Founder Led Businesses

I’ve written about this issue a number of times on AVC. There are some advantages to having a non-founder run the business, but over the long run it seems that founder led businesses are the best businesses.

This rant about Apple by Bob Lefsetz is a fun read and regular readers will know that I am mostly in Bob’s camp on this issue.

The ending is great.

There’s a fiction that corporations rule in America.

The truth is it’s all about individuals. Sure, a group can effectuate the vision, but it always comes from one person, maybe a team of two, certainly not a committee.

Jeff Bezos is Amazon.

Mark Zuckerberg is Facebook.

Larry and Sergey are Google.

Daniel Ek is Spotify

Evan Spiegel is Snapchat.

Who is Apple?


Comments (Archived):

  1. andyswan

    Corporations are people

    1. Mario Cantin

      That’s a manufacture — a by-product of the legal profession. It’s fiction.

      1. andyswan

        It’s the essence of this post and it’s also what I think of every time I think if the companies I lead, advise, and do business with._____________________________

      2. Kirsten Lambertsen

        It’s THE problem.

    2. Anne Libby

      Andy, I hope everything at home is going as well as can be expected. Or better than expected!

      1. andyswan

        Day 4 post surgery. Healing looks good…pathology today!

        1. Anne Libby


        2. Donna Brewington White

          Waiting eagerly to hear.

        3. creative group

          Beautiful family and progress. We extend well wishes to that amazing and strong woman. You are the other hand are stillperplexing.

          1. andyswan

            Haha thank you.Btw I am exceptionally simple. I do not initiate force on others, and I reject any policy where others to do that on my behalf or to me. I am a lover and defender of liberty.

    3. Kirsten Lambertsen

      Ha! I see what you did there 🙂

    4. Donna Brewington White


    5. creative group

      The CITIZENS UNITED decision has been one of the worst SCOTUS decisions in a longtime that has effected this entire country negatively.

      1. andyswan

        Sounds like the country would embrace a constitutional amendment that makes it moot.  Go for it.  I happen to think the ruling was fantastic. Why should Murdoch have free speech via Fox and my company doesn’t?

        1. creative group

          Being brilliant only works when all the sensory tools are used.”that has effected this entire country negatively.”

  2. Laurent Boncenne

    I haven’t read the linked article yet, but to me current Apple is lead by Ive & Cook not that they’ve put out impressive things as of late.Interestingly enough, Nadella is Microsoft, even though he’s not the founder and as much as Ballmer didn’t make the greatest decisions sometimes, he also was Microsoft during his tenure.Companies that outgrow their founders and last for more than a few decades need to have this sort of empowerment from the #1 not to survive but to thrive and prosper, much like companies started in the early 20th century and late 19th have had their vision and goals championed by the man at the top which allowed them to still exist until now.

  3. awaldstein

    I believe this completely. I don’t believe in co-CEOs for just that reason.For a personal investment from pooled money I intentionally gave the person with the heart of the company in their DNA the voting advantage. .Some one person needs to lead.

    1. JLM

      .Partnerships between unequal partners still require a single leader to make the underlying company function correctly.One of the most important elements of effective leadership is assessing progress v plan at every level.We do not get what we expect, we get what we inspect.Leaders inspect constantly to ensure compliance and alignment with the plan.JLMwww.themusingsofthebigredca…

      1. Rick

        “Leaders inspect constantly”.The word inspect causes me to think the leader takes the initiative to go find out but I’m not sure what you are meaning. I would prefer the leader requires the team to report back instead. That way the team members review the results of their work. Then they can, if possible, fix any mistakes they find..Some leaders use the micro-manage approach and watch over the team member’s shoulder. That is good for a short period of time for newbies but the ultimate goal is for the team to work without constant supervision..Let me know if you disagree JLM.

  4. Pranay Srinivasan

    For all the calculations surrounding Pre-Money, Post-Money, Dilution, Convertible Notes, Traction, Seed, Prod Mkt Fit, etc etc, in the end I feel that it is the VC’s ability to bet on a founder that pays off.Often rejections of the business end up being absolutely misguided especially when the VC finds the founder exceptional.So too with the public, with the media and with employees. We all are looking for a Messiah.Someone who can tell a story. Someone who has a clear vision. Someone who can shepherd us through uncertainty when we’re unsure of where the company is headed.Most important, we need Someone who can take that decision – to fire that person, to launch that product that isn’t 100% ready, to make that policy change that could be controversial, and to be the guy who takes the fall.Thanks,Pranay

  5. Guest1

    Seems passioned to me…?

  6. Humberto

    There are 2 arguments: one is about corporations and one about products.I agree corporations are people, this is spot on. To the best of the public knowledge, Apple is now trying a duet Ive + Cook. But using other companies as arguments applies only to some extent. Google is the least focused of all companies in the world, and they’re having a blast! Designing eyeware (failed), a thousand different robotics projects, ballons.. that hasn’t stopped its success. what is the point then? that Apple needs to focus where others don’t just because it once had Jobs?The rest, about failures, I think is extremely short-slighted. Yes, the Apple Watch comes in three versions that I personally don’t really see a purpose for in a quick-obscolescence IT world. But framing it as a failure is not smart. It sold millions. The learning curve is fast. Two features alone can be absolute killer apps: Super mobile Payments and the Simplification of Lifestyle (calendar + running + health + quick replies). Nobody is doing any of those properly, so maybe its a nice market.. The apple watch (and apple music) is v1. Battery will improve, so will the services.I think he’ll be proved wrong.

  7. LIAD

    “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” ― George Bernard ShawBy their very essence impossible for committees to approve/action unreasonable behaviour.If committee sees things as unreasonable – can’t action it.If committee see things as reasonable – will be actioned but provide limited bang.Once each committee member softens an idea edge with their worldview you’re left with jello. And jello never changed jack.- Preferred form of leadership is always benevolent dictator.

