The trait most leaders lack
After almost 10 years working inside the VC industry, and seeing hundreds of teams operate I can testify that, after market conditions, the second point of failure is leadership teams.
I've come up with my own framework to asses if companies will succeed or fail at Expression Capitale, and so far this is probably my biggest advisory moat. I want to share with you a few learnings I've got over the years.
Founders and leaders must demonstrate active and systematic self-development through established channels - whether formal education, coaching, professional networks, or consuming a lot of content. This is true for anyone, really but at the top if founders lack structured growth mechanisms, they will invariably deteriorate over time (it is a muscle, after all) and often taking the company in their downfall.
The first trap: status quo
Founding a company demands constant adaptability. Market conditions shift, customer needs mutate, Google might kill your startup overnight, and so internal capabilities must expand accordingly almost in real time. While they need to pretend there is one cap because people, markets and tasks love certainty - what was true two weeks ago might not be valid by the next Tuesday. It's the leaders' job to spot these and quickly adapt the company (often, without people noticing).
As such, leaders who lacks agency, or lacks deliberate development infrastructure, become a progressively larger liability as the company scales because the problems only get bigger.
Companies very often hit capability ceilings precisely when the business requires breakthrough thinking and that's why it is really hard to stay at the top.
The absence of growth systems typically manifests as:
- Repeated strategic errors stemming from unchanged mental models
- Inability to delegate because their skillset hasn't evolved beyond operational tasks
- Resistance to feedback since they lack frameworks for processing critique constructively
- Decision-making stagnation as they recycle the same limited playbook
Let me pause on the why. Very often leaders have risen up doing the exact inverse of what is expected of them in a leadership role - and in 99% of cases, they've succeeded being an incredibly hardworking individual contributor, expert in one domain and to some extent what I call a momentum-perfectionist. They got promoted this way, seduced investors and talents with their hard-working ethic and they don't see why they should change now.
But in reality, what is expected of them is a constant transformation of the company and themselves because now they need to go much further than project managers (the number one job leaders have is to hire amazing project managers). Because they can't change their OS, these leaders don't just plateau - they effectively regress as the business complexity outpaces their own capabilities.
Identifying systematic learners
I'll put this bluntly but someone who "reads business books" but never alters their approach isn't actually learning. Actually, most people do not read and they fake it. As a reader, I can spot it - the frustration I get whenever I go deep into a topic and realise how much I don't know, and how much reading opens my world of possibilities, is not the obvious "I've read X and it changed my life".
Authentic growth-oriented people are constantly showing very specific signs. And no it's not reading!
- Demonstrable behaviour change: they reference specific insights from recent learning experiences and show how these shaped decisions. "After working with our advisor on strategic pricing, I completely restructured how we think about value capture" signals genuine integration.
- Multiple input channels: they don't rely solely on one development mechanism. They combine industry podcasts during commutes, quarterly sessions with a domain expert, they spend serious money on coaching, participate in founder circles, and read both a lot of news to stay on the pulse and long form content. Redundancy matters.
- Teaching as learning: growth-minded individuals naturally share knowledge. I know it sounds super counter intuitive but honestly teaching is the best way to learn in a sticky way - you're really forced to think through it all! These leaders propose team learning sessions, or explain frameworks they're exploring. "AI will change how we operate this company. I've built this OS with X and we'll been showcasing our use cases in a team-wide webinar" reinforces their own understanding whilst elevating the entire organisation.
- Intellectual humility: they acknowledge knowledge gaps and articulate plans to address them. Yet, humans don't reward vulnerability enough and that's one of the red flags for me... over confident leaders hide something. "I don't understand unit economics of this market we're opening and as such don't believe in our strategy. I've scheduled three conversations with CFOs next month to build that muscle" demonstrates both self-awareness and initiative. They cultivate collective learning infrastructure for the organisation. A growth-oriented leader who doesn't institutionalise development creates a capability bottleneck.
- Lastly, they ALWAYS hire people smarter than themselves in specific domains. They are utterly aware of their own gaps and will very often focus on making these specific people highly successful and trusted in the organisation. Often they will become their de facto coach.
Some might argue that deep domain experience matters more than active learning, especially when operating in a market with abundant capital (meaning VC-backed startups can afford hiring "the best"). But whilst experience provides valuable context, it becomes decreasingly relevant in fast-moving markets. The executive with 20 years in traditional retail but no learning mechanisms is less valuable than the adaptive founder with 3 years who voraciously studies emerging commerce models in the same industry. The latter is also a better investment...
The most effective leaders alternate between learning and execution, using each to inform the other. They're not contemplative operators (or investors, a totally different job - which is also why I don't believe most entrepreneurs would be good VCs and vice versa) but best leaders are experimental practitioners who update their mental models and priorities based on evidence.
Companies led by systematic learners don't just perform better, they compound their advantages over time. The question isn't whether leaders are brilliant today. It's whether they'll be brilliant enough tomorrow.
We should not be betting on current capabilities, but on the rate of capability expansion.