David here.

Over the past few days, we’ve been discussing how important it is to invest in entrepreneurs who are flexible and who can adapt to challenges.

And while these are two important characteristics, there’s one more that’s important to gage from the get-go: Openness to feedback.

It’s really hard to successfully run a business if you think you have all the answers.

That’s why being open to feedback demonstrates the ability of a founder to accomplish a goal, no matter how many steps it takes to get there.

Note that the path won’t necessarily be the path the entrepreneur envisioned, but if they are open to change, they have a better chance of succeeding.

The companies primed to grow and scale are the ones who are willing to take feedback, and take it often.

Let’s dive into exactly how to find those companies… and exactly which types of founders to avoid.

The Art of the Pivot

A pivot is a change in business direction to test a new product hypothesis after getting feedback on an original idea.

Pivots are a good thing… because in the startup world, they’re a sign of a healthy company and founding team.

Some of the biggest companies we know and love today started out as entirely different ventures:

  • Netflix started out as a mail-order DVD service.
  • Slack was founded as a video game endeavor called Glitch.
  • Nintendo started out as a playing card company in the 19th century.
  • Even YouTube first started out as a video-based dating service.
  • And so many more companies led by founders willing to change their original ideas for the sake of their audience.
Pivots are central to the idea of the “Lean Startup,” which we discussed a while back.

Lean startups create a “minimum viable product” (MVP) that they test on their target market to assess their product/market fit.

The feedback that founders receive will either make or break their MVP. Either a company can move forward with their original design, or they’ll have to go back to the drawing board and pivot to another hypothesis.

Sometimes, a pivot can be pretty simple… just a few tweaks here and there. But other times, a pivot may bounce a company to an entirely new market or niche.

It all depends on what’s working… and it all centers on feedback.

But why don’t all entrepreneurs ask for feedback?

People are afraid of receiving it!

Psychologists and psychiatrists alike have spent many hours trying to understand why humans are so terrified of asking for feedback.

Jay M. Jackman and Myra H. Strober – noted psychiatrist and Stanford Business School professor, respectively – conducted landmark research on this topic.

While some of their research was intuitive, there were some mind-boggling anecdotes:

  1. More than half of the executives they worked with over the course of their research NEVER asked for feedback before. Why? Because they expected the worst. Many people would rather avoid the truth than face it head on.
  2. People most likely to be afraid of feedback are people who have “psychologically maladaptive behaviors, such as procrastination, denial, brooding, jealousy, and self-sabotage.”
As a potential investor, it’s important to work with the founders who are willing to seek out and accept all types of product feedback.

Why does this matter to us?

The best founders – and teams as a whole – are the ones who can graciously accept feedback and use that feedback to design an even better product.

Because no matter how passionate a founder is about their company, if it doesn’t fit the market, it’s not going to be successful.

That’s why I always look for founders who are willing to take a step back, take a hard look at their product, listen to their audience, and adapt where necessary.

I highly suggest you search for these types of founders, too, as you evaluate companies.

And today, I’ve sourced six different founders who hit the mark.

They work in some of the world’s largest industries, and they’re experienced enough to know exactly what changes need to be made for their businesses to stand out from the crowd.

In fact, I’ve been working with a few of these founders for a while… and each one continues to impress me day after day.

I’m sharing all the details on these companies in a dealroom analysis meeting… and sharing exactly how you can take the first step toward securing a claim in each one of these deal recommendations that come straight from the independent research team.

Just click here to enter the meeting.

Very best,

David Weisburd