The answers to those questions have more to do with mental flexibility, curiosity, humility, coachability and problem solving than about being business savvy. These are attributes that are notoriously difficult to measure. Just identifying the specific personal characteristics that measurably impact a founder’s success, has proven to be very difficult. So investors and lenders tend to resort to heuristics and gut feelings—exactly the kinds of squishy criteria you would not dream of using to evaluate a business plan.
The Innovator Mindset® instrument (IMi) is the first instrument that makes it possible to measure the personal attributes that impact entrepreneurial value creation—attributes that have been statistically linked to tangible business outcomes. Research done in cooperation with the Ewing Marion Kauffman Foundation studied hundreds of entrepreneurs, comparing how they scored on IM with their business results. The findings were dramatic. When those with the highest Innovativeness Index were compared to those who scored lowest, the high scorers had 34 times as much profits, 70 times as much revenue and employed 10 times as many people. They were less likely to fail and much more likely to be exceptionally successful.
In other words, Innovator Mindset® is moneyball for early stage investors—and anyone else who needs to gauge a venture’s likelihood of success. More than any other available metric, it has the ability to identify founders with a much higher likelihood of hitting a home run. Whereas, a typical early stage investment has about a 1 in 10 homerun hit rate. IM is able to identify founders with a home run probability of as high as 30% (3 in 10) or even 60% (3 in 5)! Imagine what that kind of hit rate will do to your portfolio rate of return.
Get the Innovator Insights for Entrepreneurs report.
This is a separate report and dashboard. In addition to the founder’s IM scores and projected value creation, it provides specific estimates of the:
- Probability of the founder being an elite innovator, with a venture that is a highly successful “home run.”
- Probability of the venture failing.
- Founder’s commitment level, a critical factor for venture success.
These projections are not a substitute for due diligence. Other personal factors such as industry expertise and business experience are still important to consider. What IM provides is an additional metric that should be weighed in combination with those other considerations.