Contrary to what traditional wisdom suggests, a growing startup is a crucible of growth for the founder. Firm growth events trigger developmental phenomena for the founder. They teach the founder to cope with firm growth, resource constraints etc., thereby creating growth opportunities for the founder.
January 30, 2017
A few months back, I was at a startup pitch event for student founders in Santa Clara. The atmosphere was buzzing with energy and optimism as founders walked up and passionately delivered their elevator pitches, while prospective investors listened with interest and asked questions. Before the grand finale, there were talks by panelists, who were venture capitalists. I distinctly remember one Silicon Valley VC describing what his firm looks for in a founder. He said to the graduating college students who listened attentively, “There’s one thing we must make very clear right up front. The startup will make you crazy busy. Our CEOs work long days that extend into evenings and nights. There are times when founders don’t get to go home – it’s that crazy. So remember, you must be totally ready to give your best to build and grow the business. This is no place to learn.”
Although I was with him most of the way, what threw me off was his last line, when he said the startup is ‘no place to learn.’ To me, here is what the speaker seemed to imply in that line: One needs to have the prior experience and skills in order to run a successful business. After all, isn’t it a commonly accepted view that personal growth, learning, and development are things that happen when you are interning, or working at junior levels? As traditional wisdom suggests, your rookie job is where you have supervisors and managers to guide you, right?
Well, as it turns out, that’s simply not true. In my doctoral research on entrepreneurship at the University of Pennsylvania, I investigated the coevolution of technology firms and founders. My work points to several interesting findings, one of them being: As a start-up grows, so does its founder.
Here’s a riddle for you. What is common between Bill Gates, Steve Jobs, and Mark Zuckerberg? Among many other things you might think of, we know one thing for sure: They hardly knew how to lead a business at a startup. If that is true, where did they learn to lead? If not at their startup ventures, where else could they grow into the business leaders they eventually became?
Gates, Jobs, and Zuckerberg were extraordinary in their accomplishment, but they were by no means the only founders who grew with their firms. The pattern in which a neophyte founder grows with the startup to become a business leader is there to see across the tech industry.
Travis Kalanick, Founder and CEO of Uber, is a perfect case study given the number of times he’s been criticized for this actions or behavior at various stages of Uber’s explosive growth. Every time, he’s managed to haul himself up a few notches to become the CEO that his company needed.
Indeed, the growing startup is a crucible of growth for the founder, and there are at least three big reasons for that. Firm growth events trigger developmental phenomena for the founder, the founder must cope with firm growth, and resource constraints in a startup create growth opportunities for the founder. Let me explain each one in turn.
Every growth event for the firm is like a mini-promotion for the founder
Picture this: You have been working for a couple of years in your current position at a reputed large company. One day, your boss announces that you are due for a promotion. You will soon have a new set of responsibilities that you may or may not be equipped to handle. You will have to learn as you go along. Once you have mastered your new responsibilities, sometime later, you will be promoted to the next level.
There are some parallels between the climbing the corporate ladder and growing in entrepreneurship. Whether the startup bags a new client, releases a new product, hires a key employee, or raises a round of financing; each of these events results in new responsibilities that demand new skills: a situation similar to a promotion for the founder. However, there are some differences. The discrete job levels in corporate life are replaced by a continuum in entrepreneurship. The cycle of maturing in one position before moving to the next is much tighter; and you don’t have the luxury of time to perfect your skills before you move up.
The buck stops with you, and you cannot stop where you are
If your start-up is growing, you are forced to grow too. Period. When a challenge or opportunity comes along, you need to handle it. If you don’t have the skills to handle it, then you need to acquire the skills, and do it fast. Since it all rolls up to you, there is no one to whom you can pass on the shock. You must get up to speed and deliver. It is as though the start-up doesn’t wait for you to grow till you are equal to the job.
I remember a founder friend who had always thought of himself as an engineer, but when he launched his own business, he realized he needed to go out and sell the product too, irrespective of his comfort level. And he did do it, very successfully too.
Evan Spiegel, Snapchat’s Founder and CEO, has admitted publicly that he’s a work in progress and that he is “not a great manager.”
Resource constraints create growth opportunities for founders
Almost as a rule, start-ups are always resource constrained. As a start-up founder, you will need to don different hats, make decisions about areas that you may not fully understand, and in general, do more with less. If you are feeling overwhelmed due to shortage of resources, here is some good news. The greater the stretch you feel on your resources—including your own capabilities—the greater may be the opportunity for you to grow. Why is that? Recent research indicates at least three explanations.
First, when you don’t have resources under control, you need to go look for them elsewhere. That is where you learn to use your network and influence others. Second, when you don’t have expertise, you need to consult others. That is when you learn to attune yourself to other people’s expertise. Third, when you have to make do with constraints, you innovate –and learn to look at your situation more positively. Those are all the ways in which you grow.
So, that’s how a growing startup works as the crucible for founder growth. Not only does a startup give you plenty of opportunities to grow; in many ways, it forces you to grow at a pace that is unthinkable in a vast majority of work positions. Many investors, board members, and key executives miss this insight, and write founders off citing lack of experience, only to be surprised later.
Growth means different things to different people. As a founder, you are at the helm of an enterprise that might grow in new and surprising ways. As you aspire to grow your business into a unicorn, if not a decacorn or a hectocorn, you’re probably closely tracking metrics such as revenue growth, user base growth, distribution growth, and headcount growth.
As the business develops traction, other stakeholders also begin to shape your growth aspirations. These include your customers, investors, and employees. They will be interested in various other metrics, including your innovation pipeline, the return on investment you produce, and the share price which determines the upside on employee stock options. But if you truly want to be the leader your firm needs, then it is time to recognize that this growing list of metrics for startup success often misses one critical metric: your own growth. Don’t let that happen. Make the founder part of your growth agenda, especially if that person happens to be you!
January 30, 2017
January 30, 2017