In the age of Google and other powerful search tools, finding the right answer becomes increasingly easy. What grows as a challenge on the other hand, is asking the right questions to cut through the abundance, the noise, the BS and actually move the needle – be it as an innovative entrepreneur, as a CEO, strategist, team leader or personal friend. In addition, it might become increasingly difficult to trust your gut feeling in a world where everything is supposed to be backed by hard facts and data.
Prelude: This is (not only) for Entrepreneurs
This Sparkr Podcast is really valuable for entrepreneurs who are at the beginning of building a team, a company and that are looking for investors. If you are an entrepreneur or want to go down that path, take your time to listen to the complete conversation because it uncovers many insights on how to approach and work with investors, the importance of open, sometimes tough conversations as well as the importance of reflecting on your goals and character. In this conversation you get insights from a longtime investor and founder of one of the largest and oldest venture capital firms in Europe.
It’s the Questions, Stupid
For this episode of the Sparkr Podcast I initially set out to learn more about the art of asking the right questions. For that I met with successful and thoughtful investor Florian Schweitzer who started young as an entrepreneur and along the way founded b-to-v – a venture capital firm managing about EUR 330m in institutional funds, partner funds and direct investments of private investors. B-to-v’s portfolio included hits such as Facebook or Xing and now features companies like Volocopter, Sum Up or Outfittery. Their “anti-portfolio” of the hits they missed is also impressive: It includes Uber and Square – both unicorns today.
The reason I asked Florian to do a Sparkr Podcast about the art of asking the right questions is because first, I had an excellent, eye-opening personal conversation with him a couple of years back which was influential for the foundations of Sparkr. Back then, I was amazed by his ability to ask powerful questions and get right to the essence. Second, I knew that as an investor, Florian is highly trained in asking questions, identify the crucial information and filter the noise. Third, I knew that Florian is a person that reflects on his misses. When you miss the chance to invest early in Uber or Square, a thoughtful person like Florian definitely gains a lot from these experiences.
As our conversation for the Sparkr Podcast evolved, it turned out that the chat we had was actually not only about asking the right questions but also about being present, seeing behind the curtain of people’s motivations as well as the importance of intuition, trust, relationships and passion. That’s why eventually I decided to title this Sparkr Podcast episode “Why every Business is People Business - The Importance of Listening, Being Present, Intuition, Passion, Trust and Relationships”. When thinking about it, these points might actually all have in common to be very important ingredients of good questions.
The Right Questions Come from Openness
However, let me say right here, that there is no golden recipe or script for questions. But there is a mindset that constitutes the foundation for good questions to arise from. This mindset is one of sensitivity, contextual awareness, presence, humbleness and curiosity. Even shorter: openness.
Florian says, “there are no bad questions. Each question is good, but it depends on how you phrase it and on the timing. For example: Don’t ask for somebody’s weaknesses right away without showing some of yourself. That way you get more honest answers.” Florian adds: “Eventually it is about being present in the moment and getting the person in front of you.”
To better understand what the other person is like, you have to observe that person, look at her and listen a lot. Florian says: “After usually 10 Minutes I have a pretty good idea of who’s in front of me.”
I personally experienced how powerful and valuable these first 10 Minutes can be. When Florian and I had our private conversation a couple of years back, I noticed how closely he observed me while I was talking and how much he also paid attention to what I did not say out loud but what came across between the lines in form of body language, tone and so on. In these 10 Minutes Florian was rather passive and observant rather than active and talkative. But what a great investment of his for the both of us!
Too many people believe that a conversation is like a competition of who has more speaking time, who has more interesting things to say and so on. That is not a conversation – at least not in its early stage. For a conversation to flourish, you ought to be open not competitive, humble not seeking to impress. That can be a challenge; especially when talking with entrepreneurs. One of the challenges can be to remain open when the other person might be rather aggressive, arrogant or stubborn – which by the way the entrepreneurs who end up building successful companies often are, Florian adds.
Behind the Curtain
As soon as Florian believes that he has a good basic impression of the person in front of him, in a second step, he tries to find the contradictions in what people say, how they act and so on. Florian says: “Finding contradictions helps a lot to find out who’s in front of you.”
To dig deeper “you ask questions a bit left and right of the path”, Florian adds. “And when you notice a weak part in the path you continue the questioning there to find the truth.”
C’est le ton qui fait la musique
Since these kinds of conversations can sometimes lead to uncomfortable situations, I asked Florian which tone he uses when a conversation might get tough. Again, Florian came back to the importance of presence, contextual awareness and sensitivity: “I think that is a communication question where sender and receiver have to be in a resonating mood.”
