That Person Won't Scale

One of the best things to happen to startup land this spring is the arrival of Ben Horowitz as a serious blogger. Like his partner Marc Andreessen, Ben has a ton of great experiences to share and he is doing just that right now.

I particularly like his post on evaluating whether an executive "will scale." Ben writes:

evaluating people against the future needs of the company based on a theoretical view of how they will perform is counter-productive

I see this all the time in VC and startup land. An entrepreneur will come into our office and we will be discussing him or her after they leave. Someone will ask "will they scale into a big company CEO?" The answer as Ben points out so well is "who knows?"

Ben also points out that managing a lot of people well is a learned skill:

Managing at scale is a learned skill rather than a natural ability. Nobody comes out of the womb knowing how to manage a thousand people. Everybody learns at some point.

This is why I am a huge fan of getting mentors on the board and CEO coaches into the picture. Good VCs will try to help an entrepreneur "scale" but there is always going to be a tension between the investor and the entrepreneur and it is a good idea to get some other people involved if the entrepreneur wants to "scale" into a leader of hundreds or thousands.

The next time I hear someone says "that person won't scale" I am going to send them to read Ben's post.

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#VC & Technology

Comments (Archived):

  1. Mordy Kaplinsky

    This is a very interesting point frequently mentioned by “experienced” CEO’s to the founders and the “non professionals”. I always argue that the skill to manage people is earned while the skill to create a product vision is innate.

    1. JLM

      Very interesting and insightful comment!

  2. Elie Seidman

    Ben’s blog posts have been truly fantastic and that one was particularly good. Also, if you decide that someone in an important role can’t scale, the solution might end up being to find someone who has already done that job at scale. In so doing you can run into the problem of a BigCo exec who is organ rejected by the startup because they can’t “scale down” into the weeds the way a startup needs. Ben’s post on that particular problem… is very insightful and something I’ve seen a few times. I’ve personally found that it’s hard to figure out what a person who has proven themselves at scale has really done. Clearly there are talented managers who have operated scale businesses but if you are talking to someone who has been the manager or GM of a major business line that was at scale and successful when they started in the job and at similar scale now, how do you know what hand they really had in things? What would have happened had they not been there? When I was hiring for my previous company, I found that far too many “scale execs” claimed responsibility for things they could not possibly have been responsible for. As they say, success has many fathers. For a company that is still finding its product-market fit, people who are smart, hungry, and willing to learn are typically far more effective than people who have “been there before at scale”. For a company that is still finding its product-market fit, people who are smart, hungry to win, skeptical by nature (they question everything), enthusiastic, and willing to learn are typically far far more effective than people who have “been there before at scale”. You’ve seen many many businesses scale up – how often have you seen these failed implants of scale execs?

    1. Tereza

      One thing I’d like to say about these ‘scale execs’ — which I read in Ben’s post and here to be the person who ran a big P&L at BigCo. BigCo’s have lots of different people in lots of different roles. Some are “establishment” roles like your typical Scale Exec. But some are “anti-establishment” roles.Their reason for being is to cut across business units and silos, getting your ass handed to you on a platter every day because they see you as a threat to the status quo. If you’re lucky you have the protection of a top-level exec. And you may or may not have a budget to work with (frequently, you don’t). And then the inevitable a succession happens. You are toast, becase you were aligned with that person and your whole job was about pissing people off.I’ve done the latter and I’ve done startups and so far they look and feel extremely similar to me. The one difference is that in the startup I have to pay for the lawyer out of my own pocket, rather than a slow-responding (free) OGC. And that hurts.

    2. JLM

      I think the Big Co exec who cannot scale it back down is an interesting phenomenon. They may be talented managers but they are not entrepreneurs.This gets back to my personal theory of professional development — the 360 degree businessman who simply has to become expert at everything. The days of having blind spots are over.This does however imply that it is a long apprenticeship.

