What’s the average age of the successful entrepreneur?

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The media has done an excellent job of promulgating the myth of the whiz kid entrepreneur, likely galvanized by Mark Zuckerberg and the monumental success of Facebook. The typical Silicon Valley success story leads with the Stanford student, or better yet, a Stanford drop out, who raises millions of dollars to build a world changing company.

And from where I sit, mentoring students and recent alumni of MIT, the myth certainly seems true. Even the alumni skew to being less than 30 years of age. I’ve yet to see a faculty member and I think perhaps only one or two staff have appeared in my ventures to be mentored queue.

Of course, I’ve seen studies showing that startup founders tend to be far older than the Mark Zuckerbergs of Silicon Valley fame, but I largely dismissed those studies as they included founders of small, no-growth businesses like pizza shops and dry cleaners, not the fast growth startups I’m used to working with. These studies showed that owners of small businesses tended to be in their late 30 and 40s.

However, new research by the economists Pierre Azoulay of M.I.T., Ben Jones of Northwestern, J. Daniel Kim of the University of Pennsylvania and Javier Miranda of the United States Census Bureau, provides the first systematic calculation of the ages of the founders of high-growth start-ups in the United States.

This research is highlighted in The New York Times article Founders of Successful Tech Companies Are Mostly Middle-Aged by Seema Jayachandran.

After stripping identifying information, the government provided the researchers with a data set including 2.7 million business founders. The researchers calculated that the founders’ average age was 42. And for the founders of the 0.1 percent fastest-growing firms, the average age was 45. Firms that were successful enough to have an initial public offering or be acquired by a larger company showed the same pattern: Their founders were generally middle-aged.

The bulk of the article focuses on Tony Fadell, founder of Nest Labs, father of the iPod and key player in the development of Apple’s iPhone. His story is well worth reading about. But unfortunately the author misses a key point about entrepreneurs and why their age averages out to 42 years: I wager that a large number of successful entrepreneurs are serial entrepreneurs. Serial entrepreneurs often try, but fail at their first or even second startups. But they perform the number one job of the founder: to learn. And they apply that learning to their following startups and thus avoid many of the mistakes first time founders make. It is unfortunate that the census data the study relied upon did not provide data on how many businesses these founders started or co-founded.

Back in the last century the received wisdom amongst VCs was to be leery of funding founders who had already tasted success. They reasoned that successful entrepreneurs would lose that lean and hungry drive so necessary to building something from nothing. Now, three decades later, venture capitalists learned what Hollywood knew years ago: better to back a director who made one film that flopped that someone with no directing experience whatsoever. I’d venture to say that there is now a positive bias in favor of serial entrepreneurs, successful or not. In fact many VC firms have “entrepreneur in residence” programs to bring their successful founders in house in the hopes that they will help the venture firm spot winners or even start a new company, to be backed, of course, by the hosting VC firm.

So what’s the lesson in this new study for founders? If you are young you can leverage the bias in favor of youth: risk-taking mindset, raw problem solving capability and pure energy. And if you are headed towards middle-age, or even there already, you should position yourself as older but wiser, with great examples of how you have learned from experience. Either way, founders are the product – the best investors put their money on great founders, not great ideas. Great ideas are cheap, not so great founders. Finally diversity  wins when it comes to teams. So if you are a recent graduate make sure your co-founders have experience working in startups and in tech companies. And if you graduated some time ago, then play up your experience and look for younger teammates. As I say to my mentees, marketing is 90% positioning. As a founder you are marketing and selling yourself constantly: to investors, employees, partners, the media, vendors and others. Play to your strengths and build a team that can cover for your weaknesses.

Switching from an efficiency mindset to a productivity mindset


What is the definition of efficiency? It’s a word that gets thrown around a lot in the startup world but what does it mean?

efficiency means producing the same result with fewer resources — less time, money, or energy

There’s no doubt that startups who have raised capital have investors who demand they be capital efficient. But making stuff faster is not the metric you want to measure. That measure is productivity. Productivity focuses on getting a new, better and more impactful with the same resources. This is what investors want! Stretch the dollar. Being efficient is necessary, but not sufficient. Note the sub-title of the article by Aytekin Tank on Entrepreneur.com:Why Founders Should Focus on Productivity Instead of Efficiency, sub-titled Productivity is a way to accomplish more of what matters in your business.That sub-title is a good definition of productivity for startups.

Interestingly effectiveness does not appear in the article. As I posted previously, Efficiency is doing things right; effectiveness is doing the right things. Managers tend to focus on efficiency, C-suiters focus on effectiveness. Needless to say everyone should be both efficient and effective! But where does productivity fit in? I’ll list the major todo’s from the article to create a productive venture, with, as usual my own annotations based on my experience.

