Are We Ever Ready

Early in my career, I was passed over for a promotion.

The CEO had blocked the move, offering an explanation that left me puzzled:

"I don't think Steve's ever failed."

At the time, I struggled to understand what he meant. Wasn't a track record of success precisely what qualified someone for greater responsibility?

It took me years to appreciate the wisdom behind his concern.

A few years later, a different CEO took a chance on me. He promoted me into a role that, by any objective measure, I wasn't fully prepared for.

What made him an extraordinary leader was his ability to see potential in people that they hadn't yet recognized in themselves. He had more faith in what I could become than I had in myself.

I felt like I'd been thrown into the deep end of a swimming pool. But I also knew someone was watching from the edge, ready to offer guidance if I needed it.

I had the freedom to make mistakes, the responsibility to figure things out, and the support to succeed.

And it all worked out.

In my first 14 months, I oversaw more than $1 billion in acquisitions, including Kelley Blue Book, vAuto, and VinSolutions.

Looking back, the most important thing that CEO gave me wasn't a promotion.

It was permission to grow into a role I wasn't yet ready to fill.

Today, as an early-stage venture capital investor, I find myself on the other side of that equation.

And I've come to believe that one of the most important judgments we make as investors is recognizing potential in entrepreneurs that they may not yet recognize in themselves.

The Entrepreneur's Paradox

There's a fundamental paradox at the heart of entrepreneurship.

The founders most capable of building extraordinary companies are often attempting things they've never done before.

They're constantly operating beyond the boundaries of their experience.

A first-time founder may have never hired an employee, raised institutional capital, negotiated a major enterprise contract, or managed a board of directors.

And just when they begin to master those responsibilities, the company doubles in size.

Suddenly, the skills required to lead ten employees are insufficient to manage fifty. The founder who excelled at building a product must learn to build an organization.

And then the process repeats.

The next funding round. The next hundred employees. The next existential crisis.

With every milestone, the job changes. And with every change comes an uncomfortable question:

Am I really ready for this?

Perhaps we're asking the wrong question.

You're never really ready for the next big thing. And that's precisely why it's the next big thing.

The Psychological Price of Ambition

Psychologists have a name for the nagging suspicion that you don't belong in the room: imposter syndrome.

It's the feeling that everyone else knows something you don't. That your accomplishments are somehow undeserved. That sooner or later, someone will discover you're making it up as you go along.

Here's the uncomfortable truth.

To some extent, we all are.

There's no instruction manual for building a category-defining company. No playbook that anticipates every crisis, every competitive threat, or every difficult decision.

And there's a powerful argument that feeling like an imposter isn't necessarily evidence that you're unqualified.

It may simply be evidence that you're growing.

Consider Harry Truman.

He had been vice president for just 82 days when Franklin Roosevelt died in 1945. Suddenly, Truman found himself leading the United States through the final stages of World War II, confronting decisions for which he had received remarkably little preparation.

He reportedly described the responsibility as feeling as though the moon, stars, and planets had fallen on him.

Or consider Brian Chesky.

Trained as an industrial designer, Chesky had no conventional business education when he cofounded Airbnb. He had to learn how to recruit executives, manage crises, and lead a global organization while simultaneously building one.

Neither arrived at his defining challenge with a perfect résumé.

Both had to grow into the responsibility.

History is full of examples like these. People who confronted responsibilities far beyond their previous experience and discovered capabilities they didn't know they possessed.

We tend to imagine that successful people have some extraordinary reservoir of confidence. That they wake up one morning knowing they're ready to lead, build, or attempt something audacious.

But confidence is rarely a prerequisite for doing something extraordinary.

More often, it's the consequence of having attempted something difficult and discovered you were capable of succeeding.

The Hard Thing About Hard Things

In his book The Hard Thing About Hard Things, venture capitalistBen Horowitz describes what he calls "The Struggle."

It's the dark, lonely period when a founder begins questioning everything.

Their strategy. Their decisions. Their abilities. Sometimes even their reasons for starting the company in the first place.

Horowitz makes an important observation: the hardest challenges of leadership rarely come with a playbook.

CEOs must make consequential decisions with incomplete information, often while privately managing enormous uncertainty.

The psychological burden can be overwhelming.

And this is where I think entrepreneurs need to recognize three important distinctions.

First, self-doubt isn't necessarily a weakness.

There's a difference between recognizing what you don't know and believing you're incapable of learning it.

The former is self-awareness. The latter can become self-imposed paralysis.

Second, leadership requires constant reinvention.

The person capable of building a successful five-person startup isn't automatically equipped to manage a 500-person company.

But the best entrepreneurs understand that their own development must keep pace with the growth of their businesses.

They acquire new skills. They recruit people who are better than they are at specific disciplines. They learn to delegate. They evolve.

Third, the absence of self-doubt isn't necessarily a strength.

In fact, I'd argue that an entrepreneur who never questions their abilities may be a considerably riskier investment than one who occasionally does.

Confidence without self-awareness can become arrogance. And arrogance is a particularly dangerous quality in a founder navigating an uncertain future.

The objective isn't to eliminate self-doubt.

It's to prevent self-doubt from becoming an excuse for inaction.

Implications for Venture Investing

This brings me back to that CEO who took a chance on me early in my career.

He wasn't making a judgment about whether I possessed every skill required for the position.

He was making a judgment about my ability to acquire those skills.

That's an important distinction, and one that influences how we evaluate entrepreneurs at Automotive Ventures.

We routinely encounter founders who have never built a company before. They've never managed a large organization, navigated a major financing, or faced the complexity of scaling a business.

By conventional standards, many aren't ready.

But that's not necessarily what we're underwriting.

We're evaluating something more fundamental.

Can this person learn faster than the challenges confronting them?

Do they possess the intellectual curiosity to question their assumptions? The humility to acknowledge their limitations? The resilience to recover from setbacks? The determination to keep moving forward when the path becomes uncertain?

Can they attract exceptional people, absorb difficult lessons, and reinvent themselves as the business demands?

Because the question isn't whether a 28-year-old entrepreneur is ready to run a $100 million company.

The question is whether that entrepreneur has the capacity to become the person capable of running one.

There's a profound difference between investing in who someone is today and investing in who they have the potential to become.

And that's where some of the most extraordinary venture returns are made.

The Courage to Begin Before You're Ready

I've come to believe that we're almost never fully prepared for the opportunities that have the greatest potential to change our lives.

The responsibilities that stretch us the most are often the ones that teach us the most.

And the people who ultimately accomplish extraordinary things aren't necessarily those who begin with the greatest confidence.

They're the ones who are willing to proceed despite their uncertainty.

For entrepreneurs, there's a lesson here.

If you wait until you're completely ready, you may spend your entire career preparing for opportunities that have already passed you by.

For investors, there's an equally important lesson.

Our job isn't simply to identify entrepreneurs who possess all the skills required to succeed today.

It's to recognize the ones with the extraordinary capacity to become the leaders their ambitions will demand tomorrow.

And sometimes, like that CEO who took a chance on me years ago, our greatest contribution is having more confidence in someone's potential than they have in themselves.

You don't become ready and then rise to the occasion.

Sometimes you rise to the occasion.

And that's what makes you ready.

At Automotive Ventures, we're not just investing in the entrepreneur sitting across the table from us. We're investing in the person they're capable of becoming.‍