      1. Elie Seidman

        Very thoughtful – well said. The two guiding principles of my professional development have evolved to be to 1) never know precisely what things will “look” like in 2 years (if I know, I’m not pushing my comfort zone enough) and 2) at the end of each year have the feeling of “wow, I was clueless a year ago”; If I achieve the latter, then I know I’m learning at a fast clip.I try to encourage all of the people who work for us to look at the world the same way. Namely, there is really nothing you can’t learn if you work hard at it – after all, everything I now know I did not know 5 years ago. My co-founder Ariel is fond of saying “everything we have ever done, we did not know anything about a year before”. Of course, as the business changes, the course has changed and like you said so well the right horse has changed as does the definition of “learning fast”. I made that transition from small to big. I found that I liked managing the large org a lot and because I liked it, I worked hard to be good at it. While 2 years prior I had never managed more than 30 people, I was able to learn how to manage 200+ without driving the car off the side of a cliff. I’m not a rocket scientist and speaking from experience, it’s learnable. Question for people who are being asked to “scale up” is: do you really want to? There is no shame in not doing so.

        1. JLM

          The simple fact that you are even thinking about your own personal development already puts you in a rarefied atmosphere.I believe that nobody has 20 years of relevant experience anymore. We all have 1 year of experience 20 times. The world and our own development is moving that fast.Everybody who has experienced a bit of success finds — hopefully — a comfort zone which is where the demands on their business life and their other interests collide and are at equilibrium. It is difficult to find that spot when just starting out.I think the most successful people in the world are always working and vacationing and always vactioning and working. The current technology makes it possible to be “present” anywhere.The other secret is effective delegation. Hard, fierce, accountable delegation. I always tell my direct reports — your job is to make my job easier.Never run a popularity contest. Demand performance and be professional. Overcompensate the best ones to an absurd level.Create effective systems — planning, reporting, reviews, performance appraisal, etc which take the work load off constantly re-inventing the wheel. And which by their very standardization, buy you time.

          1. Elie Seidman

            Thank you – that’s great advice.

          2. Tereza

            “I always tell my direct reports — your job is to make my job easier.”Funny. Here’s the converse.I always told my bosses: “My job is to make you look good. So your job is to make sure I’m crystal clear in knowing what that means.”

          3. Mark Essel

            “Overcompensate the best ones to an absurd level.”Do you have to “research” what some of your best direct reports want? I only discovered in my thirties that I wanted much, much more than financial wealth (but that would be nice too).Lasting impact doesn’t have a direct dollar value, but I haven’t come across anything that has a better chance at achieving it than a startup powered by a self replicating social pattern.

          4. Aviah Laor

            ” believe that nobody has 20 years of relevant experience anymore. We all have 1 year of experience 20 times. “It can go to tumblr, Fred.

          5. RichardF

            already gone to mine!

          6. fredwilson

            i am late to this thread. i had a crazy day when i posted it. just seeing it now.

        2. ShanaC

          by the sound of it, you have a very philosophical co-founder…he’s on the money about it being a learning process..l.

  3. William Mougayar

    True. As a company scales, the less it looks like a start-up.I think the CEO’s growth has to be always ahead of the company’s growth. Part of the trick is to have some basic management skills & know-how but also knowing how to delegate and letting go of things, and letting others do them and therefore becoming a true manager and leader instead of a doer. Past management experience also helps.

  4. reece

    Well said, Fred. In the early days it doesn’t matter. The question is whether or not they can ‘move the needle.’Chances are, if they can get traction on their own, they can also learn how to be a good manager.

    1. fredwilson

      they have to want to learn how to be a good manager. once they have the desire, most can do it

      1. reece

        ‘where there’s a will, there’s a way.’

  5. Aviah Laor

    Today, one word comes to mind: Diaspora.These kids just got to succeed. They must.

    1. Joe Siewert

      Yes, this is a really interesting project.

    2. Mark Essel

      I’m on the record as being jealous, respectful, and concerned about Diaspora. People have such high hopes for a few developers, fueled by a backlash about Facebook and a loss of personal control over one’s social network connections.Diaspora perfected their Kickstarter and media timing. An important lesson to learn for founders.

      1. Matt A. Myers

        I hope they know what they’re doing.. what the leading metrics to follow, .. how to build up …. etc.. I’d personally love to take a stab at it, though I think Google would have the best opportunity – except they would likely want to make big profits off of a social network and not compete with their own, but they’d be happy to make Facebook not be as powerful.

        1. Aviah Laor

          they probably didn’t have a clue where it’s headed… and that’s a good thing.If it works, profits will probably move to hosting companies that will sell a “node account” that should – as Mark described – connect to a browser client and other nodes.But at least you own the data, the privacy, and hopefully ways to make money from it.

