Circle of Competence

Circle of competence is the area in which one has a skill or expertise.

Tom Watson the founder of IBM once said, “I’m no genius.  I’m smart in spots and I stay around those spots.”

You don’t have to be an expert in everything to be successful.

You do need to know a specific area and where the limits are.

The founder needs to know their circle of competence and operate within it.

Those who move to a new industry may find it challenging as their expertise no longer matches the domain.

The more narrow the circle of competence, the deeper one can go into it.

Founders and investors should assess their skills, experience, and what gives them an edge.

Is the founder moving outside that area?  Will they have the same edge in the new domain?

Some of the best deals to fund are those where the team’s circle of competence covers the startup’s domain completely.

Investors reviewing a startup for investment should estimate the circle of competence of the founder. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.