Starting and Finishing
AVC regular Donna White posted this to her Tumblr yesterday:
I'm a crotchety old guy. I worry about all these new companies. I’m glad that they’re easier to start, but the problem is, they’re just as hard to finish as they have always been.
The quote is from Mike Olson in this post.
The thing in Mike's quote that really speaks to me is the difference between starting and finishing. Starting requires an idea/inspiration, a team, some technical skills, the ability to iterate on the MVP and find product market fit. That's hard for sure, but what happens after you find product market fit is even harder. That's called building the company and building the business. And that is where I have seen all founders struggle. The ones that have done it before a few times seem to manage through this struggle better. The ones who are doing it for the first time really need a lot of help from mentors, coaches, and their team to get to the finish line. And many don't. Mike handed his company over to more seasoned managers and many other founders end up doing that too. Sometimes the VCs/investors have a role in making that happen. Sometimes the founder makes that call on their own.
The skills that get you from idea, through initial product, past product market fit, and into a market leading company are very different from what it takes to manage a 200-500-1000 person global business that needs to exectute well across a range of dimensions and keep everyone aligned, motivated, and working well together.
The quick pivots, the exhausting product/engineering sprints, the rapid fire innovation, the missionary zeal, etc work so well in the early days but they get old quickly and they don't scale. At some point calm, rational, supportive, and highly communicative management skills are required. And learning those on the job is hard. As Mike points out in his post, it is a bit easier to learn those skills from watching someone else who is really good at doing that. And that is why Mike argues that founders should pay their dues working in someone else's company before starting their own.
I agree with Mike that learning from someone else is a better model for becoming a great CEO. But often a first time founder has the right idea at the right time and assembles the right team and ships the right product. And getting behind that kind of founder has produced the best returns over time for USV and for many VC firms. So the art is helping the first time founder learn how to turn themselves into a great leader manager or helping them decide that they should step aside and let someone else take over.
I have seen both done both many times. There isn't a right way or a wrong way. But there is a right way or a wrong way in a specific situation with a specific founder and company. It all depends on whether the founder wants to make that shift, is making that shift over a reasonable period of time, and that the company is making that shift with them.
It's postseason baseball time. So I will use a baseball analogy here. The starter rarely pitches a complete game. Most times the winning team will leverage both a great start and a great close from two different pitchers. And there are plenty of both in the hall of fame.
Update: As my friend John points out, there are only 5 closers in the hall of fame. Not sure what that means for this post, other than my analogy was a bad one and I should have done some homework before using it.
“missionary zeal” – yes!
that is absolutely required in the early daysbut i can be tiring over time
Someone who starts out in their early 20’s and gets tired by the time they are almost 30 isn’t cut out for “the life”.If it’s not reinforcing to the level of addiction (like musicians, sports guys, actors) you might as well take a job and enjoy your free nights and weekends and 3 weeks vacation per year.That’s part of the problem with the whole entrepreneurship bubble. You drag in people who never ever thought about business until it became mainstream on the radar and popular. And there is no basis for their desire to start a business other than they see others doing it and it’s the thing to do. (Once again, in general.)When I graduated Wharton I remember the look on my girlfriend’s mother’s face when I told her I was going to start a business. It was a look of almost disqust mixed with disappointment (her husband, my gf’s father, was a surgeon).
Bingo. Great post. Especially true if the first time founder hasn’t worked for another larger company where they have seen how management and structure mesh together.I also liked this quote from Mike’s post: “Management is a tremendously undervalued skill on the tech startup scene, and that single fact contributes, I believe, to the failure of more companies than any other factor.”There’s another dilemma the founder faces, which I wrote about yesterday. Sometimes, to monetize, they need to create a new product that is different from the free one (for consumer plays). Their dilemma emerges when that doesn’t get the founder as excited or involved as they were with the original consumer product, because the monetizable product isn’t always as sexy, nor is it in within their range of expertise.http://startupmanagement.or…
Would you recommend some entrepreneur who’s done all the “early” stage to accept an aquisition offer earlier if that means that entrepreneur will get to observe the CEO of the aquiring startup?
not for that reason alone
I am bound and determined to finish and pitch a complete game. I don’t know if I’ll get the chance, but that is my goal.I’ve worked in larger organizations, but for the most part, that taught me how NOT to do it. That’s one of the reasons I retained and use JLM as my coach on a regular basis! Yet another thing AVC has given me. 🙂
Starting pitchers never know for sure when they’re being taken out of the game. Can’t plan it. Should keep pitching as if you’ll do so for the whole game.
Great point Jim
I retained and use JLM as my coachOn the one hand you are lucky to be able to do that.But on the other hand I can definitely tell you that there is much to having to figure it out on your own without anyone to ask questions or get suggestions or tips. You learn the lessons well as long as you stay alive.My point is that you have to avoid getting a lazy brain by using the coach as a crutch.  Similar to a child in school that asks parents for homework help instead of spending the extra hour to figure it out themselves.One of the great advantages I had I believe was that I had practically nobody at all to run anything by essentially. It’s a bit like being on a desert island and having to figure out how to make fire yourself. Comes in very handy in life as your brain just ends up working much differently. (I might have done better if I did though, so I am just pointing out the upside brainwise to not having anyone to answer any questions or to tell you what you should do).  I’m not writing this to you but merely to others since I don’t at all what types of things you discuss with JLM. Early on the guy who owns the company that bought out cd baby wanted to partner with me and “show me the ropes”. I passed on the chance because I thought he was a bit sleezy and he had filed for bankruptcy. Just didn’t feel right.
Coaching, at it’s best, fills in the last 5%. It’s more of a sounding board, to see if you’re missing a magic weapon or framework that experience has taught someone else.If you aren’t actively learning by reading and doing, coaching will not get you far.
“You learn the lessons well as long as you stay alive.”Ha. So, basically, since almost everyone fails to stay alive, almost no one ever learns the lessons.
.Learning requires the payment of a bit of tuition. You can pay full tuition — do it yourself — or you can get a scholarship. Getting a scholarship means learning from someone else.It was beat into my brain as a 2nd Lt not to “touch fire” — do stupid stuff that others had already done and learned from. I remember huge assignments made easier because I sought out others who had done it before.I once spent the night in the company of a bunch of sergeants, having successfully bridged the Rhine River on my first try. Getting deliriously drunk.They would take turns saying — “Damn, Lieutenant, we never thought you were that smart.” And then they and me would laugh, laugh, laugh. “Hell, Lt, you’re not stupid.” More laughter.I had only had the wisdom to ask guys who had bridged the Rhine literally hundreds of times — WTF before I had screwed it up. Lots of Lieutenants had tried to bluff their way through it and their bridges went floating down the Rhine.Great lesson.In 33+ years of CEOing, I learned to learn from others more and more as I progressed. I got a damn good scholarship and thereby cut rate tuition. I was also a faster learner than a self-learner.A few times in my life, I ran enterprises in which the team was so well aligned that I literally did nothing except to ensure that the money hit the bank.A bit boring when you have been a deal junkie but very relaxing otherwise.I support the full tuition scholarship approach.If I can ever help anyone shave that tuition bill a bit, call me. I’ll rent you my experience cheap.JLM.