          1. Mark Essel

            That browser client idea is pretty tricky given the limitations. Even if you could spin up a free small personal server on the cloud (imagine dropbox for social servers) it would work pretty well with a federated social network. Google’s Buzz software is headed that way which is cool.

          2. Aviah Laor

            the local node should be allowed in the sandbox

          3. Mark Essel

            If you have any ideas I’d love to hear them, hit me up at messel at victusmedia dot com

          4. ShanaC

            Hosting companies and you could be difficult- there has been trouble with godaddy having hacks of WordPress en mass. No reason that couldn’t happen with Diaspora*

      2. Aviah Laor

        me too. This is why they just have to make it.

      3. HowieG

        Fact is there is going to be many networks that replace Facebook over time. Its just a matter of when. Very few consumer focused Web Only/Digital Only properties of size have staying power. Cost/Barriers of entry is low. Yahoo lost search. Myspace lost Social. Netscape lost Browsing. AOL lost internet connecting. So there will be better networks and services that take over.As for Facebook 2 of 3 US consumers are not using Facebook each day. So there is plenty of room for others in this realm. Diaspora included. I mean Facebook’s interface is horrible. The live feed is clutter. Try going to a fan page on your own. You have to search or drill into your profile page. So much left to be desired.Funny is Facebook charged $3/m and had 200 million subscribers world wide they would be ranked 314 on the Fortune 500. Call it bad business model with investors who helped craft the bad business model IMO.

    3. Mark Essel

      Aviah, wanted to add, one of the possibilities for a distributed soc net could live in each of our browsers. There are many layers to of potential interoperability between centralized, distributed and ubiquitous social networks.

      1. Aviah Laor

        Cool! It’s the holy grail. One client, in the browser, that can work on local and cloud based data, and sync with other nodes.You see, all you had to do was to video it, and maybe play shooting with a hockey stick :).But i think your spec is correct: this Diaspora thing must have a client in the browser.

        1. Mark Essel

          I’m too conservative compared to those guys. I think having a working prototype is proper, before talking to funders. Nowadays it makes more sense to have a prototype and a good number of users before seeking funding.But Kickstarter is very different than traditional funding. There you can raise a good deal of money with no strings attached, dilute none of your ownership, etc. It’s pretty amazing for would be founders and you can still get proper funding later with a more mature package.

          1. Aviah Laor

            they did say that they had something working, but off course their intention was not funding – they probably didn’t accept 2000%. Nevertheless, their timing was perfect, sometimes you have to grab the moment, and it will make their life easier.

    4. ShanaC

      I have at least one friend ready to jump with me on launch day (and she is a cool friend!)I think the early adopter crowd really is that sick. I think the people who coo, it still hasn’t gotten to them yet. They’re still a bit, bland….

  6. kidmercury

    i think the process of managing thousands of people will be drastically different in the new world order, the land where innovation and profits occur at the edge. i think such a world involves small teams, distributed and operating according to pre-determined rules (i.e. laws). as such, scale is obtained by division. i.e. binary fission.but i def agree with the notion that you have to grow into management. entrepreneurs don’t climb the corporate ladder, but they still have to do the work of making it. i’m grateful for the opportunities i’ve had that let me grow into management roles back when i was working for The Man, and i think it worked well for all parties.

  7. Scott Carleton

    The qualities that make a good entrepreneur, the melding between the tenacity and hard work to create a product plus the enthusiasm and evangelism that draws people to work towards an end goal, typically should yield a person who can certainly learn how to manage at any scale. The question is not ‘will this person scale,’ the question is whether they will want to sit back and manage hundreds if not thousands instead of getting their hands dirty at all levels of development. The difference in job function yields very different rewards to an individual which some enjoy and others disdain.

    1. Tereza

      I think what you say is true Scott.My observation in others and in myself over the years is that more often than not we don’t even know if we enjoy managing people under those conditions until we’ve tried it.Very often the ones who like it and the ones who don’t are not the ones I would have predicted in advance. Also there is an X factor of the brew of the situation. Could go in any direction.I’d also add that I’m hard-pressed to recall of a single Sr Mgr in my career who was good at it at his/her core didn’t like it or take pride in it. And the converse doesn’t hold. You can like it but suck at it.But it’s not all “nature”. I’d say at least 60% nurture. Experience and training can make a massive difference.