    1. PhilipSugar

      100% correct. The key is not becoming too unreasonable (its really easy to do after being rewarded for being unreasonable for a long period of time)

    2. falicon

      Agree on your points…except that I think Jell-O did at least change the small town of LeRoy, NY (… ) 🙂

    3. Rob Larson

      Sure, benevolent dictator gets you efficiency, execution speed. And it leads to the company’s strengths/weaknesses to matching the leader’s. if your dictator is a visionary genius with excellent execution skills, then this is a recipe for a startup moving faster/smarter/better and often winning the day. Often such types are founders, hence the wide-spread fascination with founder-led companies.However it is a big mistake to think this is always the best way to organize your company.One major weakness with the above top-down structure is that it relies HEAVILY on the benevolent dictator for innovative vision. Hence the need for them to be a true visionary genius.In industries where innovation is less important (a shrinking pool), this is less of an issue, and a top-down leadership approach is the way to go.In contrast, bottom-up management approaches sacrifice efficiency/speed but in return you get a stream of innovative ideas, typically bubbling up in unexpected, unplanned ways.Some companies take the extreme approach to this, for example W.L Gore, Morning Star, Semco, Valve software, where there are no bosses, and leadership evolves organically, project to project. Others take less extreme approaches, such as Google with their 20% time allocation. Either way, all such companies gain innovation though unplanned, un-managed, bottom-up efforts. The number of companies that do this is limited because this is a recent management philosophy that goes against human intuition.Which structure you should employ in your company depends on your strengths/weaknesses as a leader and whether you want to prioritize executing quickly on a strategic vision vs. laying the groundwork for long-term incremental sustained innovation.No right or wrong answer for everyone, though top-down leadership with a visionary genius (who also executes like mad) seems to be a better fit for the VC funding model, if you have the luxury of being led by such an individual.

      1. PhilipSugar

        Some companies take the extreme approach to this, for example W.L GoreThis is complete bullshit. Have you ever worked there??? I’ll answer my question. NO!Don’t believe what you read.

        1. Rob Larson

          I have not worked there, but I have spoken to several people that do, in both Delaware and Arizona. Their comments were that it’s “not for everyone”, but that if you are a self-starter who doesn’t need structure to thrive, it can be a very satisfying place to work and pursue your innovative ideas. Perhaps you have worked there and had a different experience. You seem to have strong feelings about them. I am not suggesting they don’t get some things wrong, but that the more interesting question is, “why are they still around, and growing, (while making ‘best places to work’ lists and ‘most innovative company’ lists), and how do they continue to come up with successful product after product, when according to classical management theory their structure should have put them out of business decades ago?”Regardless, (1) it’s only one data point. There are many others–companies that are thriving despite what would seem to be a completely backwards organizational structure. Not just backwards, but backwards to the point of “should kill the patient”. But somehow it doesn’t.(2) I’m not suggesting this model should be followed by all, or even most. (in fact for most I think that this extreme boss-less approach would be a mistake.) But again, the amazing thing is that it EVER works, at ALL.(3) More importantly, everyone SHOULD seek to understand why/how bottom-up management works, and figure out if the help with innovation is worth the trade-offs that come with incorporating bottom-up principles to one degree or another. Google decided the answer was “yes”, and found a structure that worked for them. Google is NOT a benevolent dictatorship in the mold of Steve Jobs and Elon Musk.If you’re an Elon Musk, you should disregard this completely–just do your thing and never look back. The rest of us should try to understand other management models to see if there are elements we can/should incorporate.

          1. PhilipSugar

            Never worked for them, only myself. Know hundreds of people that have.Ask about the HUGE layoffs in the late 1990’s

          2. Rob Larson

            I concede that the company has made mistakes over its history. And you might be justified in your dislike for them. But I think it’s a mistake to let that cloud the question of where on the spectrum of “bottom-up management vs. benevolent dictatorship” one should be. I believe that the evidence is increasingly suggesting that in many (not all) cases there are better options available than benevolent dictatorship. i.e. to swing the pendulum back a little towards bottom-up management.

          3. PhilipSugar

            I think I was too harsh in my comments.Sorry.Here is the thing, it really bothers me when companies say one thing but it isn’t really true.

          4. Rob Larson

            Thank you, I appreciate it.

      2. PhilipSugar

        BTW look up Bill and Vieve Gore and see what every plant they have road is named after. If you could give a better example of a benevolent dictator I could not find one. Ever look at the succession plan and the family tree?????? Wow, just wow, I never go off but this is a dumb comment.

        1. Rob Larson

          I’m not sure that their plant names shed any useful light on the adv/disadv of a bottom-up management model.You are right that their last succession was messy. And again, I’m not saying they didn’t get some things wrong. But the key question is “why are they still thriving in-spite of it?”There is a tool in physics best described as “look to the extremes” which is useful when trying to understand counter-intuitive things. For example, if you think that bottom-up management as a general principle is a mistake, then look for extreme examples of it, and if you are right you would expect those companies to all fail. If instead you find examples of extreme bottom-up management that are thriving/growing, and continuing to do so decade after decade, then that is a sign your hypothesis is likely wrong, or at least incomplete. This is why I brought up these extreme examples.

  8. John Frankel

    The argument is that businesses cannot survive founders?

    1. Anne Libby

      Maybe not in their same form.In the early 90s, Walmart leaders were extremely proud of their employee stock purchase plan — and how much their lowest paid associates could earn through participation in the program.This was shortly enough after Sam Walton’s death that their employee stock purchase plan might have had his own fingerprints on it. Everyone prospered together. I wonder whether he’d recognize his own company today.

