Business

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:

1. Inability to delegate
2. Anger when not included in every decision
3. Paranoia derived from a sense that the venture is “slipping out of their control”
4. Ignoring input from subject-matter experts
5. Expressing prescient knowledge, even when lacking subject-matter expertise
6. Lack of respect for formalized planning
7. 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:

1. Respect the need for planning activities, staff meetings, and administrative policies;
2. Realize that as the company grows circumstances may dictate new approaches;
3. Institute new systems with approval of your board;
4. Seek and accept input from others in making decisions;
5. 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!