Wow, trying to bridge the Rhein for the first time,with no advice, when others had done it successfullyhundreds of times before –single digit IQ?I’ve heard that in places the Rhein is fast!Or, Issac Newton said,”If I have seen farther than others, it’s because Istood on the shoulders of giants.”For bridging the Rhein, anyone who’s done itsuccessfully before is a “giant”.But, there might be a reason for some of thefailures, the Rhein Maidens as in Wagner’s’Das Rheingold, Prelude and Rhinemaidens’with English subtitlesconducted by Pierre Boulez,Orchester der Bayreuther Festspieleathttp://www.youtube.com/watc…In some of the depictions of those three sisters,they were well built and not very well dressed andenough to distract a whole company of US engineers!
.The Rhine in Germany and the Imjin in Korea were the two big combat engineer assignments for wars that folks thought were likely. This was the 1970s.I bridged them both in my Army career.The Rhine is the big one as it has no margin of error because of the size and flow rates.When I bridged the Imjin, I had already taught military bridging but still it was an adventure.JLM.
how fast is the rhine?
.3-12 mph depending upon the season and how wide that particular section of the Rhine is.You want to cross as narrow as possible but you have to be where the road network allows tanks to get in and out quickly.There are about 200 good crossing sites in the section through Germany.JLM.
JLM as CEO Coach!damn, what a fine idea
He’s accepting a few more CEOs: http://voomly.com/jeffreylm…
If anyone can get this right Aaron it’s you. You and Riskalyze are a startup case study and a great pleasure to observe from a distance.Learning what NOT to do is one of the smartest and most valuable lessons there is.
That is far too kind, my friend.Can’t wait until I get to that executive recruiting phase and get to work with my favorite recruiter. 😉
And BTW you do know don’t you that even if you are not at the point of “hiring” me I am always happy to give (free) advice or tips regarding your recruiting and hiring activity, right? Much of what I know is applicable at any job level.
That’s very kind of you, my friend! I’m an avid reader of the wisdom on your blog but I may just take you up on that.
I would like to have JLM as a business coach and a flight instructor.
He crosses those analogies a good deal! 😉
Who are the long relievers/setup men of the startup world? Those who are unheralded unlike starters (Larry Page, Jack Dorsey) and the closers (Dick Costolo, Eric Schmidt) but who may be critical in bridging the two.
The press doesn’t care about them. So it’s a secret. 😉
Sheryl Sandberg is probably the best recent example of someone who can transition across these different phases.
Sheryl also had the advantage of having worked for Larry Summers in large institutions…
well Twitter was Jack>Ev>Dick
@dickc is shaping up to be the world’s greatest closer.
@dickc – like Dennis Eckersley – seems to have been a very good starter and great closer!
This is true!
Why is it that some (young) founders realize that, and grow up with their startup, while others don’t?
So much to that situation is circumstantial. I don’t think there’s one answer. Success in an of itself has so many factors… and sometimes it’s just being in the right place at the right time, whether founder or hired CEO.
and sometimes it’s just being in the right place at the right timeWell it’s always being in the right place at the right time. We can even remove the “right time” from the equation. Because it’s super obvious that that is necessary.Let’s say Bill Gates was living in Iowa and had a sick sister or mother that prevented him from moving from Iowa. Of course he would have earned a nice living with whatever he did but he wouldn’t have ended up being 1/1000th of “Bill Gates”.David Geffen moved from Brooklyn and became super successful. Had he had a situation in Brooklyn that was a little less sucky he would have stayed perhaps in Brooklyn.  He might own a nice deli now. Point being is that if things are bearable you don’t look elsewhere you are satisficed. My parents were always restrictive with me and gave me a hard time so I was motivated to make money so that I could be the one in control. Perhaps if they were nicer to me I wouldn’t have been as motivated to escape their control.
Agreed. I was falling back on a common expression.
I think it has a lot to do with the diversity of experience of the rest of the senior team. Surrounding yourself with people who understand how to scale, when to establish structure, what’s the appropriate amount of process at what time, and generally how to run a business in transition gives you better odds. Since we’re filling this thread with sports analogies I’ll use a basketball one: you can’t have a good basketball team of 5 point guards.
Yes. But there are also not so visible factors. Self-awareness is important too, I think.
Self-awareness is probably the most important quality. Those that lack it can’t really grow.
Being able to get out of one’s comfort zone is another factor.
Could be the subject of a Malcolm Gladwell New Yorker article or even a book.What you would find is that there are dozens of things in human nature that result in the “realize that”. Family upbringing, maturity, social circle, mentors, a sick aunt, just to name a few.Nothing happens by accident. If you reverse engineer people (one of my hobbies) you will find there is almost always a way to explain their behavior and actions..
True. That subject is fascinating me. I need to write more on it.
Sticking with the Malcolm Gladwell analogy – and the Outliers principle of ten thousand hours of doing something to become proficient and then excel. Those hours usually happen in steps and it’s true in every field. How much does a pitcher pitch before he can maybe, maybe get to the major leagues? How many shots does a shooting guard make? How much code does someone have to write? None of it happens by accident and I think people look at a lot of the tech billionaires and think, look at that he discovered Twitter in a day. People always hear about the successes though never the failures, thus they think it all happens over night. “He founded a company and two years later he’s worth 1.5 billion.” I think this has a led to belief system where by many people think you get to miss the ten thousand hours of working away.I think it breeds impatience and then a lack of (as my grandmother said) stick-to-idness when once you get somewhere and maybe have to go back to the drawing board. You only learn by doing and failing and working with and for others who are where you want to go.
People always hear about the successes though never the failures, thus they think it all happens over night.For this the “blame” (if you want to call it that) falls squarely on the shoulders of idealistic creative types (reporters, writers, Hollywood, authors) etc. Not on your grandmother (or my father). The message I had growing up was always along the lines of “one in a million” be realistic.Parents don’t brainwash their kids like they used to. If I am correct that’s unfortunate.
I don’t know about brainwashing. this is such a long conversation. I think yes, there is this thing in present day parenting where jr. is honored for just breathing. I think the concept of hard work for the middle and upper middle classes has become something we don’t engrain in kids like we used to be.I do think you can’t underestimate the success stories that appear to happen overnight, from the Mark Zuckerbergs to the winners of American Idol. Never in history have so many “young people” become SO successful I think the reporters glorify it but they are not responsible. I’m not sure what authors do, they toil away for little money and less fame.
I think it was a very different time. People took many years to be successful, nobody expected it overnight. And certainly there was not the new parenting where Jr. gets gold stars for breathing. Self esteem was earned and not a birth right.But I do think never before in history have we had the examples of the Mark Zuckerbergs or the American Idol winners, the reality stars – this type of instant celebrity. Twenty four year olds did not create companies and make billions, they worked under people and up the ladder and the lucky and smart ones made it. Sometimes. I don’t think authors have anything to do with it. Their world has shrunk. I think tabloid journalism and internet access have made people more aware of it.