  9. John Pepper

    Writing as I think…. Apple is Steve Jobs. Microsoft is Bill Gates. Starbucks is Howard Schultz. Southwest is Herb Kelleher. Virgin is Richard Branson. Uber is Travis. Tesla is Elon. McDonalds is Ray Kroc. Walmart is Sam Walton. Apple is Steve Jobs.Dead or alive, current CEO or past, it feels to me as though the most visionary and impactful leaders are the founders whose beliefs (good or bad) carry on without them. Who provided a philosophical play book that allows others to carry on without them. We have to give others a chance to fail just as the founders failed themselves. Who knows what becomes of the Apple Watch? But then again Apple had some pretty big flops after Jobs return as well.Apple is and will always be Steve Jobs. Cook and everyone else are likely grateful for that…

    1. Donna Brewington White

      The “visionary” part seems to be what lives on, but not unless that vision is inspirationally, clearly and vigorously conveyed, and also instilled. I can appreciate that you not only used the word visionary but “impactful” as well. Vision without impact can be benign. This makes me think about how I go about building my “small” business.In terms of allowing other leaders to fail, it seems that some of those early failures should limit the number and types of failures that come later. Right? Or is failure the price of continuing to innovate?

  10. AndyGCook

    Interesting thought line here and I mostly agree with it.In your opinion Fred, what is the best path forward for a company when the founder wants to move on or is no longer able to lead due to health reasons? Do you let darwinism prevail by having everyone left vie for power and eventually someone rises to the top to take over? Or do you hand pick a mentee and instill your values on her over years so you can eventually step down?

    1. fredwilson

      i like the latter approach best

      1. Pranay Srinivasan

        Regardless of health issues, isnt it always important to see the next line of leadership and make sure your company is covered for any eventualities?

      2. Matt A. Myers

        You don’t enjoy a fight to the death?..

    2. William Mougayar

      Google “succession planning” and you’ll learn about it. It’s your last line, but done with a process and it takes time.

    3. JLM

      .I have read constantly that something like 80% of VC funded enterprises change their CEOs in the first 4 years.By personal experience advising startups, many TechStars and other accelerator/incubator grads, I can vouch for the reality that companies often change CEOs en route to their success.JLMwww.themusingsofthebigredca…

      1. Twain Twain

        Accelerators/incubators favor teams with strong engineering skills. However, that doesn’t necessarily translate later into those founders being able to work out what their business model and strategy is as CEOs — either because they don’t have an MBA or didn’t pick up those core business skills because they were too busy learning and practicing code.

        1. JLM

          .I agree with you in a general context but one of the things a good accelerator operation accomplishes is to force this issue.JLMwww.themusingsofthebigredca…

  11. William Mougayar

    It’s more complicated than a simple Yes/No answer, and of course anyone wants to gun for the Apple Watch, equating its flaws to the absence of Steve Jobs.Well, maybe Steve Jobs did have a say in the Watch’s origins. And how about the iCloud (and MobileMe which was cited) which was also poor product during Steve’s time. And most of the iPhone’s stock Apps were always sub-par to others, for no particular reason.The question at the end “Who is Apple, or who is Company X” is more about whether the company has had good succession planning to the point where the old leader fades away, the new leader that replaces them is a familiar face that works at a familiar tune, and continues a legacy seamlessly. Yes, it’s possible and it’s been done by Jeff Immelt who replaced Jack Welch seamlessly, and is now GE. It was done when John Young replaced Bill Hewlett, and then he was replaced by Lew Platt. It was done well at Cognizant, and at other companies who didn’t lose their souls when they lost an original leader.But it’s possible there is a “Leader’s Dilemma” here, when a strong charismatic founding leader doesn’t prioritize nurturing and grooming their successor in the public eye, so they are ready when the time comes, instead of getting a surprise replacement that isn’t well tuned or perceived with the company or the markets. If they did, maybe their strong personalities wouldn’t be as strongly imprinted with someone else in their close shadow.This dilemma could happen to Amazon, to Google, to Oracle and others where the founding CEO is the main figure with no one behind them. And it has happened to Reddit, Twitter and others. It’s too early to box Snapchat and younger startups because their CEOs need to become legends before they are to be replaced.Bob Lefsetz is an American music industry analyst and critic, so he’s going to criticize. That’s his job. And he’s extrapolating from the Apple music product & people, and overreaching to conclusions.I think the issue is about proper succession planning. Some companies take it and do it seriously. Others don’t.

  12. Terry J Leach

    Iconic founders are feedback loops for the business without the founder the business can become rutterless if feedback loops are not instilled throughout the business.Apple has very technical managers who know numbers, but now are missing the quality aspects that comes vision.

  13. creative group

    Would Reddit be considered Steve Huffman who just returned after Ellen Pao resigned? Or is Reddit the community that makes this BB.

    1. Anne Libby

      This is such an interesting question — businesses built on communities of people (who supply content) are a different animal. It remains to be seen whether they’re easily sustainable, financially and otherwise. FB looks like the textbook case for what works?

  14. Phil Chacko

    It’s dangerous as a leader to put too much emphasis on individuals. Great individuals are necessary but not sufficient. All of these great companies have great founders AND great teams. Even Lebron can’t bring the Cavs a championship on his own.Are there examples of companies defined by great teams, but not great founders? Perhaps Paypal, because no single member of the mafia was dominant? Or for counterexamples, great founders without great teams? Steve Jobs at NeXT?

    1. JLM

      .One of the first jobs of a to-be-successful leader is to fill out the team with people who will drive the attainment of his vision for the company.A good CEO is always hiring and hiring in an talent pool and cultural sense that will make the company stronger by applying talent leverage.Good CEOs know to hire the best people possible and to be constantly recruiting.JLMwww.themusingsofthebigredca…

      1. Phil Chacko

        If recruiting is one of a good CEO’s most important functions, doesn’t it make it hard to distinguish between a good individual and a good team?

        1. JLM

          .The CEO is hiring for the right positions on the team.He doesn’t indiscriminately hire a bunch of people for the same position.He hires for the team voids and opportunities to strengthen the collective performance of the team.He hires for the future.JLMwww.themusingsofthebigredca…

    2. pointsnfigures

      depends on if your corporate culture is designed for brokerage or closure. Apple’s has always been designed for closure. It’s a cult. You drank Kool-Aid to get in the cult and there was a right of passage. People that were inside and fought were dismissed, and disrespected. Contrast that to a company like Goldman.

