This past week, I met a very impressive founding CEO who has been able to grow his company through several plateaus and has avoided some pitfalls that have snagged others. It got me thinking that statistically we know there are very few companies that have been successful with the same CEO from founding to a $1+ billion entity. Dell’s Michael Dell, Amazon’s Jeff Bezos and Microsoft’s Bill Gates are a few obvious exceptions.
Ben Horowitz of the venture capitalist firm Andreessen Horowitz wrote last April that they look for strong founding CEOs, in part because they have the strength to go against the grain. I agree this is a significant advantage for a company, but for every strong founding CEO that will be an asset to their company, there are many more that try to hold onto the top title because of ego or because of a misguided belief that only they really understand what is best for their company. For a startup, this added strain can cripple or at least significantly stunt the growth of a company with otherwise good potential.
My assessment is there are five main stages of management. Arguably, the first four could be considered startup management stages. The fifth, building to a billion and beyond isn’t a startup management stage, so I’ll omit it from this discussion. That leaves:
1. The Starter/The Idea Person/The Technical Visionary
2. The Concept Seller
3. The Ramper
4. The Scaler
I’ve outlined each of these stages in an effort to assess who is the right person for each stage.
The Starter/The Idea Person/The Technical Visionary
As the name implies, this is the person who comes up with an idea and recognizes it as a potential business. This differs from an inventor who is able to see an unmet need, or at least something for which people might pay money – for example Ronco’s Pocket Fisherman. Although an inventor sees products, it doesn’t guarantee they see a concept and growth plan that can sustain a business.
The Starter/Idea Person/Technical Visionary has the ability to develop, or find a way to develop, a coherent description of the technology, business concept and why someone would pay for it. Basically, the investor pitch, executive summary and some type of business plan. I’ve heard people say the business plan is dead. It is not. It may be shorter and appear in PPT, Keynote or SlideRocket instead of as a Word document, but businesses have something that communicates how the business will grow. The smart ones use the exercise of creating this document to challenge assumptions and fine-tune their plans, and then occasionally look at them too. I’m sure I’ll be musing on this topic in a future piece.
At this early stage of the company, there is likely to also be a demo created. This is the first test of a startup management team’s ability to let go. Do you have the ability to have someone other than a founder create this? Are your skills up to the requirement of creating a demo that is both technically accurate and user-centric enough to communicate the benefit?
Part two to come tomorrow – yep, I got a little too wordy.
Fork In The Road 