If your communication style doesn’t resonate with the other person you have to find different approaches. “Some people can be really stubborn in an argument and some just don’t listen”, says Florian. When you are dealing with stubborn people, one tactic can be to make them believe that your idea was their idea. Florian puts it this way: “People need to believe that it was their idea and to reach that you might have to work on the topic for months. Eventually, if your counterpart then comes to you with your idea and sells it to you as his own, you’ll need to cut back your ego.”
The Perfect Entrepreneur (and Company)
Finding a good relationship with one’s ego is something very important – be it as entrepreneur, leader or decision maker in general. Very often, you as a single person do not embody all the qualities and abilities that are needed for success. And it is crucial to know what your abilities are and where they end. If you want to find out more about your personality type, do this test (I did it a while ago and it was very helpful).
Florian describes “the perfect entrepreneur” as three different people: the optimist, the sceptic and the mediator. “There’s always one who is super optimistic and convincing. Then you have the opposite: The one who makes sure that no huge risks are taken and the execution is properly done. And lastly you have an integrator and mediator in between.”, says Florian. Very rarely do these contradicting personality traits come together as a winning formula in one single person.
Since these important characteristics of a great entrepreneur are distributed among several different individuals, it is really important that those people trust each other completely to ensure that they can work together seamlessly and effectively in a productive relationship.
I would argue that this can also be applied on a company level: An organization should value the optimist, the sceptic and mediator to equal parts. Furthermore, a company should make sure that it is built on people of all three personality types and also ensure that these very different people can interact in a trustful environment and can form productive relationships.
Passion – the Secret Sauce Everybody Knows
The perfect entrepreneur (and company) is also loaded with passion. “Passion is something you need to have if you want to be someone who creates something outstanding. Without passion, it’s very likely that average things will be achieved.”, says Florian. And he goes even further: “If you don’t have it you cannot win.”
Obviously, just being passionate is not everything. It has to come with “smartness, courage, will power to fight, willingness to work on yourself and empowering your team”. Every business is people business. If you are not activating the individual powers of your people, your business will be average. You find more on this in episode #2 of the Sparkr Podcast featuring the culture at Facebook.
The Inner Voice
Probably one of the hardest things above is the willingness to work on yourself. Florian is convinced that “being ruthless with yourself and analyzing in hindsight” is crucial to longtime success.
At his venture capital firm b-to-v they established a system that looks at the mistakes they made and the misses they had. “We have an exercise to understand why we said no to a company at what stage etc.”, says Florian and continues: “Especially interesting are our failures. Failure is the closest to learning and with time you recognize patterns.”
Asking for some examples of such patterns, Florian noted that “when greed comes into play, reality will become distorted.” and that “if you have the feeling that something is wrong better trust that feeling and look for something. If your intuition tells you something, you have to search until you have an answer.” Especially when you are an experienced professional like Florian, your intuition is well trained and gives you signals for a reason. This is in line with what soccer legend Ottmar Hitzfeld revealed in the first episode of the Sparkr Podcast.
A Guide to Presence
Listening to your intuition is easier said than done. It is hard to hear the inner voice when around you everything is busy and noisy. I wanted to know how Florian does it; to be present even when he as an investor is switching between meetings, calls, companies, industries on an hourly basis.
His answer: “On the one hand it is very easy and on the other it’s probably the most difficult thing in the world. First, you have to sleep well – and I don’t always sleep well. I sometimes think too much. Secondly, I think you have to be extremely disciplined so that you don’t do two things in parallel which you cannot do anyways. Don’t have your mobile phone and laptop in a meeting that distracts you from doing something a 100%. And then discipline also plays a role for preparation: If you change between meetings, you leave the previous meeting and topic in the past. You conclude and at least for 10 seconds you prepare for the next thing and you are here and focused. And lastly, you better do a short but 100% meeting instead of two hours and doing distracting things with your laptop and smartphones.”
More Episodes of the Sparkr Podcast
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#12 Künstliche Intelligenz und die Folgen für Mensch, Gesellschaft und Wirtschaft mit Thomas Ramge (text: English, audio: German)
#10 Executive Briefing on 5G (English)
#6 Florian Schweitzer (founder of one of Europe’s largest venture capital firms ‚b-to-v‘) about why every business is people business – the importance of listening, being present, intuition, passion, trust and relationships. (English)
#3 Lukas Peter from Swisscom about what (Swiss) SME can learn from Silicon Valley (text: English, audio: German)
#1 Ottmar Hitzfeld about leadership (German)