Whoa, a new, actual, blog post? Crazy, eh?
Over the weekend I read Steve Fisher’s new post up at TechnoSailor. Steve’s a fantastic guy, wicked smart, and his series’ of series at TechnoSailor/VentureFiles has been fantastic to say the least. His new one on “Rules for Entrepreneurs” is more salient to me than his last one on raising funding.
The Perils of Founderitis
Per Wikipedia, per Steve, Founderitis is:
“The term “founderitis” or “founder’s syndrome” refers to the unhealthy condition that afflicts many companies whose founders maintain a stranglehold on organizational leadership. While many companies owe their success — and in fact their very existence — to their founders, those same individuals can create chaos that ultimately leads to the organization’s collapse. The challenge to founding CEOs and boards of directors is to take steps to change conflict and chaos into opportunities for growth.”
In short, it’s the inability for founder CEOs to let go. At the extreme it’s a case of “I need to know everything and make every decision”, though most VCs will spot that a mile away and nip it in the bud before it’s a real issue. More commonly, it’s an inability to transition from founder to leader to a leader of leaders.
Here are Steve’s symptoms for Founderitis:
- Inability to delegate
- Anger when not included in every decision
- Paranoia derived from a sense that the venture is “slipping out of their control”
- Ignoring input from subject-matter experts
- Expressing prescient knowledge, even when lacking subject-matter expertise
- Lack of respect for formalized planning
- Subterfuge of efforts to institute procedures, processes and controls
My Experiences with Founderitis
Personally I’ve had my fair share of challenges. Pre funding, all the founders at b5 made decisions as a group. Most decisions. Sometimes they were awake and I wasn’t (they were all in Australia!) and a decision needed done right away, and vice versa, but we tried to make decisions as a team. That’s fine when the entire company is the founders, but once you start to hire people, a chain of command (at least operationally) becomes necessary. Especially with folk in Australia, because a 24 hour lag on every email becomes painful (for both sides of the ocean!)!
Once we took funding, someone had to be CEO, and the VCs wanted me given that I’d done the “on the ground” work raising the round. Not that the other founders hadn’t done a boat load to help, just that the VCs wanted someone local to yell at 
We very quickly started hiring people, and thanks to great advice from Rick and thanks to personal experience we adopted a policy right away of “hire the smartest people, hire smarter than yourself”. For awhile we tried to operate with me at the center of all decisions (not purposefully, but just because things evolved that way naturally). We soon realized that each team lead had to have all the responsibility, all the authority and all the resources in order to perform to their peak ability. And if they didn’t, it wasn’t because of lack of authority/responsibility/resources (ie: they were responsible).
The Next Phase
As a CEO/founder, I realized pretty early that my first goal in hiring was to hire where I was weak. For the last 18 months, that’s been most of our hiring: hire smart people where I/b5 are weak. But increasingly I’ve realized (once again thanks in part to great Rick advice) that the next phase is even more important: hiring people where I’m strong.
Hiring folk where you or the company are weak allows you to delegate stuff you don’t know. But that still means you want to / have to be involved in certain types of decisions. Hiring people where you’re strong lets you truly empower your entire team to do everything, but it also lets you truly scale the organization.
Imagine if you were a software shop and you were the only real good project manager and you were the CEO. Not hiring other project managers would create a serious bottleneck.
These days, I’m doing everything I can to solve that bottleneck here at b5.
Solving Founderitis
I agree with Steve Fisher’s analysis of solving Founderitis:
- Respect the need for planning activities, staff meetings, and administrative policies;
- Realize that as the company grows circumstances may dictate new approaches;
- Institute new systems with approval of your board;
- Seek and accept input from others in making decisions;
- Delegate, Delegate, Delegate
But at the same time you can’t really solve it. Bill Gates still gets involved in key decisions at Microsoft. Mark Zuckerberg still sits in regularly on team meetings at Facebook. But the ability to ask your team what they think, what their decision would be and how they’d handle it is key at all times.
I’m definitely still learning, but Steve’s post on Founderitis was a great reminder not just of how far I’ve come (mostly by accident), but of how much more growing I still have to do.
Thankfully, our new senior hires at b5 will allow us to do #1-4 in Steve’s list of how to solve Founderitis naturally. Keeping our culture through this change will be our biggest challenge and opportunity!
Have I “solved” Founderitis? Naw. You never do. The company is always your baby and you’ll always wander into meetings. But hopefully by hiring smart people, hiring smarter than myself and hiring both where I’m weak and where I’m strong – and respecting the team that we’ve built here, I’m well on my way to being an empowering macromanager (ie: leader of leaders) that helps create an entrepreneurial culture vs a limiting micromanager that demands everyone does things my way.