Prioritize teamwork over solo efforts

At Jotform, the author’s  company, each cross-functional team works on one project at a time and operates like a small company. This is my preferred org design, as opposed to Apple’s, which is tightly organized as one company from the top down. Jotform has 150 employees, so some type of org design is mandatory, your startup only needs a plan for org design as you are all on one team! Ownership is a powerful motivator – workers take pride in ownership, not in piece-work.

Make the most of your MVPs.

Aytekin has a great example of this, Apple vs. Microsoft. Both have about 16% MVPs. But the 600 Apple engineers were able to develop, debug, and release iOS 10 in less than two years, while it took 10,000 Microsoft engineers more than five years to develop, refine, and then eventually decommission Windows Vista. Why? Because every  business-critical role at Apple was filled by an MVP.

Slash the red tape.

By definition entrepreneurs hate red tape. If you don’t I would like to know why! Founders must have a bias for action. Process needs to serve results and be as simple and streamlined as possible. According to Bain research, the average company loses more than 20 percent of its productive capacity to “organizational drag,” otherwise known as red tape or unnecessary complexity.  I saw this in action when our small startup, Course Technology was acquired by what was the Thomson, a $7 billion behemoth. While they mostly just left us alone, there were still the company wide meetings and initiatives that sucked up our resources. I had an earn-out so I stayed my required three years, but not a minute longer. I couldn’t wait to get back to the startup world.

Forget the “more is better” mentality.

Aytekin notes that entrepreneurs often have a rebellious streak. I’d go beyond that to say entrepreneurs must have a rebellious streak. This quote from George Bernard Shaw encapsulates my take on founders:

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.

The More is better fallacy doesn’t just apply to the number of employees, it applies to the number of hours worked. Too many startup workers humble brag how many hours they work. But hours worked is just an input to a function; the output is a difference that makes a difference – a measurable result.

Giving employees the power to set their own schedules really pays off. At Mainspring our guidelines was unless you were working from home, you should be in the office during core hours:  10  to 2. Note I said guidelines. If you want to move fast and not be bogged down, run your company on guidelines, not rules.

There you have it: organize for productivity, doing more stuff that matters, efficiently and effectively. To quote Aytekin one last time:

Experiment with what works best for your business, and be sure to engage your staff in these discussions. Happier employees perform better. They’re more creative, more productive, and will deliver the kind of innovations that can set your company apart. In the end, I think that’s far more valuable than squeezing expenses or pushing for irrelevant but good-on-paper efficiency gains.


Founders are better off going it alone!

soloI’ve spent a not inconsiderable amount of time mentoring founders who wanted to find a partner and even advising solo founders that they might want to consider finding a founder to complement their skills. Having started virtually all my entrepreneurial ventures with a partner or partners, I’ve always assumed that taking on the task of founding and developing a startup as being too big for any single individual. Most of the successful companies I could think of – Microsoft with Bill Gates and Paul Allen; Apple with the two Steves, Jobs and Wozniak; Hewlett-Packard, with, who else? Hewlett and Packard; and Snapchat, with Even Siegel and another guy whose name I forget.

But today’s article in The Wall Street Journal by Cheryl Winokur Munk, knocked this assumption of mine to its knees: Entrepreneurs Are Better Off Going It Alone, Study Says, sub-titled Startups founded by a single person are more likely to survive and succeed than those founded by a team. The article is based on a working paper from the Stern School of Business. Among the conclusions of the seven-year study:

  • … ventures were nearly 2.6 times more likely to remain in business than companies with
  • … solo founders were 54% less likely than teams of three or more to dissolve or suspend business functions without actually closing, and about 41% less likely to do so than two-person teams.
  • solo ventures generated more average revenue than ventures with two founders—and they brought in at least as much revenue, and often more, than those with three or more.
  • solo-run companies, as a group, raised less money initially—even though they often went on to generate more revenue and last longer than their counterparts.

However, we do need to keep in mind that the dataset is small and more research needs to be done.

But what’s behind this seemingly counter-intuitive research finding? Decision-making! Startups need to move fast, much faster than their competition, and make thousands of decisions from their name and logo to how they compensate their employees. A single founder can make these decisions more quickly than two founders, who no matter how aligned they may be, will have differences of opinion about many decisions. As Jason Greenberg, one of the researchers says: The more cooks you put into the kitchen, the more likely there is to be disagreement about what ingredients you should use and so forth.  John Bly, a member of the Board of the Entrepreneurs Organization concurs:

This [solo founder] works in the favor of small startups which can be nimble and grow rapidly without being distracted by the stresses and misalignment that can occur with partners. While teams might be great once a venture is established and off the ground, starting a company requires decision-making speed and the authority to take chances, which can be harder with a team.

