The obvious lesson from Simon Sinek’s best-selling book “Start With Why” is the need for “why-type” leaders who drive projects with bold visions. Sinek explores the thinking, acting, and communicating that enables certain leaders to inspire the people around them — not with tangible incentives, but with purpose and belonging.

“I agree with that philosophy wholeheartedly,” says Jay Jung, CEO of Embarc Advisors. “It’s been a big inspiration for us as we grow and disrupt the corporate finance advisory industry. But, there is a hidden pro-tip to building and scaling your enterprise: You also need a ‘how-type’ to support you.”

Identifying the “how” people

Everyone can name a leader who Senik would say inspired the masses with a clear “why.” Bill Gates, Steve Jobs, and Walt Disney are several visionaries that likely ring a bell. 

However, behind each of these successful leaders articulating the “why” was another person communicating the “how.” Would Bill Gates have gotten Microsoft off the ground without his co-founder, Paul Allen? Where would Apple and Steve Jobs be without Steve Wozniak? Of course, Walt Disney comes to mind first, but would there be a Disney World without a Roy Disney to help Walt’s vision come to life?

The thing is, most people have never heard of Roy Disney. He generally stayed in the shadows, and his work wasn’t flashy or exciting. Instead of making movies and theme parks, he worked at a bank focused on business affairs. He was the brilliant financier who founded the Buena Vista Distribution Company and created the merchandising business that made Disney profitable. Instead of pushing forward to be the front man, Roy concentrated on building Walt’s vision. The people who focus on “how” may be less well known, but they are every bit as essential to a project’s success as the leaders who focus on “why.”

Focus on the finish line, but don’t forget to build 

According to Sinek, “Most why-types end up as starving visionaries.” Often, these leaders have all the answers, but accomplish very little. Unfortunately, many brilliant visionary entrepreneurs stumble along the way because they never find their “how-type” counterparts.

The world’s most successful entrepreneurs actually come from the people who focus on “how.” These people are the builders. They know what it takes to organize a project and get the job done.

“The world needs more ‘how-types’,” says Jung. “Embarc Advisors aspires to be the partner who focuses on ‘how’ for entrepreneurs with big visions.”

Combining the how and the why creates success

Capital is the lifeblood of a company, and “how-type” people know how to build it. As in the case of Roy Disney, he was a CFO who enabled his brother’s company to grow sustainably. People like Roy crunch the numbers to identify new growth and profit opportunities. They translate a visionary’s purpose into measurable metrics, create a dashboard, and track those metrics meticulously on a monthly, quarterly, and annual basis. 

“When capital was free-flowing, the ‘how-type’ may have been undervalued because visionary founders could go out and easily raise more money,” observes Jung. “However, with giants like Tiger and Softbank Vision Fund taking large losses, we think ‘Winter is coming’.” 

Many of the problems Tiger Global and Softbank Vision Funds (SVF) are experiencing can be chalked up to poor decision-making, but it’s clear a more cautious mindset is becoming prevalent among venture capitalists (VC). In response to falling valuations and businesses tightening their belts, the VC community is experiencing a massive reset.

Needless to say, both Tiger and Softbank will be more conservative when approaching new investments. They are going into what some call “defense mode,” meaning they will likely cut startup investments by over half during the upcoming fiscal year. They are also predicted to be more selective about their investments. 

“As Tiger and SVF retrench and stock market valuations fall, VCs will temper their exit valuation expectation,” explains Jung. “Before, we were in a FOMO market where investors deployed cash with limited due diligence to make sure they got into deals that were moving quickly. The pace of deal-making has slowed, and valuation expectations have been tempered. We believe there will be a greater focus on quality, with investors conducting more due diligence and showing more prudence in deploying capital.”

This change in posture from two giants of the tech boom marks the end of an era. An entrepreneurial culture that thrived so long on hubris and bluster is backing down. Many VC investors who made similar bets will be feeling similar pain, but these lessons have perhaps come too late for Tiger and Softbank. Diversification may be a slower and less flashy path, but it is the proven route to success.  

The VC world has enjoyed a charmed existence during the last years, with VC-backed companies in the United States taking in a whopping total of over $330 billion in 2021 alone. That amount was double the previous record of $167 billion set in 2020. Nevertheless, this seemingly endless stream of investment capital has proved unsustainable. 

The industry is realizing that visionary bravado must be accompanied by inciteful building. New startups will be born, and new deals will be made, but the free-for-all is over. 

“The ‘how-type’ partners will become increasingly important to the ‘why-type’ visionaries,” Jung predicts. “They are the ones who can discover the metrics that gain traction and the path that leads to profitability.”