.Excellent insight. Well played.I think Gladwell’s book was one of the best thought provoking books I have ever read.I am convinced that the 10K hr benchmark is true. I am getting the tattoo.I have had enough careers to test that theory at least 4-5 times.The other thing that is a related corollary is that in organizations, there is some specific “work” that must be done whether formal or informal.Great organizations have a keen understanding of their Vision, Mission, Strategy, Tactics, Objectives, Values and Culture.For some time I wandered away from this basic truth thinking that product focus was enough. I have now come back to the Jesuits.I take this from my last year or so of working with CEOs and seeing who just sails through and who struggles. Clarity on these matters — in writing — is the driver of the organizational dynamic which nourishes the product.It can be a tough slog to get it right in writing but it is really very easy if I can work with someone and coax it out of them. It’s all in there already.There is a reason why Special Forces is special and it is clarity of V, M, S, T, O, V, C coupled with over 10K of everyone knowing their job.There are damn few shortcuts.JLM.
why is it that some people make great spouses and some don’t?why it is that some people are happy all the time and some are depressed all the time?i am not sure the answer to your question is knowable
some people make great spousesLet me give you some data points from someone that has been in multiple relationships since college (as opposed to you who has been married and only is aware of what they observe or hear (I’ve got that also as data btw.)).Take the same person in a “relationship” with either a life or business partner and you have totally different dynamics. My relationship with my current spouse is nothing like with my ex spouse or ex girlfriends.Why? I am pretty much exactly the same. But they are all different and there are a host of reasons why it just works for me now. But it’s not just me. It’s not just her.It’s the combination of the both of us that just works. And the situation. Any many other factors (balance of power, kids endless list).Same with my ex wife. She has found someone that just clicks with her and what she wants out of life. He follows her around like a puppy dog. He is totally happy where I was not. She is totally happy where she was not with me. Same person (well there are some little twists but that’s a much longer comment).
.You cannot really make yourself happy but you can damn sure prevent yourself from being unhappy.JLM.
Agree with that. People always talk about how “money doesn’t buy happiness” as if having nice things makes you happy. What money really buys, if used properly, is avoidance of unhappiness, pain, discomfort and all of that.Depression is a whole different discussion. My personal observation (non scientific) is that people who tend to be narcissistic and think highly of themselves (for even the smallest little thing) would tend to be less depressed than those who are more humble.I’m reminded of a guy that I know who thinks the smallest little thing he does is a major accomplishment. As a result of the party in his brain over this minutia (and his ability to block out the smallest frown from third parties who don’t agree (also a key to being able to sell btw.)) he is usually in a state of bliss. He’s not stupid either. He just thinks the smallest thing is the biggest deal if he accomplishes it.
.Money cannot buy happiness it can however rent it.JLM.
I hope it could become more knowable in the future.
The short answer is that management goes against the core values and motivators for the typical entrepreneur.The long answer is from world of academia. In the career management literature, we have 4 basic career path preferences: Specialist, Generalist, Entrepreneur and Manager. These are basically just a way of putting a label on a group of people that share a similar set of underlying interests, values, motives, anchors and rewards.People who prefer an Entrepreneurial path thrive on diverse projects with measurable and visible outcomes. Typical motivational anchors are autonomy, variety, risk, challenge, change and freedom from constraints. These things feel easy and are exciting.People who prefer a Managerial path are interested in increasing power and authority. Typical motivational anchors are power, influence, leadership, control, status, managerial competence and directing others.Motivational anchors are sources of intrinsic motivation. Its not all that common to find someone whose motivational anchors are a cross between an entrepreneur and a manager, yet this is what is required for successful founders to “grow up” and become a successful CEO.Intrinsic motivation is a strong predictor of what people are able to focus on over long periods of time. Making a few million is an extrinsic motivator. Extrinsic motivators are very, very ineffective sources of motivation over the long run.A very typical scenario we’ve all seen is the case of the best engineer or sales guy (specialists) who love their job and are killing it for the company… Until they get promoted to management. They are happy for a while because they got a new raise and a title (extrinsic motivators), but eventually they suck at and do not enjoy having to managing/influence/wrangle others all day and hate life and probably will burn out or leave. Pretty much the same forces are at work when an entrepreneurial founder has no choice but to become a manager.So maybe the question should be “Why is it that some entrepreneurs are able to suffer through the change from mostly entrepreneur to mostly manager long enough to make it to the finish line?”Thats why, as Fred said, ongoing coaching, mentoring and a supportive team are crucial for maintaining the motivation to grow and push through the uncomfortableness.
But in practice, it’s not true that entrepreneurs can’t manage. Look at the ones that started small companies and still managing them.See this piece on How Great Entrepreneurs Thinkhttp://www.inc.com/magazine…
I agree. There are many founders who have effectively managed their company to greatness. I’m guessing for most it was a painful process (and Fred confirmed in the post that for all of his portfolio companies it was).I wasn’t trying to say that Leadership and managerial skills can’t be learned. I was trying to say that if a founder is lacking the intrinsic motivation to be a good manager, then the process of learning to be one is going to be much more difficult. It’ll much easier to give up before you’re able to grow up. (Sorry if that wasn’t clear.)The big mantra in corporate leadership development is “focus on your strengths, don’t worry about your weaknesses.” There is plenty of data to support that theory and you can get away with it in a big company.Your question actually inspired me to start writing a post around why successful entrepreneurs need to do the exact opposite and start focusing on their weaknesses as early as possible. They’re probably going to be a manager one day (even if it hurts) whether they like it or not. Bite the bullet early and start figuring out how to prepare.Of course, there are exceptions where founders are making a go at a culture that functions without managers like AngelList, Valve, Treehouse and GitHub. This is my new obsession. 🙂
I think it would be easier to have a founder and the early team shift their role if they could have some continued compensation once the shift takes place. I have watched too often where an early team will not step out of the way because ” They have no where to go” and no other compensation model. Therefore they remain in control. On the flip side, I have seen the early founders pushed out with no where to go and no ability to “Buy their early shares” so they can profit from what they did in the future. Regardless of the shift that takes place, the new management team needs to remember that they would not be “there” without the hard work of the early team that created the opportunity. Their is nothing worse than an outsider coming in and openly criticizing the revenue generating product. We all realize it could be better, but at the time those were the “tools on the spaceship” that we had to make what we could. We don’t mind the “suggestions”, but best to check your words before you begin an overhaul of what got you your new role. JJD – Remembering the early days…
isn’t the compensation model the fact that they own the largest stake in the company?
And that is why Mike argues that founders should pay their dues working in someone else’s company before starting their own.In addition to what you said to rebut what Mike said -“But often a first time founder has the right idea at the right time and assembles the right team and ships the right product.”… I will add that Mike’s statement assumes that there is a position at “someone else’s company” that will allow you to observe and learn what you will need to know in order to do it yourself. How many years is that going to take? What other commitments will you have (because of pay and lifestyle choices) that will golden handcuff you so you can’t start your own company? I started out of college a business which isn’t what I really wanted to do. But I didn’t have enough money to do what I wanted to do so I started something that I could with the idea that I would make the money necessary to do the thing I really wanted. 9 years later I sold the company and had the money but the market had changed and was no longer as attractive. And I had gotten married as well. And I had “something to lose” which wasn’t the case right out of college. My Dad always annoyingly talks about people needing “partners” in business (his brother was his partner) as if you just go out there and the perfect partner is available at the right time and willing and able to assist you. Most people who do have partners have them because of serendipity not because they stopped by the neighborhood partner store and picked one up.
Loving the idea of a “friendly neighborhood partner store” 🙂
And even if there was said store it would assume you could gather all the info you need and project how that purchase would pan out in the future.For example what happens if the partner you pick up has health problems or their parent has health problems or they are the type at the drop of a hat to fly to the other coast because a friend gets married and they want to be there? Or they get married and their spouse starts to (fred loves this) “hock them” about working to much?Thing is when you read about successes you are reading about people who things worked out for not the people who failed because they had the wrong partner or something screwy happened.