The way I tried to solve the decision making problem in my startups was a strict division of labor between my partner and myself. Typically I handled building the product, he or she handled selling it. But obviously we both had thoughts about the other’s domain. And we didn’t always agree.

Solo founders, take heart! You may not need to spend time and energy in search of a complementary partner! And startups with existing partners, you need to give careful thought to how you make decisions and how to streamline the process in your venture. Solo founders can focus on hiring a team that complements their skills, rather than a searching for that elusive founder. Soloists should run big decisions, like shutting down a product line or acquiring a company, by their Boards of Directors.

I’ll be following the research work of professors Greenberg and Mollick very closely – I’m wondering how their partnership is working out! Do researchers need to make decisions quickly and take chances?

Building your startup team

Solving jigsaw puzzle

I gave a presentation on how to build your startup team to the MIT Post-Doctoral Association last night and realized it would make a useful post.

When you build anything, say a house, for an example, you need a list of requirements from which you develop a plan.

The first item to think of in terms of your requirements for a startup team is what type of business entity are you building?

  • Lifestyle or social impact firm – the goal of both is sustainability, not growth per se. As such, they might be a partnership or even a sole proprietorship. But in most cases the team will be small and self-sufficient.
  • Linear growth or revenue fueled – this type of entity may have growth, but it is slow and steady, not the geometric growth of a venture-funded company. Often no outside capital is required – the firm runs on customer revenue.
  • High growth, scalable venture –  these ventures have hockey stick growth fueled by venture capitalists seeking 10X return on their investment.

While there are only two jobs in a zero stage startup: building the product and selling it, in the high growth company many other functional areas are needed:

  • Engineering
  • Product management
  • Marketing and sales
  • Finance and administration
  • Operations

Before you start building your team you need to define the roles and responsibilities of each functional area. The rule of thumb for high growth companies is that the first dozen or so hires should come from the founders’ networks. That saves time and money and also reduces risk by hiring known quantities.

Once you have your hiring plan in place you need to focus on hiring for culture fit. The company’s culture is defined by its vision, mission, and values. These need to be in place before you start hiring. Founders must be aligned on the company’s culture and goals before any other staff are brought on. Alignment of founders is critical. If one wants to build a company quickly and then flip it so they can take their millions and go to the beach, while the other wants to build an enduring company with real impact on the world, the company is bound to fail.

What should you look for in your hires beyond intelligence, expertise, and experience? Here’s my list:

  • Curiosity
  • Desire and ability for continuous learning
  • Creativity
  • Willing and able to collaborate
  • Good communicator
  • High level of initiative

Technology changes rapidly, rendering obsolete much of what is learned in school. Thus you need to hire autodidacts who have the curiosity and desire to learn on their own. Because products are built and sold by teams, you need good communicators who can collaborate well across functional areas.

Steve Case was the founder of AOL and is now a partner in Revolution LLC, an investment firm. I cam across two quotes from Case in an interview with him which I think best express the value of the team in a startup venture:

It ultimately comes down to people and teams, that entrepreneurship is a team sport, it’s not about any one person.

If you get the people right, almost anything is possible. If you don’t get the people right, I’d argue nothing is possible.

Here are the basic steps in building your team once your plan is in place:

  • Get the word out – first hires should come from the founders’ networks
  • Screen and select – don’t be opportunistic! Don’t settle for “B” players. “A” players hire “A” players; “B” players hire “C” players, as they fear anyone smarter or more talented than they are.
  • Test drive – give your final candidates a small project to complete before you decide to hire them.
  • Interviewing – it’s a team process. In a startup everyone should interview all candidates. Founders should stay in the interview loop indefinitely.
  • The Offer – keep in mind recruiting is a sales process. You have to sell the candidate on why they should join the company. Talented people will have multiple opportunities.

Hire slowly, fire quickly. It can be too easy to hire, especially if you have substantial capital from VC funding. Your team needs to be adaptable. Some people can not adapt well to change. You need to either find a better position for them in the company – as someone might be “playing out of position” or let them go. If you have a critical, immediate need, bring on a contractor until you can hire someone who meets your company’s standards.

Keep in mind when building your team, no one bats 1.000. You will make mistakes. The key thing is recognizing mistakes and acting quickly to correct them. That goes for the venture as a whole, not just in team building.

Fostering Apple’s culture of accountability – the DRI

steve jobs

I came across the acronym DRI in Walter Isaacson’s biography of Steve Jobs. Which is fitting, as it seems that Jobs invented the simple concept of the Directly Responsible Individual.

