key ingredients of influential leadership
Why MBA is no longer an essential asset of an entrepreneur
Why the idea is secondary and execution is key
What are the biggest mistakes startup founders make
What are the signs of potential unicorns
And why focus is the fundamental element of personal productivity
IK: You are an entrepreneur, a venture capitalist, a board advisor, a CEO, a podcaster, and a philanthropist. Where did you start your journey and how did you get to the point where you are now?
MS: Well, it was a long journey. I started my first brokerage company at age 28 and, a few years after, I found myself in the insurance sector, later - in banking - and after that came venture capital. It was an early stage of the venture market development. Today, everyone knows what an incubator or an accelerator is, but back in Italy in 2010, it was clear, maybe, to ten people.
In 2014, I decided to sell everything because it was not the right environment. Then, I started doing advisory, primarily in the corporate finance sector. And after that, I moved to the venture capital industry where I'm racing ahead now.
It is my firm belief that if you were born to be an entrepreneur, you will get there one day. So, I finally reached the right destination.
IK: You have founded and sold a few companies at the early stage of your career. What were the best leadership lessons you’ve learned along the way?
MS: Yeah, I’ve definitely learned a lot.
The first lesson was about confidence. You shouldn’t be too confident at the beginning of your journey. You need to fail ten times before you succeed. I was too confident. When you are too confident, you don't question yourself. Instead, you believe you're always right and so your inevitable failure is just around the corner. Thankfully I didn’t completely fail, although my businesses went through many difficulties and very tough times.
The second lesson was about change. When the time comes, you need to change. Regardless of what was done and your current success, you need to move within the fast-paced environment and, if you can't predict the next change, just move on ahead.
IK: Okay, that’s clear. You’re not only an investor but also a mentor. Over the course of your life, you probably had mentors who helped you to become who you are right now. What was the best mentoring advice you’ve ever received?
MS: I was lucky enough to have a mentor when I started working at an insurance company.
The best thing that he has advised me by far was to keep it simple. My American friend always tells me: “Keep it simple like stupid.” If you want to do business, it has to be simple so everyone can understand it. If everyone understands what you do, maybe you can find some clients. If it's too complex, just a few people will understand and, among these few, perhaps one will buy.
The second piece of advice is to keep it short. If you can tell a story in two words, don't use three. Complexity doesn’t work in life.
That’s how I do my business. I try to do everything as simply as I can. And I try to talk only when it is needed. The more you talk the less you actually think. You can't think and talk simultaneously, right? So talk only when you need. Obviously, you need to give yourself hours to think every day. That’s the only way to improve things.
IK: Speaking about your personal leadership, having been a leader for so many years, how have you scaled yourself as a leader to grow into the job? What was your approach to personal growth?
MS: I don't think you can become a leader. I think leaders are born to the role. Still, you can improve your leadership skills, that’s for sure.
In my early years, I wanted to become a professional actor and studied at a local academy in Rome.
I was lucky to be taught by a genius acting professor who told me that only one student from the whole class would normally become a successful actor. The rest will fail. But, whatever you're going to do in your life, acting will help you to communicate effectively and to build your confidence. On a theater stage, you can't make mistakes. You should build extreme confidence to speak up in front of the thousands of people who are watching you. A leader has to sound extremely confident. It cannot shake and should communicate effortlessly. If you need to make too much effort to communicate, I don't think you're a leader.
Back then, I was the least confident person in the room. I was the guy who never walked into the room if the acting session had already started.
I’ve long left the academy behind me, but thanks to it, I’ve built this vitally important confidence that allows me to speak in front of a big audience as easily as I am speaking to you right now.
IK: And right now, at this particular moment of your life, what are you trying to get better at as a leader? What leadership skills do you want to learn?
MS: I have finally learnt how to be patient. I used to have almost zero patience when I was younger.
Alongside this, as a leader, I'm really working on being better at listening. I talk only when it's needed and mostly listen to others. I sit down, listen, and, when it is all finished, I need maybe three-four words to summarize the conversation.
It takes time to get there, believe me.
IK: You own several businesses. Can you share a few words about your matchmaking investment platform? How did this business idea come into your mind and what’s your vision for the future of your company?