Being a business partner, a good one, is a lot of work.And sometimes people pick a partner for all of the wrong reasons.
.Partnerships are more challenging and fragile than marriages.JLM.
I agree with you more than you agree with yourself.
You get an Amen on a Sunday.
To add another sports analogy: it’s a marathon, not a sprint.
I spend my days working at this cusp with many companies. I spent a career working towards that inflection point for myself many more times.But I rarely think about the psychology of the founder, I work with the realities of the market and the business.There is most certainly a psychology of business and people and I’m as behavioral a marketer and manager as there is. But I find that the smartest let the market realizations drive them– in getting coaches, bringing on experts to assist, hiring what they don’t know how to do and learning to deliver and act on what is in front of them, not just in what they see in their minds eye.The best never loose the maniacal zeal and learn to trust what they don’t know. This is not all, but it is the a large proportion of the biggest winners.
I think that’s true of anyone who becomes a strong leader. Knowing that we don’t know what we don’t know opens us up to learning.
But I rarely think about the psychology of the founder, I work with the realities of the market and the business.[x] I rarely think about the psychology of the founder[ ] I often think about the psychology of the founder.Interesting. I’m curious if you discuss gossip (non business) type things with your sig-other? Or if you enjoy gossip at all?
You are asking me whether I’m a boring person with no overt non work activities besides wine, travel, fitness, skiing, nutrition, NYC, and collecting art 🙂
Hi Arnold.As companies begin to achieve product / market fit, it becomes ever more important for the founders to optimize their time.In the beginning it makes sense – for cost purposes – not to farm-out “menial” tasks (bookkeeping, payroll, tax filings, etc). A good founder should be able to do these things and still focus on the company’s development.But there comes a point when the founders reach overload, and that’s the moment to begin delegating / outsourcing all but the priority tasks.This buys the founders more time, but – as Fred says – it will only get you so far…If things continue to go well, bringing professional managerial help is practically a must IMO.
No argument with this David. If I implied differently, I misspoke. So much for pecking this in on my phone on the subway.My point, so inelegantly not made, is that indeed smart people do just that because the market is pulling them and we all know that no-one has time on their side.And of course it’s way easier to delegate the non-priority tasks. The big one, and one that I’ve been on the other side of often, is delegating the priority tasks. The marketer to the tech founder, the sales/channel lead when the vertical opens up.And–most of us do this either a bit before or usually when we need it which is often the worse.
what is the definition of ‘finish’ here, for a company?
Profitability, escape velocity, acquisition?
i don’t know. but i am not sure it matters either.
a company is a composite of different people with different but aligned interests.i might suggest that there is only one start, but many finishes.
True, and then continuing to adjust to reality as it never fully fits the plans. Zeal and flexibility of mind can be a tough combination
Really resonated with me. So hard to finish. Totally right.
Yeah, my version of Mike’s advice isn’t that potential founders should take the alternative path he suggests. Rather, for a startup to make it all the way it will require some people that did take that other path and who bring a different set of skills to the table.
right, you have to build a team, and your place on it should be up for discussion
It’s a Siege not a Raid
!Amazing Post!,Fred, where do we can find a mentor?I think my partner and I needs one.
coach or mentor?mentor is usually someone you bring onto your board or advisor board and pay with equitycoach is usually someone you hire to help you get better
We need to get better. We need a coach then eventually a mentor.
@JLM:disqus is a damn good coach. I have used him and recommended him with other startups.
Thanks you Fred.
.WTF, I thought you were coaching me?The guys you have sent to me are truly extraordinary. You, my friend, are a damn good judge of horse flesh and those guys are thoroughbreds.JLM.
check out clarity.fm
There is study that shows that stocks whose companies have founders as their CEOs outperform other stocks.I’m reluctant to make any real world conclusions from stock prices but I think the concept is valid in this case.I think an example from the film world is relevant here.folks like Tarantino write, direct, and do much of the editing. This allows for a singular voice and a clearer story to be told. Likewise having a founder who is also the CEO helps preserve the sanctity of the mission and thus the devotion of the staff. This is priceless.
This allows for a singular voice and a clearer story to be told.Exactly and I’ve long noticed this pattern in a number of places. If no strong singular control you get that camel is a horse built by committee thing. Especially true in situations that are primary creative in nature. One of the things I never do is discuss business deals with anyone else. I don’t want them messing with the pure oxygen of my thinking. I don’t want their opinion on whether my strategy or theory of behavior is right. (Because there is no “right” in strategy many times it’s based on a particular person’s interpretation of various inputs which obviously varies with the individual and their life experiences.)
yup. that is true in the VC world as well. we make most of our money on companies where the founders go all the way. but it takes work to be able to do that. that’s my main point. they have to make a big switch and it takes work and self awareness to make that switch.
Potential of a COO?
.Yep, everything gets down to jockey, horse, course.The best jockeys can make some pretty sad nags run.JLM.
Cute, isn’t he.
are you going to try and set him up?
“At some point calm, rational, supportive, and highly communicative management skills are required.” That’s when Leadership skills emerge (or not).I think a lot changes at the various break points of evolution. Every doubling of the number of employees brings new priorities:Under 30: MVP, PM Fit, First Growth Phase30-60: Business Model Realization, Marketing60-120: Revenues, Management Structure120-240: Processes, Employees Development240-480: Strengthening of Senior Management, BrandEtc.
Smart piece. But your last statement is wrong. Number of closers in Hall is minuscule. I think 3, maybe only2. Many reflective thinkers on baseball believe role of closer is overrated and not even the best closer is asgood as middling starter. Remember, Rivera was going to be washed out of the game before he got sent tothe bullpen. And I think his longevity is a statistical outlier.
glenn horowitz in the comments!!!!!!!!i added an update to this post Glenn because you and John called me on that analogy. a bad one indeed.
Closers are relatively new to baseball. It’s a stodgy game. There is only one designated hitter (DH) in the hall. Paul Molitor. It’s been around since 1972, right around the time the closer was invented. Closing stats were codified and memorialized by the late Jerome Holtzman. There will be more going in. Lee Smith, Mariano Rivera etc.
By stodgy you mean tradition bound, which is why an issuesuch as place of closer can attract much attention. First,Paul Molitor didn’t go in to the Hall of Fame as a DH(oddfact: first player to hit as a DH was Jewish, Ron Bloomberg,for the Yankees). In fact, Molitor played two positions, shortstop and center field, and he is the only player inhistory to have 1500 hits at two positions. In his lastfew years did he appear in games as a DH but no onethinks of Molitor as a DH. The one DH who regularly discussed as a candidate for the Hall is Edgar Martinez, whoplayed his entire career for Seattle, alongside A Rod; butthe fervor surrounding his possible induction has died down.If someone gets in to the Hall as a DH it’ll probably beDavid Ortiz of the Red Sox. The attention focused on therole of the closer has been intensified lately by the abundance of attention generated by Rivera’s retirementand the slick methods the Yankees in their season ofdespair have marketed him. Oddly, Rivera’s successhas outstripped every other closer in the history of the gameto a degree that might make the induction of future closersin to Hall even harder. It’s as if he single handedly hasset the bar for home runs at, say, 1000. In fact, the statshe’s accumulated in his endless career make the presencein the Hall of the other closers almost farcical. But thisis the enduring charm of baseball: no other sport can belived on the outside looking in, thanks to the clear statisticalevidence its history has left behind.