The need for the DRI  came out of the need to foster a culture of accountability within teams. Product managers have a lot of responsibility, but little authority. And I should know, I started my career in the technology industry as Product Manager for VisiCalc, the first electronic spreadsheet, invented by Dan Bricklin and Bob Frankston. And it wasn’t too long before I was replacing myself and hiring product managers for Software Arts other products, such as TK!Solver a tool to solve simultaneous equations. At least when I was managing Product Managers it was very clear who the DRI was!

Steve had a habit of making sure someone was responsible for each item on any meeting agenda, so everybody knew who is responsible.

“Any effective meeting at Apple will have an action list,” says a former employee. “Next to each action item will be the DRI.” A common phrase heard around Apple when someone is trying to learn the right contact on a project: “Who’s the DRI on that?”

The DRI has responsibility for a particular task until its completion.

Here’s examples of how a DRI works from Matthew Mamet’s Medium post, Directly Responsible Individuals;

  1. DRIs are very careful when sending email in the use of the To: vs. CC:fields  DRIs are on the To: list. Everyone else is CC’d.
  2. When receiving email DRIs tend to ask themselves if they are the DRI or is someone else responsible?
  3. When working on a new or particularly complex problem where the DRI is not yet known, we seek to establish the DRI early in the discussion.
  4. When we gather in meetings, we always leave with action items or next steps. (If we don’t — we need to run better meetings!) Like Steve Jobs, we seek ensure a named DRI for each task.

DRIs avoid the dependencies on manager to tell the team what to do, which increases the reliance on the team to self-organize around the DRI and know how to proceed.

The answer to the Quora question How Well Does Apple’s Directly Responsible Individual (DRI) Model Work In Practice? provides more insight into the need for and the role of the DRI in engineering companies. Read the full article for the text that fleshes out each bullet point.

  • When solving a complex, cross-functional engineering issue, you want a DRI who is responsible for driving the team’s sleuthing until the issue is solved.
  • When it’s unclear who’s got the ball and what should be happening, everyone trusts that the DRI is driving.
  • When everyone knows that something is important, but no one feels like it’s their responsibility to see it all the way through.

DRIs are efficient because you don’t have multiple people all worried about the same things. The writer, Gloria Lin, a product manager at Flipboard, is a big fan of the DRI model:

It’s one of the most valuable, practical things I learned at Apple, and it’s a tool we use at Flipboard when it seems helpful.

… it helps to have a single DRI to call out an important piece of the big-picture we’re missing, to drive something to completion, and to be responsible for strategic decisions along with our CEO.

I’ve yet to meet an MIT VMS or Sandbox team that knows what the term DRI means. If that’s all they learn from their mentoring session with me then I’ve done my job for that day.


Why startups win or the “masses of asses problem”


big scienceThere was a period back last century that Microsoft was attempting to work with IBM. But I vividly recall a frustrated Bill Gates’ angry statement to the effect that “The problem with IBM is that they throw masses of asses at a problem, which just makes things worse.” This statement, along with the truism that small is better, have stuck with me and helps explain why small, lean startups so often beat out large incumbent companies.

I’ve seen the masses of asses problem firsthand myself: at Software Arts, meetings with DEC (Digital Equipment Corporation) then the largest and most powerful computer company in the world after IBM, would involve two or three of us and a dozen DEC people. At Course Technology I saw the same problem. Ernst and Young, a top five accounting firm, was a partner and they would bring in a dozen people to meet with two or three of us.

In mentoring startups I often remind them to focus on their customer and not worry about the giant corporations that may be the market leaders in the startups target market.

Today, the article in The New York Times,Can Big Science Be Too Big? A new study finds that small teams of researchers do more innovative work than large teams do sub-titled: Psychologists have found that people generate more ideas when working alone or in smaller groups provides hard evidence that small teams are more innovative than large ones. 

In the largest analysis of the issue thus far, investigators have found that the smaller the research team working on a problem, the more likely it was to generate innovative solutions. Large consortiums are still important drivers of progress, but they are best suited to confirming or consolidating novel findings, rather than generating them.

I  highly recommend founders read this article in full. It’s conclusions help explain that no matter how hard large companies try to be innovative they often fail: smaller groups were more likely to produce novel findings than larger ones.

And be careful of brainstorming sessions!

“We find that the product of three individuals working separately is greater than if those three people collaborate as a group,” Dr. Rajaram said. “When brainstorming, people produce fewer ideas when working in groups than when working alone.”

This came as a surprise to me as in my half dozen startups we often brainstormed about such things as a product name or new features to be added to a product.