MS: Equity Match was born thanks to the current pandemic. I decided to create a platform where founders can find investors and vice versa. It is not just about matchmaking. Our platform democratizes the way founders can reach investors. We tried to map all existing investors globally and connect them with founders wherever they are in the world.
In life, three fundamental things stand out for me: education, knowledge, purpose. Without knowledge you can do nothing, right?
That's why you need someone who will educate you.
In the early stage of their journey the majority of entrepreneurs have no idea about how to write a business plan, kick off business from an idea to planning, from planning to LTV, and from a scale-up to an IPO. It took me 20 years to do this, I don't think everyone has that amount of time. So, we also aim to create a university to educate entrepreneurs in two-four years.
Equity Match is my fifth and probably is going to be my last startup because I want to dedicate myself to venture capital and to establishing a few funds.
IK: You’re an MBA alumnus. How did it help you in your entrepreneurial journey?
MS: When I launched my first startup, I had just graduated from university and, after doing my Master's and MBA, I was still a pretty premature entrepreneur.
I see entrepreneurship as being radically different to business models and business cases. Master’s and MBAs are too technical. The reality is completely different. When it comes to real-life business, you can use maybe 2% of what you’ve learned at your business school.
That’s why the brightest venture capitalists aren’t MBA graduates. MBAs make everyone the same and when you are not constrained inside the framework of an MBA, your brain is freer.
IK: As a venture capitalist, how do you select startups to invest in? What are your criteria?
MS: When it comes to seed and pre-seed stages the criteria are different. Normally, I spend my time talking to funders to understand who they are, how ambitious and purposeful they are, and to get along with them.
My main message to them is that the idea is secondary. Purpose and execution are key. The founders, those who are capable of executing, are always paramount. If they are not capable of working 15-16 hours a day, the entrepreneurial journey can be challenging. I value big-headed founders who are purposeful and confident enough, but, at the same time, maintain some space to listen and to learn. If you can't learn, you will never improve. If you can't listen and analyze, you will fail.
I rarely consider profit and EBITA when it comes to venture capital. At an early stage, we evaluate the idea, we understand the founders, their purpose, and the market - these are the key drivers. We want to understand if the business model works and if it can be monetized in three-five years.
IK: What are the biggest and most common mistakes startup founders make?
MS: One of the most common mistakes is to instantly target the global market. It’s not doable from the start because this expansion should be backed by extreme funding. Instead, they should be focused on a particular region, take one step after another, and scale their businesses gradually.
Far too much attention is paid by founders to products and services at the early stage of business development. A business is not defined by products or services. A business is defined by sales. If you're not good at selling or if you are not good at building a business that can sell, you will fail, unless you receive funding every year.
IK: Most startups fail. What are the signs that help you to separate potential unicorns from market outsiders?
MS: Generally speaking, unicorns grow two-three-four hundred percent year by year from day one. The main reason is that the technology and market are there at an early stage.
When a unicorn gets to the market it reacts very well, very fast right away by producing millions of subscribers from day one.
Spotting a unicorn is, however, never an easy process.
Watching the market’s reaction to your product without extra 10-15 pivoting helps you to understand if this startup is a unicorn. There is no way they don't grow at least 30-50% a month or 100% growth per year. In my experience, I saw three startups at this level.
IK: When it comes to your time management, what’s your personal productivity advice?
MS: Being productive is a big deal.
Achieving productivity doesn't mean working 20 hours per day although if it’s needed you may well have to.
Productivity comes with focus. Being productive means that you have to be extremely focused while working and try to analyze as many things as you can. And you have to not only grow your personal productivity but also your team efficiency. That means to constantly level up the collective focus and expertise.
Throughout my life, I met very few people who can keep a laser focus on their activity and stay on the page for a long period of time. So, if you can get this level of focus, put all your efforts into staying there.
And obviously, productivity comes when you enjoy what you do. If you love what you do, your productivity goes through the roof and the results are dramatically different.
IK: Personal branding is becoming more and more popular and is trending these days. What’s your attitude to personal branding? How important is it in your industry and personal and professional life?
MS: Well, yes, these days, personal branding plays a big role. I brand myself by being authentic and sharing and documenting my business journey online.
It’s simply not enough just to have expertise. You have to share your knowledge, build trust, and be visible to create recognition and awareness among your followers.
I greatly appreciate hearing from readers. Please write at firstname.lastname@example.org and share your thoughts on addressing this topic.