This thread on Quora got me thinking about how investors should think about the work rate of the founders they invest in.
The first answer is that it shouldn’t matter.
If a founder finds a way to build a valuable business in two hours a week we’d be delighted for her. Everybody wins.
In a world of perfect information it would be that simple.
However, as we know, the reality of startups is that investors have to make decisions based on very little information and without much time to build trust. As a result we have to rely on proxies and inferences. And, even though it’s an input rather than an output metric one of those proxies is work rate.
Big caveat: founders should never measure themselves by the number of hours they work. They should focus on what they are getting done.
My belief, and I realise now that I’ve never seen a study, is that up to a point there’s a correlation between hours worked and success.
At the risk of making some people angry, I’m going to go out on a limb and put some numbers around this. Different people work with different efficiencies of course and all I can offer here are broad generalisations. Do remember though that I’m talking from experience with entrepreneurs who have achieved at least some level of success, most of whom are highly productive.
There were all sorts of numbers bandied around on Quora, and people often talk up the amount of time they spend at work, but from what I’ve seen forty or even fifty hour work weeks aren’t usually enough for entrepreneurs looking to build venture scale businesses. On the other hand weeks of more than eighty hours are too much for most people to sustain for any length of time. Building a startup is a marathon, not a sprint, and it’s crucial that family, friends and personal health aren’t forgotten.
People like Bill Gates and Elon Musk find ways to work for more than this for extended periods of time, but that’s truly exceptional. As an investor, I love exceptional, but working truly exceptional hours isn’t there only route to success.
So, my advice to would be entrepreneurs looking to build companies worth £100m+ is to be prepared to work 60-80 hours per week on average, but with significant fluctuations.
That’s not working for the sake of it, of course. But at any startup enjoying even moderate success the list of things that could be done is never ending.
I reckon my working week averages around sixty hours.
All that said, I’ve never heard of an investor asking how many hours a founder works. Rather we ask how the business is doing. When it comes to work rate we look for clues like response times to emails, late working sessions in the office, and things happening over the weekend. More generally we take comfort from little signs that founders are truly committed and are doing everything possible to win, and get worried if personal issues take priority when things aren’t going well.
I realise that working a 60-80 hour week isn’t for everybody and isn’t practical for some people who might like to. I’m not saying those people shouldn’t start companies, but they should think through this issue carefully.