This article, which is strictly about the effectiveness of small teams in science, ends with a quote about venture capitalists:

“Think of it like venture capitalists do,” said James A. Evans, a sociologist at the University of Chicago. “They expect a 5 percent success rate, and they try to minimize the correlation between the business they fund. They have a portfolio, one that gives them a higher risk-tolerance level, and also higher payoffs.”

And another sign that this article is highly relevant to startups is the use of the word disruption not once but three times!

Dr. Evans and his team rated papers and projects on a measure of “disruption.” Nobel Prize-winning papers tended to cluster at the top of this disruption scale;
So how do fast growing companies avoid falling into the “masses of asses” problem as they add dozens of new hires? Do what Bill Gates did at Microsoft, when a group got too large he would break it up into two smaller teams.  Thus while Microsoft grew to a very large size, comparable to the long time incumbents in the PC industry, they still were able to produce innovative, disruptive products.
One final quote:
Psychologists have found that people working in larger groups tend to generate fewer ideasthan when they work in smaller groups, or when working alone, and become less receptive to ideas from outside.
As with meeting attendees, keep your teams as small as possible, but no smaller. That will help you maintain your competitive advantage over well established, very large companies.

If you want to build a company it will take a team


Business Insider has a typical teaser headline: The best advice billionaire AOL cofounder and investor Steve Case gives entrepreneurs is a truth about long-term success. I don’t  believe in teaser headlines but I do recommend the article. .

In an episode of Business Insider’s podcast “This Is Success,” Case said the best advice he can give to entrepreneurs is that building a productive team of people with complementary skill sets is of utmost importance.

It’s got some pithy quotes from Mr. Case, including: the common saying, “If you want to go quickly, you can go alone. If you want to go far, you must go together,” This sums up the cost – need for shared decision making, and the benefit – more brainpower and experience – of partnerships.

Case considers the best advice he gives as, “It ultimately comes down to people and teams, that entrepreneurship is a team sport, it’s not about any one person.” He warns against the ego boost that can come from external expectations of the founder. “The founding CEO tends to get most of the attention, but it really is a team effort,” he said.

CEOs remind me of quarterbacks in football. When the team wins they get all the credit; when the team loses they get all the blame. Well there are 22 players in modern football, 11 on offense and 11 on defense, no to speak of another 11 on special teams, so it’s way off the mark to give the quarterback so much credit or so much blame. And of course pro football teams have squad of about about 53 players plus another dozen on the practice squad. And companies range from dozens, to hundreds to thousands of employees. Here’s another great quote from Case on teams:

If you get the people right, almost anything is possible,” he said. “If you don’t get the people right, I’d argue nothing is possible.

These quotes all come from the This is Success podcast.

I virtually never see a full management team at my mentoring sessions because most of my mentees are at the zero stage and it’s usually just one or two founders. But what I also don’t see is a hiring plan to bring on the balance of the management team and even director level and individual level staff below that. I started my first company with a detailed spreadsheet listing position, hiring date, and projected salary for the first dozen or so hires beyond the management team, so I’m amazed that most of the founders I see have barely thought beyond hiring another engineer!

There are multiple reasons to have a team:

  • Startups are a lot of work. Spreading work amongst a group means the company is not totally dependent on a single individual, which is very risky.
  • No single person will have the engineering, marketing, sales, and support skills and experience to fill all those roles.
  • All founders have strengths and weaknesses. I was taught long ago by successful entrepreneur Bill Warner not to try to strengthen my weaknesses but rather to hire staff with complementary skills to mine and to leverage my strengths.
  • All teams needs a variety of perspective, which only comes from a diversity of teams. Research has shown that diverse teams – men and women, whites and people of color – make better decisions than homogenous teams.
  • You can’t be two places at once! Successful companies are usually national in scope if not international. No matter how smart you are you can’t be negotiating deals in New York, Austin, Beijing, and Silicon Valley simultaneously.
  • Managers only have so much reach, meaning they can only direct so many staffers before they hit overreach. That number varies with the individual, but all individuals no matter how talented and experienced have a limit. The buspeak term is “span of control.” Even if it’s as high as 20, that’s a drop in the bucket in a company of 1,000.

Personally, lacking any individual skills aside from being good at recruiting talent, I love working in a small team. The best ideas always get better, the bad ideas get killed off. And it’s much more fun. That’s a term rarely used in the startup world, but if you aren’t having fun you will burn out. Have some, it’s free.

Unfortunately Steve Case does not go on to provide advice on how to build a team. However, I have a post based on an interview with Julie Larson-Green of Microsoft. There you will find some actionable tips on how to build a team. Another post I can recommend to you is Talent Tracking, which you need to start now, if you haven’t already.

If  you want to build a product you can do that by yourself or with another engineer or two. But if you want to build a company that will take a team. This requires you to know thyself, the absolutely necessary first step for any would-be founder.