I started a Disqus account for him. You will be hearing more.
.All starters start at 0-0.Rarely does a closer start at 0-0.You can only be a “good closer” if you are starting with a winning score.Of course, Rivera is the best ever.There was never anything like Billy Wagner coming in for the Astros and throwing 105 MPH. Nobody wanted to get hit by that wild man.JLM.
Arnoldis Chapman, Cuban exile signed by Cincinnati a fewyears back, threw 105 miles an hour; after a few years ofathletic seasoning and psychological maturing, Reds moved himto starting rotation. Wagner was sensational for about 18% ofthe time Rivera has been.
.Whoa, big fella, calm down nobody is comparing Wagner and Rivera. I’ve got enough love for both of them.You had to see the spectacle when Wagner would come to the mound and the ball park would go crazy.I saw him through a measured 108 MPH which was awesome.JLM.
Why is everyone so fascinated with the story arc of the starter? Why does are the good closers shut out of the limelight? In baseball, business, etc.?I think there are some interesting cultural / sociological tid bits in here.
Mariano Rivera’s greatest accomplishment may have been how he dealt with maybe the greatest blown save in major league history. Just a few weeks after 911 Mariano makes a rare mental error costing the Bronx Bombers their 5th World Series ring in 6 years. He brushed off this game to become the greatest closer of all time. Compare this to other closers who have blown big games. Without exception, they were out of the big leagues soon thereafter. The great CEOs seem brush off huge blunders (starbucks music businessand teddy bears) and get right back on the hill and show their greatness (Howard Shultz)
I’m not ready to jump on the closers are not important bandwagon. The great closers make the the middle inning desperation time for the opposing team. Desperation (more often than not) s the cryptonite of Talent.
Cryptonite of Talent: good phrase. Clever.
When I have 25+ notifications (likes and reblogs for those new to Tumblr) on my Tumblr before 9 a.m. I know without looking that you have reblogged me. I call it the Fred Wilson effect.I was deeply impressed by Mike’s post and when I read it thought “I’d love to hear Fred’s thoughts on this.”BTW thank you for the shout out Fred. You are so good about crediting others.AVC regular. I love the sound of that.
you’ve been one for a while. The better question is, what is your drink
You will have to have one with me to find out. We’ve already had coffee together. That works too.
Yes, regular!!!I love the crotchety post. There are only so many shortcuts!
I’m a starter with two exits, neither of which I closed as CEO (board though). I think I’d like to take a crack at coming into something and growing/reviving it though. Getting something from 0 to cruising speed is a helluva lot more work 🙂 ( different work, anyway )
.What a great topic and one that is so true that I want to kiss Fred, in a manly way like he had won the America’s Cup. Hey, on the damn cheek.I retired from the CEO-ing business over a year ago after 33+ years of being a founder, CEO, President, Boardmember of public and private companies. I do not miss it. I laugh at myself and what I learned in those years. The screwups I survived, the triumphs I enjoyed and the things I learned.Through this blog — thank you Fred Wilson and, most importantly, community characters — I was contacted by a surprisingly high number of CEOs and I fell into the CEO coaching business.I do it under the guise of “The Musings of the Big Red Car” and the “Wisdom of the Campfire” but usually folks just reach out via Skype or email or a phone call.At first I just helped folks as much as I could but when I saw the demand and COMMON PROBLEMS, I began to systemize my approach.I have several CEOs with whom I have worked for over a year and they have just blossomed. They are crushing it because, in small part, I have been able to provide them a bit of structure and experience in their already accomplished endeavors. They rent my experience and I am only too glad to assist them.The most common thing is a chat about Vision, Mission, Strategy, Tactics, Objectives, Values and Company Culture. The chat is guard railed by a set of almost 150 questions that I think a CEO should know about his company and himself.Then we develop a “canvas” of his business model guided by a series of programmed questions.In every instance — even when they don’t do the work — CEOs tell me — Wow, I understand my business better and I have a better handle on what I am doing and where we are going.I had a huge blind spot — I thought that CEOs knew this stuff and had forgotten that it took me a third of a century to learn this stuff. Along the way I had learned a lot of things that work like a champ — shorthand really — and some stuff that will kill you — third rail stuff.I learned how to deal with people and I have recently learned how to give advice.Confidentiality bars me from trumpeting the triumphs of some of the CEOs with whom I work. They are fabulous and they are crushing it. It was all in there, all the time. I just knew where to prod and poke and coax.Some of these enterprises are positioned to go the the paywindow and, as you well know, I am always in favor of visiting the paywindow.What Fred says is perfectly true — get the product right but also get the delivery system — the company — right.You can do it. Don’t ever suggest to yourself that you cannot be a brilliant product guy and a brilliant leader/manager. You can do it.Go to http://themusingsofthebigre… and get copies of the documents I have noted above.Know this — CEOs just like you have gone through this “borrowing of experience” and have dramatically improved their personal performance and company performance.The only secret: It’s really not that hard and it’s already inside you.Let me know if I can help.JLM.
i am always in favor of going to the pay window too!this is all true and great advice JLM. but you have to want to do the work and become a great CEO. it doesn’t just happen.
.I agree more with you than you do with yourself.In life it is not the IQ, it is the I WILL. It is the freakin’ I WILL.I cannot tell you how many people I have competed with in my life who are infinitely smarter than me but who were sleeping when I was at my desk.One wins all competitions when the competitor is sleeping.I have a generally optimistic view of people but know from my years of experience that sometimes the sleeping dragon cannot be awoken.The big secret is — there is no big secret. It just requires a bit of work and cleverness.JLM.
Makes me think of the story of Cliff Young (if you don’t know it, I think you’ll love it too) -> http://en.wikipedia.org/wik…
.Wow, what a great story. Well played.JLM.
This whole thread is a keeper.I’ll capture it tomorrow when thenew comments are rare.And I will get the documents fromThe Big Red Car.Nice to have everything digital sothat can get a copy, index it,reference it (I have several verysimple techniques that work wellfor me), and back it all up.A good hour at AVC;
This al sounds very interesting to me — and I had no clue! I should pay more attention to what folks on AVC actually do, though I kinda like not knowing — I’d maybe censor myself more if I knew, and I think I learn a lot here because I don’t censor what I say to anyone.Anywho, I will be hitting you up to inquire about your services in the extreme near future.
wait, you retired, and we didn’t have a party?
I don’t think it is retirement from work so much as retired from his last company.I doubt JLM knows the meaning of the word.But any excuse for a party.
You’re a great resource Jlm
.Thx, it’s the clients, no?JLM.
If someone is looking for an advisor, would this be something different than what you do as a coach?
.No.My view on things is that “advice” is the umbrella under which mentoring, advising, coaching all fit.Different tools but all in the same toolbox.And, it’s definitely not just for CEOs. Everybody can use a bit of a sounding board to plot their course these days.JLM.