      1. Scott Carleton

        I certainly agree that the majority is nurture but some of the more introverted types will need to really work at it to gain any ability to manage competently. I currently work at a large company which is made up entirely of engineers (not web or computer engineers but old time mechanical, electrical and nuclear engineers). The problem is that these engineers have been promoted to managing positions over the years and although some have thrived in their new positions, most lack even a basic recognition of how to lead. The problem isn’t their ability to take up the new position but their inherent distaste for abandoning the nuts and bolts analysis that they love. They could scale if they wanted to but its really a case of stubbornly not adapting but being forced to climb a corporate ladder (I’ve seen the smarter ones decline promotion to management again and again, knowing that its not their calling).

        1. Tereza

          I don’t disagree. Also, playing into that is how good they are at engineering (or whatever the function). Often you’ll hear an excellent Sr exec say something like, “I was a good engineer but not brilliant” so they felt they’d topped out inside the function and wanted to stretch their muscles in different ways…management.The tricky thing is the individual’s growth curve and the organization’s needs for growth are frequently not in sync.People can be so darn messy! 🙂

          1. Scott Carleton

            Haha indeed. People always seem to throw a wrench into the plan.I guess our conclusion is that good managers are the one’s who recognize their limitations in previous functions and want to succeed in their new roles. Kind of like hiring people who are better then you. Having that sort of recognition would allow you to manage/delegate to employees who are better at that job.

          2. Tereza

            Life and work is a lot more fun, and productive, when you hire and surround yourself by people who are better than you.

          3. Fernando Gutierrez

            It’s not only engenieers, the same happens with sales people. Sometimes the best sales reps are not the best sales managers if you promote them. But it’s also true that the best sales managers I’ve known were terrific sales reps before.

          4. Scott Carleton

            Hmmm.. I wish it was just engineers :).It’s a matter of human nature then. The modern work force demands more dynamic workers to be able to fill more roles.

          5. ShanaC

            If people weren’t messy they wouldn’tA) be managableB) want to change rolesit is the drive that people have to learn that probably makes them good managers…

    2. Elie Seidman

      Well said. The jobs really are very different. Similarly, individual contributor engineers should not be forced to become dev managers to “move up”.

      1. Scott Carleton

        The way I’m currently witnessing it, it’s employees who have been at a company for 30 odd years and enjoy the job security. To have some sort of progressive change in their life they either become technical gurus or managers. There was a plethora of technical talent in my industry over the past 30 years and a shortage in managing talent.

  8. Andrew Shoaff

    I agree with the irrelevance of the scale question. The better question is probably ‘Is this the right leader for right now?’ It’s rare to find an entrepreneur with the capacity or interest to lead an entity from $0 to $B +. Different growth phases generally demand different kinds of leaders, even for the same company. Transitioning management is simply part of a natural process.

  9. Nick Giglia

    Well said. Running a startup and running a company like Google or Apple are completely different beasts. There’s no guarantee that an entrepreneur who can move the needle with 5 employees can still do it with 50,000.I think the best entrepreneurs are ones who, as the business scales, can pull back from the desire to do everything, but not so far that they end up becoming completely disconnected. Either one is risky, and any advisory board needs to be strong and respected enough to be able to explain this to the entrepreneur.Of course, the other interesting issue for me is that there isn’t a single right way to manage a large company, and bringing in people who succeeded in bigger companies doesn’t guarantee they’d be able to scale in your particular venture.

  10. ErikSchwartz

    I’ve been working with a CEO coach since I’ve been back out in the bay area and it’s been tremendously valuable in helping me scale. Some of this stuff is innate (or not) but much of it, especially the operations stuff people are referring to when they want to know if “you can scale” is learnable.It really helps abstract out the issues that need working on rather than viewing them through the lens of the immediate problem at hand.

    1. Tereza

      One paradox I find interesting in this, is as we’ve learned, VC is not a very effectively scalable business itself.So unless the judging VC entered the industry from having managed at scale himself, he’s particularly ill-equipped to make that judgment himself.(no offense to Fred, and anyway, he’s expressed in the past that he prefers to keep his own business small)Similar to seasoned parents, I find the seasoned execs are less inclined to jump to judgment about someone’s scalability because there’s that massive X factor of unknowns that only real experience can reveal.It’s the less seasoned ones that are making calls on patterns that are possibly non-indicative that concern me.