The cybernetic startup & why delegation is a key skill of successful leaders


I started my professional career in the sound reinforcement business as an individual contributor working first for Bill Hanley, of Woodstock fame, and later for his brother Terry, who was doing the sound for Aerosmith at the time I started working for him. Before that I’d been helping my friend Nancy Talbott of the Boston Area Friends of Bluegrass and Old-time Country Music by recording the concerts she put on and eventually doing the sound reinforcement for music greats like Bill Monroe and Doc Watson. Through my connection with Nancy I ended up working as the chief sound reinforcement engineer at The Performance Center in Cambridge. But there I was thrown into management without any idea of what I was getting into, as The Performance Center had two music rooms, each running seven days a week. There was no way I could handle that myself so I hired two friends of mine to fill out the schedule. But my management responsibilities consisted of simply scheduling everyone and ensuring we had backup in case one of us got sick. I hardly thought of myself as a manager and frankly no one else did either! The word “delegate” wasn’t even in my vocabulary.

I still thought of myself as an individual contributor when I changed careers after getting my M.S. in Library and Information Science. However, my first and only manager as a community librarian/media specialist was a great leader – Sigrid Reddy knew how to get more done with less resources, the mark of a successful entrepreneur, despite being an employee of the Town of Watertown. So thanks to her I ended up managing several professionals we were able to hire through government grants: two photographers, a graphic designer, and a filmmaker. As their manager I saw my role as simply getting them the resources they needed to do their jobs and collaborating with them on the direction of their projects. The word “delegate” stayed dormant in my vocabulary.

I had to learn how to delegate and  learn fast when I was thrown into the deep waters of a successful software startup. Although the leaders of Software Arts – the inventors of VisiCalc, the first electronic spreadsheet – recruited me as a product manager, I soon was tasked with growing and managing virtually every function in the company save software engineering. It was delegate or die as my staff grew from one – me – to about 75 marketing and sales people, QA engineers, documentation writers, product managers, accountants, and even facilities management, as we had our own building. Learning to delegate became an incredibly valuable skills in my four venture-backed startups.

I developed a rule of thumb for delegation: delegate everything someone else could do better than I. That was the key to gaining leverage as my management responsibilities grew. Not having any individual skills – I wasn’t trained in engineering, sales, marketing, finance or administration – made delegation a lot easier. I was never tempted to try to do anyone else’s job myself. But I did see other managers who had never learned how to delegate and I watched them reach burnout as they vainly tried to do more and more themselves rather than delegating to their staffs.

Thus the Inc. article 5 Reasons That Entrepreneurs Fail to Delegate–and Fail to Succeed caught my eye, especially the very wise subtitle: Success in a new venture isn’t about how much you can do yourself.

Let’s take a look at each of the five reasons and as usual I’ll annotate them from my own experience.

1. Thinking only you can implement your dream idea

Most founders I mentor are bonded to their startup idea. And very few even think about building an organization, let alone delegating. I learned from VCs that they were investing in the team, not the idea, and building a team was job one for founders. Thus every business plan I ever did, starting with the very first one for Course Technology in 1989, carefully mapped out our hiring plan for the next three years. In knowledge businesses the vast majority – as much as 75% or more – of the operating budget goes to personnel, recruiting costs, salaries, benefits, and overhead. Yet it continually surprises me that founding teams have a DIY ethos. I can understand why founders who come up with a great idea are frankly afraid to delegate, thinking only they can implement their idea. But they are missing out on, and what I learned early on, is if you hire only people  who are better than you are they will not only implement your idea but do a better job than you ever could. I was taught by the VCs that “A “players hire “A “players, but “B” players hire “C” players – out of fear of losing control and being shown up by their “subordinates.” Delegation means letting go. And counter intuitively, only by letting go can you transform your idea into a business that scales.

2. Being unwilling to take the time to explain and delegate needs

Unfortunately many founders operate on the old saw “If you want something done right, do it yourself.” They  are unable to trust their staff. Not only do they lose out on the incredible leverage that hiring great people gives you as a founder, by micro-managing they demoralize their team and can end up not only losing great people but by never actualizing their business idea. I found the best way to develop trust was to assign a small task that could be done fairly quickly with minimal resources , starting with job candidates. Great people rose to the challenge and were hired, others didn’t and were not. But the pattern was set: as their manager I would help them set goals, would get them the resources they needed, and would provide feedback and guidance when asked, but basically they were on their own to achieve their goals. And thus they owned the job, they weren’t just renting it from me. If employees act like owners your venture will succeed! The time you invest in setting goals, providing resources and offering feedback will be paid back 10X by teams that see you as their leader, not their boss.