  15. JLM

    .One of the fundamental requirements for any effective leader is a plan of succession, a continuity plan. In the military — where units take on the personality and standards of their leaders like a cloak — it is part of the ethos from day one. It is organizationally embraced by appointing commanders and executive officers wherein the XO is the successor of the CO, in the event the CO is killed or wounded.The call, “The CO got hit, you’re it, sir.” has been heard by a lot of young officers at very inopportune times. The military trains to that standard at every level.In business, it should be the responsibility of a good CEO and a watchful board to ensure that companies have an agreed upon plan of succession and that it is trained into the organization.I lived through such an experience when I was the co-founder and CEO of a company that had assets that were a big fraction of a billion dollars and 4-600 employees with multi-unit operations.I got hepatitis A and was down for 18 months.We had just come back from a company retreat in Jamaica wherein the issue of succession had been briefed and trained at the organic level. The change was immediate. One of the co-founders became the CEO while I turned yellow and slept most days.It worked like a champ.I would love to believe that when I returned, I jacked things up 5-10% but maybe not. Maybe not.I do know that it was a lot of comfort to me to have that plan in place and more comfort to our investors.If you have a clear Vision, Mission, Strategy, Tactics, Objectives, Values, Culture, dollar weighted org chart and succession plan — things can run themselves for a while.JLMwww.themusingsofthebigredca…

    1. Matt A. Myers

      I’m hoping to bring on someone within the next month or so that I can “transfer” as best as possible all of that – “clear Vision, Mission, Strategy, Tactics, Objectives, Values, Culture, dollar weighted org chart” – to a business operations person who can move things forward even when/if I’m down. I feel it’ll be a good exercise as well.

      1. JLM

        .Putting Vision, Mission, Strategy, Tactics, Objectives, Values, Culture, dollar weighted org chart, business engine canvas and succession plan in writing is as much for the CEO as it is for the company.This results in the “power of alignment” which allows the CEO to drive things along a path that is aligned with these plans and not to endure “friction loss” while trying to get things in alignment.One caution — you can never, ever delegate Vision, one half of Mission and Values. The rest of the stuff you can even have others author as long as you have the final approval and it carries your imprimatur.If you get stuck, let me know. I have done this more than a few times.JLMwww.themusingsofthebigredca…

        1. Twain Twain

          IMPRIMATUR.Exactly this. The strongest startups have their founder DNA all over them, long after the founder is no longer around (either because of death or retirement).

          1. JLM

            .Done correctly, it is in the cultural DNA of the operation.JLMwww.themusingsofthebigredca…

          2. Twain Twain

            Exactly, culture and operational DNA.Some founders think it’s enough to “have great ideas” and be able to code.It takes leadership to systematically foster culture and operational DNA so that it becomes second nature and natural discipline to the company.Then EVERYTHING SYNCHS & EXECUTES SEAMLESSLY.The way it did when Steve Jobs was at Apple.Never under-value the maestro conductors who make the symphonies of their companies more compelling than their competitors.Equally, never under-value the brilliant musicians either.

          3. Donna Brewington White

            I have learned to never ever underestimate the importance of leadership.

          4. Twain Twain

            I’ve been learning about leadership ever since I was a little girl and I continue to learn.In high school, there were some girls who thought they should be Captain of sports instead of me because they were taller, fitter, more aggressive.The thing about leadership is that you are first and foremost the most trusted, responsible and selfless team player. That’s how Captains of Sport are chosen.

          5. Matt A. Myers

            The level and scope of success will depend on the leadership – most importantly who becomes willing to follow.

          6. DJL

            “An Institution Is The Lengthened Shadow Of One Man”Emerson

          7. Matt A. Myers

            That sounds a bit dirty..

        2. LE

          Of course none of this highfalutin talk means anything at all w/o the low hanging fruit of being involved in the right opportunity at the right time and riding that horse correctly. I think that is sometimes lost in the discussions at AVC and even in the business press. Where nuances of financing or team building or term sheets are discussed ad infinitum. You can be the best jockey in the world or the best athlete in a game but if you are on the wrong team at the wrong time none of this matters at all and it won’t get you anywhere.That is part of the problem with all of this hero worship. It doesn’t take into account at all that the hero is leading the right army at the right time (after the fact discovery of course) or otherwise he would most likely be ignored like any other schmuck.

          1. JLM

            .WTF are you doing? Letting reality creep in? You’re no fun.One observation that is not in contravention to what you say — it is incredible the number of perfectly “ordinary” men/women rise to the occasion in extraordinary circumstances.This is also something that CEOs have to learn — to challenge their people to grow into bigger and bigger jobs by throwing them into the deep end and seeing who can actually swim.JLMwww.themusingsofthebigredca…

          2. LE

            That “rise to the occasion” thing is something that I experienced firsthand in the 80’s with a guy that worked for me (jewish kid, good family as it was) that had burned his brain out on drugs (not a jewish thing typically ymmv). He was what we considered “stupid” and the drugs had really changed both his affect and his capabilities. Well one day we bought this brand new computerized paper cutter (which was a big deal back then) and since he was in the bindery he had to be trained on using it. Very cryptic no gui, enter commands etc.And low and behold he was so excited about this new machine that he had no problem programming and it really amazed me to no end. So I learned from that situation exactly what you are saying. I called it something like “people become incredibly smart when they have to”. You see this many times like the three year old that escapes captivity and wanders for 10 miles or something like that. And people are amazed as if the child is more special than any other kid in the same situation.One of the reasons I told my wife that I wanted the kids to get up in the morning and go off to school by themselves w/o my involvement. They will figure it out because they have to. And they did (11 and 9 when this started) pull it off and made it to school ok making breakfast without me nagging them. And if the kid missed the bus I would make him wait until I was ready to leave not rushing at all. Was his problem, not my problem and he learned from that.I have been known to play and manipulate to no end. Had a high school girl once that I gave the task of setting up a new cheap phone system. Not something that you would ever expect a chick like that to do (“chick” – that’s a test to see if any women are reading my comment btw.) So after “chick” completes a small part of the task I go nuts telling her (in a genuine way that only a con man could pull off) how well she did. Well right after that she easily and I mean easily completed the rest of the task because she was so excited and motivated by praise. So yes I buy into all of the highfalutin leadership stuff (and especially the perspective which you give when you coach) 100%. [1][1] Why? Because what junior really wants is for Daddy to tell him everything is going to be ok and not to worry (same with doctors and patients..)