      1. ErikSchwartz

        One of the reason I sought out CEO coaching was to help me make better decisions in choosing investors. It’s an area where I’ve made some poor choices in the past. In retrospect the poor choices of investors I made were incredibly obvious and totally avoidable with better mentorship.The VC’s who make the most noise in the absence of evidence about “will people scale” are often the VC’s that offer little or no mentorship to their CEOs.

        1. Tereza

          +1 Erik

        2. paramendra

          “…an area where I’ve made some poor choices in the past….”Please elaborate. Because I think you are onto something here. A lot of entrepreneurs desperate for capital keep falling into this trap.

          1. Matt A. Myers

            I’m curious for some elaboration as well.

          2. ErikSchwartz

            It’s not complicated. While raising money for a company that was located in a geographically challenging area (ie not in the valley, NYC or Boston or one of a few other places) we had a choice to take local money from regional sources or move the company and work with more sophisticated investors. We chose the local money even though the lead investor had no relevant domain expertise, little operational experience, a reputation of being “difficult”, a small fund without adequate powder to take us to the next level, and very poor contacts to the broader investment community to bring in new money.We took his money because he was local and did not want to relocate us. This was a mistake. It was my hubris that thought I could make it work in spite of these challenges. I won’t make the mistake again.Money is fungible, board members are not. If you’re going to take dumb money do not let them on the board.

          3. Matt A. Myers

            Thank you very much. I’ve been contemplating this very thing for a few months now. There’s local money available, but the understanding won’t be there nor the related resources and contacts. Not to say I’d need or want to move, but the speed at which resources and people are accessible is important.P.S. I’ve been told if I visit San Fran I won’t want to leave… but I live pretty close to NYC and am used to the weather, though recently have been contemplating becoming a snow bird but I might get enough winter vacation with conferences.

          4. ErikSchwartz

            Don’t get me wrong, there are plenty of good local VCs. But the lack of competition means they will likely not be directly useful beyond their cash and they’ll be able to bully you on terms. You end up with a less useful investor on worse terms.But depending on the specifics of the situation you may have a great fit.

        3. Elie Seidman

          I would go further and say that choosing bad investors is probably one of the worst things you can do. Good investors add value, and some investors are neutral. But there is a third category that is absolutely toxic to the environment that needs to be created for entrepreneurial success to grow.

          1. JLM

            At the end of the day, the most important ingredient is always the people.Money is an inert commodity.The folks who inventory the money and bring it to you can either be a vitamin or a toxin. Sometimes a bit of both.People, in general, either bring an energetic aligning force to the enterprise or they are an energy consumer and are constantly off target.The greatest criticism I could ever level at myself is the tendency to do “missionary work” and invest too much time in working with the problem people. Sometimes the problem is a very small problem but they all consume time and energy.

          2. Mark Essel

            This comment thread (Erik’s) is a good reason to be at least a little picky about investors. And more importantly put your business in a desirable position, so that great investors want to be part of it’s growth.

          3. RichardF

            You are so right about that Mark

          4. ShanaC

            100%- and if you get eaten up by the wrong people you can have your life eaten away too…

      2. paramendra

        “(no offense to Fred, and anyway, he’s expressed in the past that he prefers to keep his own business small)”I am on record at this blog saying USV could scale. It has a great portfolio, and after a Twitter IPO, it is going to attract a lot of mainstream buzz. The story of how Fred invested in Twitter is going to be a stuff of legend. It is already, but only among the tech elite so far. That story is going mainstream. At that point why would you not want to shoot to manage a billion instead of the current 300 million? Create three teams of three under the three dons, and go shoot for the stars. Especially when the 10s will be like the 90s, only much more real. And that would also involve expanding the domain expertise of the firm. Can’t do web services alone. Khosla might have a lesson or two there. The guy has been strong on green tech. I personally would like to see wireless broadband get some attention.

        1. Tereza

          Why should he, if he doesn’t want to? That’s his desire and I respect that.Sometimes a no just means no.I don’t really have time out of my day to repeatedly read the tea leaves on USV or anyone else, except insofar as there exist near- to medium-term opportunities for funding for my own company. It’s not an exercise that brings me value.

          1. paramendra

            “….except insofar as there exist near- to medium-term opportunities for funding for my own company….”LOL

          2. Tereza

            that’s funny?

          3. paramendra

            Sorry. No offense intended.