3. Not trusting key team members to get required results

When we hired Howard Diamond as our VP of Marketing and Sales at Course Technology he built his organization around peer-to-peer management. Each sales territory had an inside sales person, a field sales person, and a customer support rep. The teams were compensated based on the results the team achieved. There were no individual goals. He used peer pressure to deliver great results. In the rare occasions when he hired someone who wasn’t pulling their weight the team let him know immediately, because they knew that hiding that fact would hurt them in their pocketbooks. Giving his regional sales teams autonomy delivered amazing results, but of course required delegating traditional sales management to his teams. They knew the results they had to deliver, but it was up to them to figure out how best to do so.

4. Having a lack of your own clarity about what it takes to succeed

Most of the founders I mentor are engineers. They like to build stuff. They know how to build stuff themselves. What doesn’t come naturally is helping others to build stuff. I find engineers often need a lot of coaching to learn how to provide their teams with the “what” and “why” of their goals, leaving the “how” to the teams. This requires focusing on results, not activities. Too many inexperienced managers focus too much on process and not enough on results and on the metrics they need to help their teams become self-managing.

5. Being afraid that delegating means losing control

Like any green manager I had this fear myself, but because it I was endanger of drowing in work if I didn’t delegate I was forced to give up control. Through my initial experience managing media professionals I learned that while I needed to hold my staff accountable it was up to them, not me, to get the job  done. The real trick is NOT to set goals for your teams but to help your teams set their goals in the context of the venture’s goals. Collaborating on goal setting is far more effective than dictating goals as teams will buy-in to goals they set with you.  Delegation requires trust and giving up control, but you will find that if you hire “A” players their drive and ambition will deliver results beyond what you ever imagined. Your management role may well become pulling your team back from setting unrealistic goals, not pushing them to achieve stretch goals you have set for them. Pull works far better than push when it comes to managing your staff and in selling to customers.

Delegation all boils down to leverage. You can get much more done through others than you can by yourself, which can be thought of as the defintion of management. Startups are expected to scale and grow rapidly. To do so you need to focus on what you and only you can do and delegate everything else. It’s scary, so start small with very short term projects to build trust and autonomy. Don’t expect that you can just hand your team their year-end goals and walk away. Create short term projects with accompanying feedback – I call this cybernetic management – courtesy of Norbert Weiner. I’ve taken his term  beyond communications and control in the enterprise to encompass communications, creativity, and collaboration. The cybernetic organization appears to manage itself, with a minimum of friction. Management thus can be “management by exception” leaving founders free to set strategy, manage their Boards, and otherwise focus externally.


Startup companies are archaic!


One of the major issues I’ve seen in mentoring over the past decade is the discomfort, pain and even confusion great engineers go through when they enter the dreaded “time to start a company” phase. As a serial entrepreneur, my product sweet spot was building the company. I enjoyed the entire process, from idea to idea validation, to forming a business entity with a partner, to recruiting. The thing I didn’t like and wasn’t good at was finance and I always had a CFO to handle that. But engineers are just the opposite. Engineers like building things, but things don’t include companies. It’s amazing to me how many teams form and never have a founder’s agreement, only to run into problems when they actually have to create a business entity. So how do engineers get their products to market without going through the pain, hassle, and major distraction of not just forming a company, but then running it?

Scott Kirsner, The Boston Globe correspondent who writes the Innovation Economy column weekly, has an excellent article entitled This former venture capitalist is reinventing the way a company works that focuses in on one former founder’s response to this problem.

Phil Libin, founder of Evernote and a former venture capitalist thinks he has the answer.

“The whole venture capital model is stupid,” Libin says. But “the stupidest thing,” he continues, “is the idea of a company. Companies are increasingly archaic, as a unit of organization in the world. What is it about companies that makes the most sense?”

People who are smart and skilled at creating products, Libin says, shouldn’t have to “raise money, have human resources drama, and run a small little fragile company.” Instead, they should “use their superpower to build a great product,” while having ownership in what it becomes

Libin has founded an alternative to creating companies for entrepreneurs. All Turtles. (All Turtles? Yet more proof that all the good names are taken!) I found the AI generated painting on their home page rather disturbing – not a great way to attract people to your venture. But don’t let that stop you!

I’m have a passing familiarity with two Boston-based attempts at solving this problem:
Paul English’s Blade Network and Joe Chung’s Redstar. I’ve met both founders and they are super smart, very experienced entrepreneurs. I wonder if Libdin has talked with them. I also worked in one of the region’s first incubators, HyperVest.  All Turtles is not an incubator nor an accelerator. The former incubates startups, the latter accelerates the progress as a company. The product of All Turtles is products, not companies.