          3. CJ

            I think it’s both. The right leader can make edge case opportunities turn into the ‘right’ opportunity.

    2. Anne Libby

      If you have a clear Vision, Mission, Strategy, Tactics, Objectives, Values, Culture, dollar weighted org chart and succession plan — things can run themselves for a while. Training/mentoring are other key values that you need to put some muscle behind.

      1. JLM

        .Good point. In my CEO coaching efforts, I have seen CEOs blossom and their organizations reflect their increased effectiveness and confidence.The big secret? There is no secret.Many CEOs have greatness bottled up inside of them and need someone to let it loose and to confirm for them that being uncomfortable is the right feeling at those times.I cannot tell you the number of times I have said to a CEO, complaining of a feeling of discomfort at some initiative or awkward moment, “That feeling? Normal, sorry.” Just that is enough for a CEO to know it is going to be OK.The big thing about a CEO coach that I see time and time again, is the ability to work only with the CEO and not to get fouled in a fiduciary duty to other board members or shareholders.CEOs all benefit from an honest broker — particularly someone who has been a CEO — to get the goodness inside them out. Having been a CEO for 33 years, I can tell people how it is supposed to feel when it doesn’t quite feel right. Bad news — it’s supposed to feel that way.JLMwww.themusingsofthebigredca…

    3. William Mougayar

      yup, i said the same thing that it’s about proper succession planning. (see my comment)

    4. JamesHRH

      You know JLM, this discussion is chocolate and vanilla ice cream.Fred is talking chocolate – facd of the franchise leadership.You are talking professional leadership – vanilla ice cream.Is Jeff Immelt GE? IS Alan Mulally Ford? Haven’t checked on how well Immelt has done, but Mulally is getting it done for Ford, while just being a pro.Professional governance tends to favour professional managers who are not always the answer, especially on game breaking product innovation. Pros tend to be operations wizards and pro governance tends towards valuing consistency over insight. Mulally wins a lot of his points on great financial market preparation and solid – but not revolutionary – products (not even a hint of an electric from Ford at this point).I have said before Drew Houston is the new Apple but they are actually starting to make inroads into services without a ‘face of the franchise.’

      1. JLM

        .I think you are talking about the style of leadership.Here is a good post on Washington’s leadership style, among other things.http://themusingsofthebigre…In the end, CEOs do not receive power — they have to take it.Some CEOs must be the face of the company and some seek not to be identified in that manner. It is partly style.JLMwww.themusingsofthebigredca…

        1. Twain Twain

          “In the end, CEOs do not receive power — they have to take it.”Funnily enough, stepping up to the plate and swinging the bat is a way of showing leadership.

          1. Matt A. Myers

            Picking up the bat is a pretty good signal too.

        2. JamesHRH

          I will bow to your superior depth of experience.

          1. JLM

            .Depth of experience? Depth of bullshit?Sort of the same thing.JLMwww.themusingsofthebigredca…

          2. JamesHRH

            Well, I can generate the latter with or without the former but I can not generate the former with or without the latter.I think.

        3. CJ

          In the end, CEOs do not receive power — they have to take it.Killing it, JLM. Awesome point.

    5. Rick

      Yep! It’s about delegating tasks. That’s what I’ve said before about Phat vs Lean. The CEO should be all about teaching his team to run this particular business. Think of it like creating software. The CEO is writing algorithms that the team will run without the CEO being there..Gotta’ go! I think Fred noticed me.

    6. Richard

      The DNA of a company will have new meaning in the lifetime of many founders today.Computers programmed with the gene sequences found in the founders DNA, which use machine learning throughout the lifetime of the founder to learn how the DNA makes decisions…..

      1. Twain Twain

        Ah, Rich, you have no idea how interested I am in the whole space of genetic programming for Machine Intelligence such that it can factor in how human decision-makers (like founders) really make sense of the signals from the noise so they make effective and efficient decisions!

        1. Richard

          We live in a the time of the GWAS and correlating it with phenotypes. What if we could study the phenotype over time?

          1. Twain Twain

            Exactly! Imagine being able to pinpoint when the founder/CEO makes the toughest decisions that then affect the valuation. On top of this, imagine being able to track the market reaction that then triggers another decision behavior.As a starting example, we could compare the CEO transitions at Reddit and Twitter.

    7. Joe Cardillo

      To your point about how it goes while you’re gone – IMHO after a certain growth level (earlier than most people think) the CEO’s product is the people. If it falls down while s/he is gone, then they didn’t understand their business.

      1. JLM

        .A good CEO is planning on his succession from the instant he arrives or has enough of a team to be concerned about it. A board should insist on nothing less. It should be memorialized in the CEO’s Employment Agreement.In the military, when you take over a company (2-300 men) you immediately meet with the Executive Officer (the number two and the CO’s successor) and get an assessment of the platoon leaders, the First Sergeant and the senior NCOs.First day, first hour.You are also taking measure of your XO and seeing if he is up to the task.I remember being an XO and having a new CO come in who had been a company commander before and was a very salty, seasoned commander. I had a complete packet for him. He read through it and we chatted. In less than an hour, that guy was “in charge.”I got the company when he was RIFed at the end of the Viet Nam War when the Army contracted severely. I was ready to be a company commander because he had taught me and kept me in the loop on everything.In business, boards should insist on a continuity plan and the plan for continuity should be written into Employment Agreements and Basis of Employment documents.It is not something that a startup will spend much time on but if a company has more than 25 employees, it is time to make it happen.JLMwww.themusingsofthebigredca…

    8. sigmaalgebra

      Two easier solutions:(1) If go to Jamaica, then bring all own food and water, lots of soap, mosquito repellant, and bug spray, wear plastic gloves, and don’t touch face.(2) Don’t go to Jamaica or anywhere south of the US.I’d prefer solution (2)!