        2. Matt A. Myers

          Why can’t you do web services alone? Specialization seems smart to me, and web services encompasses a lot.And when investing in something you know really well, as in, know how to make it work, then the risk will be pretty minimal IMHO.. and with investing in less than more you can focus on the less and decrease risk even more by guiding their success properly and efficiently.

          1. paramendra

            You have a point.

        3. ShanaC

          With what people- they would have to train can’t scale your time- it doesn’t come from nowhere…And it won’t be precisely like the 90s- remember that Millenials are an echo boom of the Boomers- in no way are we the same. Certain lessons have been learned- it just remains to be seen which ones (like how much yield will people chase, and will people chase paper companies- I say yes to yield, no to paper companies- I think solid footing the market will want)

        4. fredwilson

          not gonna happen paramendra. i don’t want to do that. too much money scares me

          1. paramendra

            Hey, you are the master at the game, not me. And you are about to have a few IPOs. You know what you are doing. I am just shooting in the sky.

      3. ShanaC

        The large question I have- scalability seems to be related to experience- how to get large amounts of experience…

      4. fredwilson

        i believe one of my strengths is i have never managed at scale so i don’t think i can do it better than the entrepreneurs we back

        1. Tereza

          Interesting spin and yes I do think that is a strength.

    2. fredwilson

      you know i am huge fan of CEO coaches Erik. i am very happy to see you working with one

  11. RichardF

    It fits nicely with Ben’s other post on why they prefer founding CEOs…”That Person Won’t Scale” – how relevant is that observation at early stage VC in reality anyway?

  12. Mark Essel

    Absolutely loved Ben’s post, thanks for bringing his blog up. I’ve visited before but haven’t been back in a while. My favorite quote of Ben’s:”Deciding (with woefully incomplete data) that someone who works their butt off, does a terrific job, and loyally contributes to your mission won’t be with you three years from now takes you to a dark place.”

    1. fredwilson

      i liked that one too Mark

  13. David Binetti

    The very word ‘scale’ implies taking an existing, proved business model and expanding it. But startups don’t have existing models by definition. They search for business models (or die trying) and then *transition* into companies that execute those models at scale. The former and the latter companies almost never look like one another; neither will the CEO — even if they are the same person. The better question is, “Does the CEO *want* to execute a known model, or is he/she only going to be happy searching?” It’s less about capabilities (which can be taught/learned) and more about a value system (which really doesn’t shift much.)Oh, and this is not my original thinking — it’s all Steve Blank.

  14. paramendra

    True. Learning is involved, but there is an innate quality that is needed. (Re: The nature versus nurture debate you got into with some Wharton professor a few months back….. I was on your side.) At the end of the day, noone knows. This time last year Dennis and Naveen were not on the map in town, today Dennis is the biggest dog in town. Next year he might not have the buzz, although I think FourSquare has crossed that “chasm” to being a serious company.Steep learning is involved, but that does not necessarily involve a MBA. (By the way, is not today Monday?)I remember Ben from the “spat” you two got into not long back. He is a good blogger, but he does not blog often enough.On that note, find me a hard core entrepreneur who might or might not be big, but who promises to be big, who blogs daily, who “gets” blogging, as in it is an intimate experience, it is not an exercise in push button press releases. I am on a lookout for an entrepreneur version of AVC. Rather, find a few.Another way to scale is for the founder to not end up CEO, the prime example being Google. Eric Schmidt was skeptical of the Google ads thing. Ends up Google makes almost all its money through that. Brave of him to readily admit that.

    1. Guest

      I respectively disagree with your assertion that Dennis was “not on the map in town” at this time last year. I’ve never lived in NYC, and don’t know Dennis personally, but he’s been on my NYC map since at least the middle of the decade when he launched Dodgeball, the proto-Twitter, proto-Foursquare service. But I guess his case just proves your point: both learning and innate qualities are involved in these things.

      1. paramendra

        In Spring 2009 he was struggling to raise money for FourSquare.

        1. Guest

          I’ll take your word for it, but he was still on the map. He sold Dodgeball to Google in ’05. The New York Times profiled Dodgeball and Dennis as early as May ’04. If you’re selling companies to Google and appearing in the New York Times the cat’s pretty much out of the bag — you’re on the map. People may struggle to raise money for a multitude of reasons; it’s not dispositive of the issue of being on the map.

        2. fredwilson

          he wasn’t really struggling. a ton of investors were interested. they just wanted to see the service build a real user base. once that happened it was mad rush to get in.