Hopefully!
May 20th, 2008 at 6:02 pm
It’s a bigger issue than a lot of people might think and it’s great to see it recognized. I’ll definitely make sure Steve sees this post.
By the way, you should have the tech team fix the font color in your comment box.
May 25th, 2008 at 7:55 pm
This is a great post. One thing I would add here is a need for accountability at all levels and a strong idea of the direction of your team. It’s never a problem when you are able to become a “leader of leaders” to have to change direction but the ability to have a number of people who strongly understand the culture and direction at each level of management will ensure that everyone is being as efficient with their time as you are.
I would suggest you encourage each of your best managers to find two or three people who they can go to and say “if ever you feel that I am not doing what’s best for the company and its vision please pull me aside and explain your concerns.”
This has helped me personally avoid having my ego get too mixed up or have new technologies and fads have me stray farther away from my organizations vision than would be beneficial.
May 27th, 2008 at 7:25 am
how could i get bill gates’ e-mail.
will help me?
May 28th, 2008 at 1:28 pm
I have expirienced this first hand at three IT companies! I’m now involved in charities, much less taxing in this respect:)
June 2nd, 2008 at 12:06 pm
Hi Jeremy,
This is my first visit to your blog, and I have to say it’s high quality of those of other probloggers
About founderitis – I experience it in some kind of ways – I own a franchise unit, and apparently I can localise the effect of founderitis
However, I start a business blog (at Noobpreneur.com), and has been planning to delegate some writings to guest bloggers for some time, but I suffer severe founderitis if delegating is related to this blog
Cheers!
June 4th, 2008 at 2:53 am
Jeremy, Great post. My last company Raindance Communications competed with WebEx for over 6 years and they kicked our ass. As i look back i believe it was a healthy dose of founderitis that always make us believe we knew what the market wanted more then the market. Thanks for sharing.
June 5th, 2008 at 11:36 pm
Jeremy – I figured I should wander over and read a bit here, quite glad I did.
This is an amazingly insightful post, even if it was triggered by something someone else wrote. It’s not common that most founders see themselves in something like that – though they might see it in others.
I would posit a guess that part of the reason so many “successful” entrepreneurs seem to be serial entrepreneurs is that it is sometimes easier just to sell their creation and move on to the next challenge than it is to slowly transition to a state of lesser involvement in the day-to-day functioning of their companies. Start-ups are a different mindset entirely than standard long-term corporate structures.
Still, there is much to be said for those who are able to roll with the changes and adapt to bringing in those who are equally good or even at times better at the things we pride ourselves at being ’strong’ in.
June 22nd, 2008 at 12:36 pm
Interesting and insightful post Jeremy. Thanks for sharing it.
June 26th, 2008 at 7:57 pm
Jeremy,
thanks for sharing those thoughts about hiring. I’m in my own company after 20 years in other peoples and hiring and performance management are two areas that I felt I was very good at as an IT manager. What rings true is the idea that there is a life cycle to a company and that you need to extract yourself as a founder over time and allow specialists to take over. That was how the industrial revolution worked and it is not really a surprise that it works that way for the tech revolution. I’ve talked to Rick once and attended one of his seminars and he is an excellent presenter with knowledge in a facinating field – the VC world. As a blogger myself I find B5 to be a fascinating company and best wishes to you going forward.
Stew
July 1st, 2008 at 4:18 pm
Regarding GeekMommy’s comment that “I would posit a guess that part of the reason so many “successful” entrepreneurs seem to be serial entrepreneurs is that it is sometimes easier just to sell their creation and move on to the next challenge than it is to slowly transition to a state of lesser involvement in the day-to-day functioning of their companies.”
I know a few entrepreneurs that were serial and they have pointed out that getting a company to survive requires an entire set of new skills and many serial entrepreneurs have 1 or more failures where they have lost everything. Like anything, there is a learning curve and it is easy to come up with a weak idea for a company, harder to come up with a good idea, and then there are the realities of that idea thriving and surviving.
July 3rd, 2008 at 8:33 am
Stew,
I agree with your possible reasoning for why many people sell their start ups. I would wonder however if maybe that’s the problem to begin with. The fear of uncertainty in the second phase of building a business stops them from building a strong enough team to keep the company running.
I would wonder why they didn’t focus on building a strong team of leaders in the first place who can repeat a system of growth. The best companies have a large pool of people who can step into key positions and get the job done. Do you think that maybe they are neglecting this habit in their start up phase?