  16. Matt A. Myers

    I’d take Apple on though I haven’t proven myself yet – odds are I’ll never get to that point; I certainly could use their resources to continue to change the world in the big way that they have been leading. Dreamers can be dreamers; hate if you want to hate – there’s lots of shit in the world to hate. I woke up (or did I sleep?) on the bad side of bed today.I’ve thought so far ahead, the challenge for me now is understanding the core pieces to helping me get there as efficiently as possible. The best decision I have made so far, there really as no choice and the universe put her there – was bringing on Anastasia full time. The next best decision I will make is bringing on someone for business operations – to keep the business focused, and in part keep me more focused.I’m reminded of a conversation I had with @falicon:disqus when I was visiting NYC. He mentioned how I seem to architect myself, to do activities that will lead to me being a certain way. I’m now realizing I’m needing to structure the environment around me, as for me it is equally influential to my own motivation and drives – and the more I can depend or lean or trust there are the external supports keeping me “on task” then I can just let my energies flow where they go best.Let’s see if I can pull off this next stage. Feels like I’m walking on a tight rope – learning to balance as I go forward.

  17. Twain Twain

    Timely because this weekend I read an article on Linkedin from a British “leadership coach” about how there are no more “Heroic CEOs” in the same mould as the mid-C20th ones (I’m guessing he means Gordon Moore, Jack Welch et al) and how leadership is now about “beta types”.So I made this comment: “Interestingly, Facebook, Google and other techcos have the same share class structure as Newscorp. So maybe that tells us whether the old “Alpha” forms of leadership really are as obsolete as we initially see.”I also met with a European founder who tried to make the case that it doesn’t matter his team hadn’t identified who’s doing the CEO role and that it’s okay everyone has the same equity. To say I disagreed with him would be an understatement.THERE HAS TO BE A LEADER/CEO just as every sports team needs to have a CAPTAIN & CENTER/MIDFIELDER (playmaker) who strategizes, supports and drives the flow of the ball towards goal!!!Yes, the team certainly should be empowered with autonomy and trained to contribute their part to scoring those successes but THERE HAS TO BE A LEADER.

  18. kirklove

    A) I love Bob. He’s such a great, acerbic writer. Almost as good as angry Fred. He’s also done a great job adapting, moving from writing about music, to covering tech as well now.B) How does Twitter fit into this? It was kind of a 3 (or 4 how you want to recall it) headed monster, then Dick gets a boatload of credit for making it a “business” man as Jay Z would say.

  19. LE

    Ad hominem time. Oh sure, that guy Lefetz. I think I took issue with him before over something that he said that you wrote about. Don’t remember what that was because there is no easy way to search or list disqus comments. Or even an index type list.Anyway, Lefetz is describe (in a wired article) as:…Lefsetz is the author of the Lefsetz Letter, an online record-biz op-ed that mixes analysis, rants, boomer-rock reveries, and the odd bit of futurism. Like most music bloggers, Lefsetz posts frequently and verbosely; unlike most music bloggers, he has actually gained the interest of the music industry, so much so that even Lefsetz’s most casually tossed-off missives get noticed. Summary: Blowhard who writes in a way that gets him attention. Mostly fiction opinion. Note that I am giving him attention right here.I think Lefetz is mesmerized (like the character Cameron Crowe played (himself..) in “Almost Famous”) as a result of Lefetz’s focus and involvement in the music industry so he leans towards that analogy because the way his brain is trained perhaps.Maybe he is confusing a rock band, with perhaps 2 to 5 members, where “Glen Frey|Don Henley” [2] leads the Eagles and w/o either they would suck” with a corporation with thousands of participants whose effort and contribution is masked by the ego and, most importantly, the PR benefit (and this is important don’t ignore it) of having a figurehead who is presented as some kind of a star. (And they very well might be but don’t think for a second that that star isn’t relying on a team, right?) [1]Besides, what exactly the fuck do Larry and Sergey do? They are the google guys and everybody knows who they are but are they really that involved in day to day of the cash machine? Don’t even consider them in the same category as Bezos or Zuckerberg they seem to be on a pretty short leash the way I see it.certainly not a committeeThe committee does not set the vision however how could anyone believe that someone who is running a large corporation has anywhere near the time to be on top of everything and not rely on information known and passed through by a large number of people who work for that corporation? So in that sense, just like someone running the US, anyone with a good team behind them and who comes across well could fit that role, right? If that weren’t the case how could people with no experience running this country even come close to running this country? Wouldn’t make any sense. Must be the people who support them, right?I do buy into the fact that it’s important to have a star at the helm because it helps focus everyone and quite frankly people like that kind of shit they want to believe in miracle workers it’s one of the reasons we elect shitty politicians. As a strategy though it also has drawbacks it means that people will wonder what happens if and when that star leaves, dies or decides to stop leading “for personal reasons”. Warren is trying to make sure everyone buys into the plan b and has been for years.[1] USV would be perceived as the work of Fred Wilson who is the figurehead and most noticeable member. But we don’t really know what contributions Albert, Brad, John or Andy and even Nick play and in what ways they help said figurehead. (And that is a small rock band, not a corporation for that matter..)[2] Note the regex in use here.

  20. Matt Zagaja

    Definitely Tim and Jony. Should note that there are no publicly released numbers on the Apple Watch sales, Lefsetz is merely speculating. I love my Apple Watch and was listening to the a16z podcast last night and it sounded like Sinofsky and Benedict Evans liked theirs as well.A lot of the software issues people complain about are really a single software issue (discovereyd) that has since been fixed. I haven’t experienced the issues plaguing Apple Music but did have to give up on Spotify because it runs on top of some Adobe Air thing that hangs/crashes all the time (so does Adobe Flash).