          1. paramendra

            I just parroted what I think (if I remember it right) @ceonyc said somewhere at his blog in an offhand way. But you must have much more information than I on this.

  15. JLM

    If you follow the horses a bit, you know that the Irish punters are fond of saying: “Horses for courses.”If you are not familiar w/ the term “Irish punters” then you have a modest deficiency in vice which you should move immediately to correct.Meaning that the horseflesh coming up that last hill at Cheltenham — a steeplechase type of course and one of my favorites — having run the better part of 2 miles is a bit different than that wearing the roses at the Kentucky Derby. Both elegant and impressive tests of man (well, short little men, mind you) and beast.The balancing act is probably as much about leadership v management. The startup CEO is a bit more of an evangelistic type leader while the scale up CEO is more of a calm management type.This is also about preferences because most “good” people are good at everything they do but prefer doing what they prefer doing. Fire starters, fire tenders, fire extinguishers.It is literally impossible to identify who has what until pressed to stand and deliver. We are all ordinary people who rise to the ocassion under the pressure of extraordinary circumsances.Having said that, I would caution you to know that these type of judgments are made all the time by folks who are marginally qualified to make such decisions. That’s life.

    1. Elie Seidman

      Beautifully said – in every dimension.

    2. RichardF

      Now you are talking JLM – The Gold Cup at Cheltenham is my favourite race of the year. Living 6 miles from Ascot also gives me access to some pretty good horseflesh too.The UK has the biggest betting exchange in the world and I’ve heard it’s coming to the US. It is an awesome site, Betfair have completely disrupted the traditional bookmaking market in the UK

      1. JLM

        Ahhh, Cheltenham, those thundering horses running up that last hill, jumping the hedge, landing in the water and hopefully vindicating my wisdom. Though not always.The Lower Slaughter Manor with rooms named after the proprietor’s many mistresses and the fire @ the pub in Ford which supposedly has not been extinquished since the 1500s?Never heard of the joint!

    3. Aviah Laor

      than it’s the horse, not the manager, is it?

    4. Carl Rahn Griffith

      As per your last sentence, JLM – it’s (sadly) amazing how many well-placed and somewhat fortunate ‘donkeys’ are out there, but thinking they are thoroughbreds, though! 😉

  16. pfkrieg

    In early stage, 18 months is a reasonable window (IMO). If you can see the person handling 18 months (or have a plan for changing horses), you are good. Beyond the 18 month window, it’s a high class problem to have and one that can be solved.Two examples of why it’s absurd to worry about it. Larry Ellison and Steve Jobs. Look back at the contemporaneous discussions of both of their management failures. And look at the shareholder value created since those points. Both are polarizing, and both are controversial. But both entrepreneurs figured out how to scale despite times it was not at all possible for them to do so.

    1. ShanaC

      Good art is always always polarizing. Look at Du Champ! It is also the kind of art that people tend to learn the most from, and try to build off the most, because it strikes such a powerful emotional chord.Same with business. if you don’t get at the root of people’s hears, why are you doing it? Get at emotional content!

  17. Richard Rodgers

    Yes! Great post…this is misused all the time, often by people who have never “scaled” themselves.

  18. timramsdale

    Why would an entrepreneur want to “scale”? That’s not why we do it. We build as quickly and as best we can, and then hand over, exit and move on to the next project.A good entrepreneur knows when to hand over. A bad VC wants to hang onto an entrepreneur regardless of scale.You do say “if an entrepreneur wants to scale”. Do they ever? I don’t – sounds too dull!

    1. fredwilson

      i totally respect entrepreneurs who want to hand the company over and start anotherbut not every entrepreneur wants to do that

  19. ShanaC

    The one thing I know is true:If you don’t like learning- you are not cut out for this- life is hugely about wanting to learn.If you find yourself bored, find something that makes yourself passionate. If you conquer a hill, find a new one to climb so you can feel a new wind.*And a tip a friend gave me: If you find after a 100-200 pages of a good book that it is boring you to tears- move on. There is too much to learn to waste your time on books you dislike.*It doesn’t actually have to be a real hill- ask if the person is challenging themselves in something different. What they learned recently. it could be a complicated recipe, learning to code for fun, anything! people like that tend to scale because they want to scale into new areas of life in general…

  20. Chris Arnoldi

    Mentors and CEO coaches are ESSENTIAL.