Please head to Giant’s Stadium today, something seriously wrong
I’ve never built a successful company from scratch, so I’m possibly talking out of my ass. However, I believe that, for folks with management experience under the belt, its the other way around — starting is harder than “finishing.”I’m 30. I’ve had a job in the advertising/digital/design agency industry since I was 19, so 11 years. Over that time, growing into a senior management role in several large global agencies, I became comfortable with being responsible for dozens of people and million dollar budgets. “Calm, rational, supportive, and highly communicative management skills” were acquired.But holy crap, starting is a bitch!I previously had things I took for granted handed to me. An existing customer base. Brand equity. Legacy processes. Previous learnings. Colleagues with seniority. Accounting. HR. Someone to set up my email for me. Money! The list goes on. You don’t get any of this when starting.Yes, starting and finishing absolutely are different. But here’s the tragic hypocracy — the startup community is much more interested in good starters than good finishers. If investors are so willing to take a good starter and coach her through the finish, why aren’t they equally or more excited to take a proven finisher and coach her through the start?
I don’t think starting is harder than finishing. I don’t think the difficulty is comparable. More apples and oranges. It’s a different skillset. Legacy companies often screw up. Look at Microsoft, Blackberry etc. Startup companies often fail, more often than legacy companies. But, that is usually a function of cash, access to capital, and ability to generate revenue from a little bit of change. Bill Gurley’s post on converting customers is enlightening from a big company perspective.
You’re right. I guess starting is harder for me because, well, I haven’t done it successfully. Yet.I also conveniently had the infrastructure of large multi-national companies to train me how to “finish.” For starting, all I have are a collection of blogs, their attached communities, and a ton of trial and error.Which takes me right back to my point: where’s the training for starters who are proven finishers?
“You’re right.”FWIW I don’t agree with him at all. And I’ve been observing people doing this for longer than you have been around.He may be correct when it comes to certain types of business but if we assume that all businesses start small getting over that initial hurdle is a big big deal.If you are good and creative and can provide value to a customer base (and it’s not over saturated and has some low hanging fruit) the things you don’t know aren’t a big deal.I’ve seen more average people make it because they have something that other people want and will pay for because the money that comes in buys solutions and papers over mistakes.
Blackberry didn’t screw up as much as Apple came along. You would argue that they didn’t properly react to that threat. But if you look at companies how do you know what would happen to Boeing if someone else came along and was a better Boeing? You don’t. Or to GM, Ford etc. if there was no oil crisis and/or the Japanese didn’t have their shit together.Same with sports, right? A team is the best only because there is not another team that is better.
I’d agree with you and then we would both be wrong. GM/Ford can use the oil crisis as an excuse, but there was a lot more to it than that. Blackberry was stubborn. What about Microsoft? Or, Kodak? Bell and Howell? Xerox? The past is littered with companies that can’t innovate and transition. It’s harder to pivot a big company, but at the same time they have lots of resources at their disposal to try and right the boat. Startups are hard, but can find a niche and survive. Starting a company and growing it to 100 person company is a totally different skill than being CEO of a larger firm that is having trouble.
“they have lots of resources at their disposalWell I have to tell you that that is something that I would give up sex for. Resources at my disposal. Can’t even imagine what it is like to be able to have, for all practices purposes, unlimited resources at my disposal. Problem is obviously that you don’t have any more of the resource that is the same with everyone. Time. Of course having options allows you to do more with that time.What about Microsoft? Or, Kodak? Bell and Howell? Xerox? The past is littered with companies that can’t innovate and transition.Look let’s just put ass on table here. Companies merely are able to execute on the low hanging fruit of opportunity except for the ones that simply throw shit at the fan where the shit and the fan happen to be in the right place at the right time.So what companies are really guilty of is not hedging because you can’t fault them for not cannibalizing their existing business.  Because it is possible to make something happen that wouldn’t have happened despite what business school would like you to think. Not that the business press doesn’t run stories about how some businesses boldly do that and succeed. But then again the press also tells people they are heroes for risking their life to save a complete stranger that somehow it’s ok to put yourself in harms way for someone else.Startups are hard, but can find a niche and survive.Agree totally. I mean holy fuck how do you take an organization with 50,000 employees or 500,000 vs. one which has 100 people and can easily carve out a new business opportunity?What’s the saying in your business? You can’t time the market? Well with business ownership you can time the market. You can have a company that is successful, sense what is going on, and bail out and be on to the next thing. Sell out at the peak. And even if they did hedge it would have to be enough to move the needle or so they think. Because they will automatically extrapolate that a given opportunity would never be big enough so why bother with it? I dealt for many years with Xerox. A very well run company (from a customer perspective for their big iron machines (100k – 250k)). Salespeople were professional hard core salesman. Products were the best (Kodak competed and probably was technically better but they couldn’t match Xerox marketing). This shit will happen to the current darlings. All those young people working there will grow old and have different priorities. They will get complacent. Happens when things are to easy in business.
It’d be super tough to beat Boeingin large commercial aircraft or wherethey have a major place in defenseand aerospace; Boeing just has waytoo much going for them in technology,design, manufacturing, and marketpresence.> Blackberry didn’t screw up as much as Apple came along.A company in the position Blackberry wasin has to think long and hard about howthey might be attacked. In the case ofBlackberry just imagine what might bedone with a really ‘cool’, shirt pocket ‘phone’ based on the processors, mainmemory, and sensors available. People,even at IBM’s Watson lab, had been thinking about ‘wearable’ computingback in the early 1990s, maybe the1980s — when the hardware was notnearly ready. That IBM’s main linemanagement failed to make money with that work is not surprising.But before the iPhone, ‘wearable’or shirt pocket computers were alreadyan old concept.My take is that Blackberry was just asleep at the switch. Can’t do that — just gotta stay awake.
One of the reasons by the way coming from a business family, working in a small business, and most importantly paying attention is so important. (Not everyone pays attention and/or asks questions). It allows you to fill in the gaps of what you don’t know because you are familiar with the raw materials that go into doing what you want to do. So you just make things up as you go along. Doesn’t matter if you are totally right either since business is analog not digital being off a bit isn’t that big of a deal. Like with cooking. Even if you are way off.  You have some leeway.I remember when I had to decide markup on something. I just took what I knew from another business that I was familiar with as a kid and went with it. The markup was much higher than typical with what I was selling. But it didn’t matter people bought based on perceived value they didn’t know how I arrived at the value. Not taught in business school. Learned in part when I was waxing cars, shoveling snow, photography, in my dad’s business etc. Most importantly seeing people’s reactions and gauging the limits of what could be done. Pay attention. Very important. Also testing limits I guess you could call it. (Never got punished for being clever. Even today I tell my step son (who isn’t supposed to watch TV at night) isn’t it obvious if you hear me coming up the stairs you should shut off the TV and pretend to be sleeping? Isn’t it obvious if the boss is around you should appear to be working? Always amazes me the number of people who don’t get that one.Anyway what you are talking about is basically having a “seat of the pants” feel. Which means you have the confidence to figure out on the fly what you don’t know the answer to. And also some sense of the downside risk to the action you are taking.
because a lot of finishers are not so interested in the starting process
Which goes back to the question, can entrepreneurs be made or must they be born?
its both. you have to have it in you, but it also has to be brought out of you.
Troy Henikoff of Chicago Tech Stars once told me a similar thing. He said, “Some people love to build companies to 100 employees. But after you get over 100 employees you aren’t doing anything but managing people. Managing people is different than building products and companies.” It is rare to find a CEO that can take a company around the course from startup to finish. Rare. It’s important to note that at the beginning.