  21. DJL

    A wonderful article in Fortune this week about the “education of Brian Chesky” and AirBnb. It seems that a willingness to learn and grow can help transform great visionaries into great managers as well. I am not a big fan of bloated corporate America with interchangeable CEO’s. (For a taste of the 100% opposite, read the story on Sony in the same issue. It shows how a self-serving, back-biting management team can foster distrust and chaos in the ranks – no matter how many years of “experience” they have.)

    1. Twain Twain

      Thanks for flagging the Fortune article on Chesky.AirBnB recently closed on a $1.5 billion round at at $24 billion valuation.Yesterday Chesky published this on Medium:*…The $ billion startups all seem to share the same characteristics: determined founders who didn’t know the words “impossible” and / or “investors know best”.

  22. gglockner

    So by this logic, does this mean Ford, Boeing, Costco, Wal-Mart, GE, … are doomed? Sorry, but an iconic founder CEO is not the only way to be successful, nor is it a guarantee of success.

    1. LE

      You can ignore what Bob Lefetz says he is cherry picking examples that he knows of to support the point that he wants to make. Not even sure how much he actually knows about business and/or tech. I believe he just took that up recently? Maybe I will start to write about the music business (or sports) something that everyone else knows a great deal more about because I have watched a few documentaries recently. Bob is not a student of either business and/or tech. Bob is a good entertaining writer I will give him that. So he is good at what he does and in providing the type of controversial statements that stir the pot (which I do admire..)

      1. Matt Kruza

        Reminds me a lot of jim Collins good to great (most of those companies have sucked since…). I don’t know the proper latin for the fallacy: post hoc analysis / fallacy? something like that. we can draw all kind of crazy conclusions after the fact, most of which aren’t true. This whole comment stream is interesting in how blind most people are to the fact that you can’t just perform analysis on the “winners” without taking the larger picture into account to determine useful insights.

        1. LE

          Reminds me a lot of jim Collins good to greatHe didn’t even originate that because low and behold prior to Collins was “In search of Excellence” by Tom Peters right around the time I graduated from college.…Similar and difference criticism was heaped on that. Most importantly “excellent” is easy at a point in time but can it carry forward?

        2. TeddyBeingTeddy

          Love the Jim Collins reference. Perhaps someone should write the follow up: “Good to Great to Gone”

    2. ShanaC

      Look at Legos! They actually got their first outsider, and are finally doing better than ever

  23. conorop

    The Apple, Facebook, Google, and Amazon comparisons are fair, but the other two are rather ridiculous comparisons. Neither Snapchat nor Spotify haven taken a big enough second step to allow them to fall on their face. They’re still balancing.Also, where do we place blame for Google Wave and Google +?I understand Fred’s point though on founder vs. non-founder led. Apple is missing the ‘special sauce’ that Jobs embodied.

  24. pointsnfigures

    Prof Ron Burt from Chicago Booth did a lot of research on corporate networks. He said that when a dominant player leaves, or is ousted from a network, a void happens. Then new players rush in to fill the void. Apple is probably still in the midst of that change and perhaps their current CEO is transitional. Fred highlighted startups, and companies related to the Valley. But, you could say, Jeff Immelt is GE too.The C suite of executives have outsize impact on stock prices. (research by Steve Kaplan) Have outsize impact on culture too.

  25. ZekeV

    What about endeavors such as bitcoin, or a country like the US, where the organization is designed to function without the founders, and the founders have only weak ability to appoint a successor?

  26. Donna Brewington White


  27. justsaying

    Lot of business that did well long after the founders left. Some nearly died and bounced backOf course you could attribute it to certain individuals. Like some media guy is going to attribute Apple’s success to Cook maybe in 5-6 yrs.GM, IBM, Coke, GE, SAP, Cisco, Adobe, VMWare, …

  28. TeddyBeingTeddy

    Like Zuck, Jobs was known for stealing other people’s ideas (Xerox, etc.). Maybe he just got credit for Cook’s ideas (+ Ive’s design) and thus Apple isn’t that different without Jobs, as evidenced by the stock price, stockpile of cash, and continued lineup for new phones. Probably a more fun place to work too. Whereas the Winklevi probably couldn’t execute, Cook has proved Apple is just fine w/o Jobs.Nevertheless, I like the point of the article. Good post.

  29. mikenolan99

    I love to share this story: (from the first website google found with it… forget where I first heard it)… I’ve been in too many situations where the founder leaves and the monkeys keep doing things the same way…”They started with a cage containing five monkeys. Inside the cage, they hung a banana on a string with a set of stairs placed under it. Before long, a monkey went to the stairs and started to climb towards the banana. As soon as he started up the stairs, the psychologists sprayed all of the other monkeys with ice cold water. After a while, another monkey made an attempt to obtain the banana. As soon as his foot touched the stairs, all of the other monkeys were sprayed with ice cold water. It’s wasn’t long before all of the other monkeys would physically prevent any monkey from climbing the stairs. Now, the psychologists shut off the cold water, removed one monkey from the cage and replaced it with a new one. The new monkey saw the banana and started to climb the stairs. To his surprise and horror, all of the other monkeys attacked him. After another attempt and attack, he discovered that if he tried to climb the stairs, he would be assaulted. Next they removed another of the original five monkeys and replaced it with a new one. The newcomer went to the stairs and was attacked. The previous newcomer took part in the punishment with enthusiasm! Likewise, they replaced a third original monkey with a new one, then a fourth, then the fifth. Every time the newest monkey tried to climb the stairs, he was attacked. The monkeys had no idea why they were not permitted to climb the stairs or why they were beating any monkey that tried. After replacing all the original monkeys, none of the remaining monkeys had ever been sprayed with cold water. Nevertheless, no monkey ever again approached the stairs to try for the banana. Why not? Because as far as they know that’s the way it’s always been around here.” MM then concludes: “People sometimes do the same in the workplace. How many times have you heard “It has always been done this way. Don’t mess with what works.” Instead of challenging these assumptions, many of us, like the monkeys, simply keep reproducing what has been done before. It’s the easiest thing to do.”https://www.psychologytoday…

  30. Robert Thuston

    “An institution is but the lengthened shadow of one man” –Ralph Waldo Emerson

  31. Joe Cardillo

    I’m not an online curser yet. But eff yeah, that is good to hear.

