Missionary or mercenary: the founder test
In a Family Office Club video series on due diligence, Richard ended one episode with a screen he credits to Jeff Bezos. When Amazon invests in a company, Bezos looks first at the founder's motive.
The question
As Richard tells it, Bezos said the number one thing he looks for is whether the founder is a mercenary or a missionary. Is the person just trying to grow something and flip it? Or are they trying to make things better for the customer?
Customer obsession
Richard adds that Bezos asks whether the founder is as customer-oriented and obsessed as Bezos famously is himself.
Why it fits due diligence
Richard placed it in the personal side of due diligence. The numbers matter, but so does who you are backing. More screens on the person save time later.
In Richard's words
"but the number one thing he looks for is whether the founder is a mercenary or a missionary." (Richard C. Wilson, Family Office Club due diligence video)
"Are they as customer -oriented and obsessed as he famously is?" (Family Office Club due diligence video)
How to use this
- Ask founders why they started and what they would do if they could not sell.
- Look for proof of customer focus, like retention and reviews.
- Add a motive screen to your due diligence checklist.
- Be wary of plans built mainly around a quick exit.
Questions and answers
What is the missionary or mercenary test?
A screen Richard credits to Jeff Bezos: is the founder building for customers, or just trying to grow and flip?
What does Bezos look for first?
Per Richard, whether the founder is a missionary or a mercenary.
How does this relate to due diligence?
Richard calls it part of the personal side of due diligence, alongside the numbers.
What is customer obsession?
Richard says Bezos asks whether founders are as customer-focused as he is known to be.