  21. Jose Paul Martin

    Great post! Part of the growing pains of entrepreneurship – I guess people lose sight of reality. And thanks for pointing out Ben’s blog… and post… he’s also got some great topics discussed there.

  22. Mark Goines

    Great point Ben. The question the vc should ask is :”how can we help CEO X scale this thing!?”

  23. SharelOmer

    Could not agree more, Ben blog is amazing and I already learned a lot from it.Thank you for mentioning him for others to view and learn, that is so nice to see.I especially loved his post “…”My best quote:“Every start-up is in a furious race against time. The start-up must find the product-market fit that leads to a great business and substantially take the market before running out of cash. As a result, the top two priorities are always to:1. Find the product that 1,000 enterprise or 50 million consumers want to buy and grab those customers before your competitors do.2. Raise enough cash and spend it intelligently so that you don’t go broke along the way.“

  24. Timo Ahopelto

    Maybe there is one even more relevant question on entrepreneur’s scaling – “Is it needed?”Typically good entrepreneurs are not good big company CEOs and happily so – building wings is a different skill to flying. I saw research some time ago on companies having 3 CEOs: one to found, one to scale and one to IPO. The first one is the entrepreneur, and at best has both skill and will stretch to the second step.

    1. fredwilson

      it is important to keep the founder engaged. i am not a fan of the three CEO model unless it is absolutely required

  25. vruz

    I can attest from personal experience that this is a great idea.I had the privilege of having my friend Alberto help me for two and a half years, and whilst we sometimes disagreed, it was clearly a different form of disagreement.No envy, no bad vibes, no pettiness, only thinking big and creating awesome stuff.In his 50+ years of experience he commanded operations in several countries and continents, managing a company during the installation of a big oil pipe between Italy and Russia (then USSR), then as CFO for the same company when they launched their south american branch. Years after he started his own company from scratch and managed it successfully with 2000 employees until his retirement.During his time as my mentor, we ran a little online business, he had already retired but he loved to be still active, creating things.I learnt more from him than from anybody else in my entire life, there’s many things you just don’t find in books.Having someone who can talk to you without fear of being sacked, without fear of ‘losing’ you, without fear of losing anything in their careers is very important.When we disagreed and I screwed up, there was no ‘told you sos’, but working harder to do better, when I was on the right, he was supportive and still opening my eyes to other potential ramifications I wasn’t aware of.Hiring a mentor as an integral part of the business plan is definitely recommended, if you can find the right person you can trust and with the right experience.

  26. Dave Kellogg

    Having scaled with Business Objects heading marketing from 250 to over 4500 people and now CEO of a venture-backed startup, I agree that that VCs, boards, and senior executives tend to obsess over this “can he scale” issue. My personal philosophy is to presume yes (many others seem to presume no) unless proven otherwise. My other belief is to watch behavior more than words. Most people feel that they have to / should say “yes” to the question — “do you want to manage a big organization.” But when you watch how they spend their time, their acts often betray their words.The other important thing to factor into the scaling debate is that it’s about the TEAM, not just any single person. That is, on the team you want a mix of veterans and up-and-comers. I did a post on that subject here, if you’re interested in more:

  27. Tereza

    My sense Charlie is that your latter statement is accurate, but that’s based on my also limited view. But I love making sweeping generalizations!I’m with you on the generalist/specialist struggle. That’s coming from a lifelong generalist. I get bored way too easily for my own good.Also in our big, bad world it can be hard for the generalist to articulate their value and get paid for it. People pay coin for specialists who solve very specific problems. (until they don’t need the specialty anymore, then they fire them). Which is I guess why generalists should start things…and do the hiring.

  28. Matt A. Myers

    “For the founder that gets bored and can’t scale her/his team well, it can make sense to have them do a startup within the startup, so you keep innovating while expanding a working model.”I like that idea a lot and I can see that fitting for a lot of startup founders.

  29. ShanaC

    You make me feel so much better Charlie about hiring processes…

  30. Matt A. Myers

    I think the later will depend on the investor’s understanding of how and why the plans will work, and if the further innovations fit with the same model in aiding revenues to come faster or be more secured for the future then I’d not personally see issues, other than you’re right that need to take into account cash and burn rate. But luckily I’ve modified a tree’s DNA to grow money – so I’m set!