  32. Joah Spearman

    In a lot of the comments people seem to be missing Lefsetz’s point. These founder-led businesses are still in the growth phase to some degree rather than the stability phase that companies like Ford and Boeing are in. Yes, those companies are laser-focused on growth as much as the aforementioned tech companies, but from a leadership standpoint, they are mostly being managed by executives moreso than being led from a visionary. Lefsetz was saying that Apple (the music industry too) needs visionary leadership but currently is suffering from management without vision. Tim Cook is doing a great job of managing Apple, but there are some occasions where we would have felt the visionary leadership from Jobs where it’s currently lacking.

  33. rossgarlick

    Jonny Ive is Apple

  34. Daniel Lu

    Well there’s definitely survivor bias there. By picking founder led businesses, you get hugely successful companies while they are still young and successful.I agree with the sentiment, but the bias probably skews the examples

  35. Anne Libby


  36. Chris Phenner

    If you follow where Walter Isaacson is going with his next topic after writing Steve Jobs’ biography, Isaacson is headed in the OPPOSITE direction of this post.Isaacson is focusing on teams in his next book.http://books.simonandschust…I’ve spent most of my career in digital music — and as a byproduct of that I’ve read tons of Bob Lefsetz. Then one day some reminded me that he researches nothing, he never backs up his views with data or facts and he’s unable to self-edit his work.I am grateful to AVC for alerting me to so much, but following Lefsetz on this topic — no.

  37. ShanaC

    People are mortal, companies are not, and no one says this about LEGOS.There are many people who can create visions. Sometimes you hire them. So what?

  38. ShanaC

    yay – re they doing anything preventatively?

  39. someone

    will be fun to see the macolyte antibodies circling Lefshetz…

  40. fredwilson


  41. creative group

    Fred:this thread is one of my favorite entries. The contributors elucidated on leadership and succession like we were attending a C-Suite roundtable. And the great story (AndySwan) was injectedto provide the human perspective. #LIFEMATTERS

  42. Katrina Scotto Di Carlo

    Any lady founders to add to this list? Not criticizing, I just can’t think of any 🙁

  43. george

    Lot to be said about Founder led businesses but at large, the best team wins!The rant was partially right – Steve Jobs mastered the art of operating in perfect balance, that’s to say, managing the pivotal tradeoffs between creative and practical, centering the organizations focus and vision and delivering on unmerciful customer expectations. But the article’s assertions on the current leadership team are simply ridiculous! Apple has overachieved under Tim Cook and Company and their success is not defined by price/fashion/features of a watch! The yardstick is product adoption and consumer satisfaction – Apple seams to be doing perfectly well in those key areas.Another naysayer will have to be proven wrong, again! 🙂

  44. ldouglas

    I “think” it is much simpler of a concept than most might want to make it.The “why” of the business is born within the essence of the founder’s being.Others can be inspired by it. Participate in it. Even lead it. But only the founder can live it through all the iterations of the inevitable erosion of the value proposition.The catch is that founder’s can be blind to the changing factors of their market without the right team supporting them. I think Jobs was great because he listened to everyone but trusted himself in his decisions, which seemed like he listened to no one, but was the only way to be true to his “why”.


    Awesome as usual by Bob

  46. LE

    That’s not the point he’s making, but to casually say that “corporations are people: Bezos” is an insult to the American workers stuck in the Amazon warehouse in Allentown, for instance.More or less the point that I was making in my comment. All of this is driven by the media. The media needs to have a point of focus that is either good or bad that drives a story. And people reading don’t know enough to know what happens in a company or how anyone contributes to success of the leader. (See how Ron Johnson failed after he left Apple for JC Penney as an example)Large company superstar leaders, founders, whatever, are great at being able to insulate themselves from day to day shit like that. Either because they have “never worked in a warehouse that was hot” (I have) or because they have a lack of empathy that allows them to ignore what anyone else might be experiencing. Or it is something that wouldn’t bother them personally they think. (Let them eat cake attitude).You may be surprised that in my first company I installed full A/C in the entire building including the pressroom (and it wasn’t primarily because of ink and humidity). And when I started another company I put A/C in the warehouse as well, just for comfort and just because I wouldn’t want someone to work in conditions that I wouldn’t work in. (Plus a raft of gadgets and machines that would make someone’s life easier for that matter, money permitting).

  47. andyswan

    “…Who are free to leave and pursue other interests if terms are not agreeable”_____________________________

  48. andyswan

    I had the same reaction when I read your description of a non-equity employee

  49. LE

    God I remember the joy I had the day the duct work was installed. All gleaming and exposed. That type of thing turns me on. I love anything mechanical with moving or non moving parts.A graphic artist who worked for me remarked “hmm looks like stuff I see in the Spectrum” [1] she didn’t see the beauty in the ductwork like I did. Made me feel bad. Nobody else got joy from it (which is typical..)How soon until occupancy of the new building?[1]

  50. LE

    Instead of window units have you looked into portable A/C units?Reason beinga) you can buy them used on ebay andb) you can sell them used on ebay when you are done with them.There seems to be an active market in these types of units on ebay. [1] (Caveat, something I have just thought of that may be worth looking into if you need more a/c since they are more flexible than window units..)[1] And anything that can be sold on ebay means your cost is just the delta between what you buy and what the used price is. I realize that relative to building out a facility this probably isn’t major but thought I would mention fwiw.

  51. Donna Brewington White

    Haha. The boys are back in town.