Damn right. Didn’t Google wake up to this, now those that take an idea into something great are now helped to hand over to a different management team so they can focus on their strengths ie ideas that become something tangible. All this helps reinforce how important it is to manage/ lead by leveraging strengths.
Great points (I read this after you updated the blog post to call our the baseball analogy which I agree had too many holes). What about the other big point Mike had in his post which was college kids are too young to start companies? Clearly we’ve seen counter-example to this (Microsoft, Facebook as Mike blogged about) but they are outlier cases. Another good (separate) post could focus on the requisite skills an entrepreneur should strive to have before starting out.As we’ve all talked about how crowdfunding and the JOBS act (and implementations such as AngelList syndicates) will make it much easier for entrepreneurs to start businesses. So this is likely the BEST time to talk about what skills they should have (or try to get) in the early phases.
We wrote about finishing some time back -http://statspotting.com/jus…
The low number of closers proves your point… Go Cards!
>> At some point calm, rational, supportive, and highly communicative management skills are required.I wonder how many founders have a list of these people in their minds from the get-go?. I’ve never been a founder, but I do plan on starting a company some day — if the company is a “get big fast” type of company (ala Spolsky) , I already have a list of potential CEOs in my head who I _might_ try to recruit (people I know personally and like a lot)
Fred- agree that starting and finishing are poles apart.Yet, the debate of “maker vs. manager” almost always falls apart in creative, product-led companies.Steve Jobs vs. Tim CookBill Gates vs. Steve BallmerAkio Morita vs. Howard StringerZuck vs. Sheryl SandbergLarry/Sergey vs. Eric SchmidtPackard/Hewlett vs. a dozen failed ceo’setc.etc.The DNA of a creative company is delicate. The “inept at scaling the company” problem needs to be addressed by bringing a strong COO and managerial talent to assist the product founder, as early as possible, and creating structures that allow for the product founders to lead.Hollywood does that by separating the “director vs. producer” roles from day 1. We in tech, muddle that into a single role, expecting founders to be good at both “making” & “managing”. That needs to change, since we’re not running silicon factories anymore.Imagine if they start letting Producers direct movies, just because the Director can’t manage the scale.Product companies need to be lead by strong product people. Not GM’s but PM’s. Else the decline is just a matter of time.
.Perfectly brilliant comment.Well played.The challenge is always — which one are you at an instant in time?There is much to learn about managing the creative process from successful movie makers.JLM.
JLM- coming from you, that’s a huge compliment. Thanks sir.The real question should be, why is a director being made to act like a producer at any given time? One needs to make every frame/pixel count, the other needs to run the show.Very different skills and its not that one can’t learn the other, but that’s more rare, and that’s perhaps why so many product companies fail in this transition.
.The discipline to organize and run organizations in concert with the strongest possible talents is a fundamental business skill.Since Drucker it has always been Vision, Mission, Strategy, Tactics, Objectives, Values and Culture.We may call it and emphasize different things but no generation invented sex or business.We all get better but we stand on the shoulders of others — if we are smart.JLM.
That’s why the guy running the movie studio goes to B-School and reads Drucker, while the guy making the movie goes to film-school :)Keep in mind, I am only speaking about Product companies, not the entire world of business.
.They both should go to Film School and get an MBA in finance.I always wanted to build high rise office buildings. I did.I got degrees in civil engineering (qualified for both math, economics) and finance.I built tall buildings. I fulfilled my dream so completely that I had nothing left in the bottle.Today I drive by those buildings to visit my soul — it is encapsulated in a few of them.Stonewall Jackson: “You may be whatever you resolve to be.” He taught at my alma mater and I looked at that quote engraved below Jackson Arch for 4 long years.JLM.
you need to be able to do both these days. Sadly, b-school drils out the film school in you and film school, the reverse.
That is an interesting analogy about the director and producer. As someone who is fascinated by the dynamics of starting and building companies, I am very intrigued by the analogy, although I don’t have the personal experience base to fully assess its validity.I am also intrigued by the idea of founding teams or creating a leadership team early in the process — as you described.I have my money on the millennials to reinvent the way that companies are led. They more naturally think in terms of community, teams, doing things together than the “rugged individualist” boomers.
Donna- Thanks. Companies that make innovative products are very different than others in the corporate world. This analogy strongly revolves around their needs.Not to pick on Meg, but an eBay where a GM could run the company, vs. an HP, which used to have strong product DNA, can’t be run by a non-product person as the head. MS and Ballmer are another example of what happens if we let GM’s not PM’s run product companies.Tech history is relatively short, but I am certain many great product companies died when a “producer” starting directing them.
Those thoughts have long made perfectsense to me, and I keep thinking them, butnot all the available advice agrees. So,do the entrepreneur thing — gather data,think, make a decision, and try it, evenif many others disagree.Good to hear some advice that agrees withwhat I’ve long thought.Now. let’s start a discussion: What’s theperfect COO? To keep the discussioninteresting and definitely non-PC, discusspro/con of male/female COOs. Or at myundergraduate school there’s a coed whohas organized everything on campus short ofthe squirrels in the trees. So, is that a helpfulbackground for a good COO? In a small,growing, information technology company,a sufficient background? If not, what if shealso has JLM’s cell number and a consultingbudget?
Solid comment. Nothing covers up a CEOs shortcoming as well as the rising tide of a great product.
Bhanu – your idea is interesting, but your Hollywood analogy does not quite hold.First, Jason Reitman – a gifted storyteller – doesn’t get to helm Michael Bay & James Cameron scale movies, for a reason: he does not scale.Second, your suggestion that MS, FB or GOOG were creative – in the sense that they repeatedly brought a series of massive hits to market, a la Pixar – also does not hold water. They each only had one major cash cow hit.Third, the steely eyed Steve Jobs of 2005 ( or Larry Page of 2013 ) took their core ethos outside of product design & expanded it into business design. I am a recent convert to the new Larry Page……he is making big bets on hitting another monstrous hit (autonomous cars, wearable computing) while blowing up Eric Schmidt’s goofball Grad School culture.Its just not this black & white.
Great post. I’d clarify that “finishing” means consistently and successfully changing the product, team, business model, and culture to address the evolving set of challenges and opportunities.No doubt, It’s easier to build something than to change something.Sure, building something is lonely and riddled with self-doubt and endless nights. But creating something from nothing has less friction than changing something. No politics or entrenched ways. Creating something new is innately human, it runs with the grain of our natural creative spirit. It feels right.But changing something feels wrong, at first. Teams don’t like change. Our daily habits and systems keep us centered. Just recognizing that your product, team, or operations need to change requires an incredible amount of self-awareness. Instituting the change is a battle against our default: keep doing what we’re doing.Everything that is built must be changed, time and time again, to be finished. Leading change is working against the grain, which is why we see so many great starts, and so few remarkable finishes.
I wonder how many startups include the ongoing cost of change into their initial runway of costs.
Is there a way to integrate change into the things that ground us – make it less uncomfortable, less frightening?
A cup of coffee will always be a cup of coffee, you can give a biscuit or a chocolate with it. nothing else. Please explain what you meant by “easier to build”.
So much truth and wisdom in this comment.As I was reading this I was thinking of the contrast between recruiting leaders for a venture-funded startup and a private equity backed turnaround. Similar abilities and skills needed and yet vast differences — mostly for the reasons you’ve stated.