What differentiates All Turtles from other attempts at taking ideas to market without the hassle of creating a company as the vehicle is that AI is the foundational technology. I can’t remember if this is an original idea or I read it some place, but I believe that AI will be like electricity – it will be everywhere, in everything, but rarely visible to consumers.  The competition for great AI developers is intense – they are more options than just about any other tech niche.

But Libdin is really aggressive.

Startup creation and venture capital funding, in Libin’s view, are too focused on “the 50 miles around Stanford University,” in the heart of Silicon Valley. All Turtles has already set up operations in San Francisco, Tokyo, and Paris. Libin says Mexico City is next, and his goal is to be active in 20 of the top 50 cities worldwide in the firm’s first decade. That is largely a strategy to tap markets where there is technology, design, and product development talent that are less competitive than Boston, New York, or the Bay Area.

While Libin seems to disdain VC money he’s accepted a $20 million investment from General Catalyst (a great name, by the way).

“Phil has a brilliant mind and has been able to attract incredible talent from all over the world,” says Niko Bonatsos, a managing director at General Catalyst. And Libin is “spot-on to notice that not every amazing product thinker loves or cares enough to do the company-building part of the equation.”

Depending on the value-added and T’s and C’s of working with All Turtles it may well attract great engineers and scientists, but I’m not optimistic, as it’s just one in a series of series of attempts to create a Ford-like assembly line for technology concepts that could turn into the next big thing.

My best guess is that All Turtles will go the way of the Blade Network and end up creating a company or two and putting all their resources there. But time will tell. In the meantime there’s at least one viable alternative for creators of great products who want to avoid the hassle of creating a company, while participating in the wealth a truly great product can generate. Check it out if you aren’t afraid of see the disturbing image on the home page.

Hierarchical vs. networked management models

eileenfisher.jpgReading two very different articles about business in two different publications the other day got me thinking about models of management. Management Today by Chander Chawla on Forbes.com is an overview of what he sees as the models of management.

The military was problem the first attempt to gather a diverse group of people organized to work together towards a common goal. hat structure gave us a few principles:

  1. Hierarchy

  2. Command and control

  3. Incentives for achieving the goals

  4. Division of responsibility based on function

  5. Centralized decision making

My experience working for a very large company, then called Thomson, now Thomson Reuters, with about a $7 billion dollars in yearly revenue down to a two-person startup jibes with the traditional model. And every startup I mentor at MIT has a CEO, CTO, and often a COO. Startups all have boards of directors, CEOs and a hierarchical management structure. Nothing has changed in my five decades of working life.

But Eileen Fisher, founder of her namesake clothing company, managed to build a company that for three decades has gone without a CEO.

The unconventional leadership structure reflects Ms. Fisher’s belief that consensus is more important than urgency and that collaboration is more effective than hierarchy.

She’s driven her company to annual sales of $500 million and it’s still growing. The interview with her in The New York Times Corner Office column by  David Gelles provides fascinating insight into a company with decentralized decision making and no boss.

I’ve written previously about how companies need to be built on a foundation of values and Eileen Fisher clothing is built upon the values of timeless designs, sustainability, and simplicity.

Her employees now own much of the company and she believes that really works:

It engages people and their sense of ownership, and they’ll tell you things. They’ll say in a meeting, “Don’t spend my money on that.” People aren’t happy when they see people wasting money here or there or being extravagant on something.

Nothing could be more counter business cultural than Eileen Fisher’s “leadership through listening.”

At that point you had a real business going. What was it like to become a boss?

I still struggle with that. I don’t think being a boss is my strength. I think of myself as leading through the idea, trying to help people understand what I’m trying to do, or what the project is about, and engaging them. I always think about leading through listening. I was a designer, so I didn’t have preconceived ideas of how this business works. And I was kind of lucky to not know.

I encourage you to read the rest of the article for more details on this founder who has refused to  become a boss and has succeeded not despite that,  but because of it. Those of you with the time and patience can also read the full Management Today article where the author posits four types of management:


Frankly I can buy into both domain management and organizational management. You will have to decide for yourself about Perception management and Feelings management – neither resonated with me. While perception is important in any business and of course we all have feelings, that doesn’t mean they are domains of management. Mr. Chandra himself admits that However, the four management categories do not carry equal weight. A lot depends on your level in the hierarchy, the maturity of the organization, and your function. 

Before you just follow your friends and classmates by building your startup on the military command and control model at least take the time to understand where that model came from and that there are alternatives. And whatever you build, build it on a strong foundation of values.

Being a rather anti-authoritarian myself, the choice of models is easy, the one built upon the values of the networked model where colleagues collaborate, create, communicate and arrive at consensus.




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