I think of starting as “figuring out what will work” and finishing as “making that which works, work consistently, predictably, reliably at greater and greater scale”. That oversimplifies, of course; the world is not static so once it’s working predictably and consistently, something will change and you’ll need to start again, maybe a little bit, possibly a lot.Translating it into people, in hiring, we don’t expect to normally find in the same person the temperament and aptitude of both a great accountant or operations person and a great salesperson. Who would write a job description with the requirement: “must be a natural born salesman and the most naturally gifted meticulous accountant”? No CEO would limit their hiring process with that limiter. Someone world class at both probably exists but finding someone who is an A+ at both is going to be an order of magnitude (or more) harder than hiring two people, each of whom has one aspect and letting the two complement each other. I think the same is directionally true for starting and finishing.What does it mean for founders or founding CEOs? In my first significant CEO (and founder) role, I thought that being CEO meant having to be amazing at both starting and finishing just like I read about the business greats in the business magazines. I liked starting and finishing but found that the discipline, structure and repetition of finishing came less naturally and I had to work at it more. I later woke up and understood the obvious – that the starters (or CEO’s) job is not to be awesome at both – it’s to be self aware enough to know what other talents are needed and to build a team that is amazing at both and where neither ability is seen as less sexy or important. I think that this is something that rarely gets surfaced in the business press, particularly in the tech entrepreneurial stories that have come to dominate a lot of the business press. For every 100 words about the starters, there is rarely a single word about all the people around them who were as strong at the finishing work as the starters were at starting and without whom none of it would have ever worked. Making the trains run on time does not make nearly as good a story. How many stories are written about the ops engineering at Google that scaled their compute power to handle Google scale? Self-driving cars are a much sexier. What would have Google been if the people doing the scaling had not been up to the challenge? For all us starters who feel like they need to be “like Larry Ellison”(Steve Jobs, Bill Gates, et. al.) and do it all, it’s probably worth understanding two things. We’re probably not “Bill Gates”, sorry. But then again, Bill Gates probably was not either. It took a team. The great starters seem to consistently figure out that they need to complement themselves with great finishers. If the greats need it, all the more for us mere mortals.
Yup. Well said Elia. To be a manager, you need to love to manage people and the objectives behind them.
In other words, one makes it attainable and the other makes it sustainable?Love this comment. Important message that needs to be out there.
I like that – attainable versus sustainable. I think there are a lot of shades of grey here, but yes, I think it takes both aptitudes over time and in the right proportion and there is no reason the full dose of each has to come from the same person. As Fred references, probably generally easier to write on paper than execute in practice. Years ago, I was involved in a transition, from me to a new CEO, that did not go nearly as well it should have and it had an obvious negative impact on the business and everyone in it. Easier said than done.
That’s so true, and I just felt it as you said “after hitting the Product Market Fit”. Having employees, hiring and managing a team is completely different than the early stages. I wrote so many bad things about doing an MBA, but I think it’s becoming a bit more useful these days.
I agree with Donna’s post. I am that idea guy that knows he needs a solid team (even at start-up) and to be honest, I’m not sure that I will be excited or interested in running the functioning money-making version of our venture.We are still years away from being a stable entity, but it makes so much sense to start planning that right now. It’s a bit tougher to find the right mentors and advisers in Saskatchewan, Canada.Thank you for the post Donna and all of your help. It is greatly appreciated.Chris.
Companies are like kids. Easy and fun to start, but require dedication, hard work and a shitload of time to make good.
On the 5 closers, maybe it means that the founders get all the glory and maybe it’s time to start recognizing the operators too.
“The quick pivots, the exhausting product/engineering sprints, the rapid fire innovation, the missionary zeal, etc work so well in the early days but they get old quickly and they don’t scale. At some point calm, rational, supportive, and highly communicative management skills are required. And learning those on the job is hard. As Mike points out in his post, it is a bit easier to learn those skills from watching someone else who is really good at doing that. And that is why Mike argues that founders should pay their dues working in someone else’s company before starting their own.”I call this the difference between trail blazers and road pavers. Some people are well suited to be hacking their way through the jungle, blazing a new trail. Others are better at following that lead and actually creating a real road. Both are essential, but both are very different. The balance is more difficult in real life as its hard to have the trail blazers stop their activity and move on. I have not yet seen this transition go well, and the relationship between the two groups is always strained. Maybe finding the balance between the two is the keyAlso – Its the early team that gets remembered as pointed out in your update.
Love the baseball analogy, here are some I like from the world of sports:- Need to have experience throwing the ball under pressure (determination)- Need to have the right players, in the right positions, at the right time (team)- Need to score more runs (revenue/sales are the key)- Need to play defense (cost control)- Go to where the puck is headed (vision)- Keep to the game plan (core values)- If you bat 300, you failed 70% of the time and made it to the hall of fame (perspective)
Founders love to start companies full of energy and passion, it buys them time to figure stuff out before there’s pressure to finish them with a successful exit. Anyone can start a company, but few end up with a successful company.Great post as always Fred, your comparison is fine by me, most companies will require multiple leaders as they evolve and require different skill sets over time.
I think the pitching construct is backward in this case. I love Mike’s quote that “finishing” is as hard as ever while “starting” has gotten easier. But the words don’t make sense when you think about it — starting is the 1st and maybe 2nd inning, and finishing is the rest.Relief pitching (and the reason there are only 5 of them at Cooperstown) is a highly specialized job, and the end of a tight game is an unusual circumstance, different from the meat of the game. Startups are the opposite. The starting is what’s highly specialized and does will with “founder mojo,” different from the meat of the game, which is building and scaling the business for the long haul.
There is a systematic approach to organizational performance excellence that enables continued growth. I’ve been working on a structured program for companies that reach the build-out stage to create a Management Advantage, integrating the elements needed to have their businesses outperform in their market. [That’s the problem with teaching management: a zillion distinctions, most of them valid, but no integrating model to make it work… and that’s all management is — making organizations work.] Happy to elaborate if some find it useful. Why not have an incubator-like program for companies that reach that stage of maturity?
Hi Fred,Great post. There is a belief currently that founders “should” go from start to exit. However, wouldn’t you say the skillsets required are very different. Isn’t this why a lot of founders struggle, because they are strong in a different skill set?
Great point about the closers. I often wonder if there will come I day that I bring in a closer. I definitely see it as a possibility. My company is similar to Clif Bar and I know Gary Erickson (founder) eventually brought on another CEO. Closers seem to be fairly common in the business world.
Fred, doesn’t the typical basic structure of startup finance (where a startup raises equity capital from venture investors) often create a tough conundrum for founders?To wit, unless founders get 100% vested equity on day one (which is not unheard of but is unusual), then if they leave the company before the “exit,” or stay but just leave their top top management positions, their ownership is either1) immediately damaged because they stop vesting and also suddenly have to come up with the cash to exercise vested options, or2) put at massive risk of being damaged by later financings, dilution, recapitalizations, issuance of other classes of shares, dividends etc etc etc etc.So there is a strong incentive to hang on…?
Great post Fred! I wrote a response on my blog. I think too many people focus on the starting and not enough on the finishing. There are no short cuts: http://theamericanceo.com/2…
Baseball metaphor still works. Closers are a relatively newer breed. Organizations realized this emerging skill was important and needed. Closers have the same goal but a slightly different skills set. That is also why they call it a “team”.