Founders vs. Managers. Don’t Forget the Big Picture!

It seems that a regular inflection point in the lifecycle of a startup is the stage where the founders, who previously have been “managing” their company by the seat of their pants, have to transition from a very intuitive management approach to significantly more structure.

Which means that you have to learn how to organize, to delegate, to explain, and how to say No to people and opportunities.

As if that weren’t challenging enough, this transition and learning challenge may just happen simultaneously with or be brought about by new investors, with the founders (in more cases than not) now finding themselves with less than a majority shareholding.

So now you have founders who have to learn how to manage. Quickly. And who suddenly may not feel like they are (majority) owners anymore.

Left untreated, this can be a recipe for disaster. Worst-case scenarios include on the one hand an inability by the founding team to learn the management skills quickly enough, on the other hand emotional abdication because of the perceived reduction in ownership. Or, for extra credit, a combination of the two. Ouch!

While it is dangerous to generalize or to prescribe one-size-fits-all solutions, it seems that one of the fundamental problems that can be observed in these situations is that somewhere along the way the founders have lost sight of the size of their ambition.

If (!) I have a big and powerful vision for my unique and valuable contribution to solving a pressing and global problem for large and growing markets then it should be easy for me to restructure the business (possibly by bringing in more experienced management to fill in the gaps in the learning curve). And it should also be easy to appreciate my personal stake in the potential outcome of this adventure, regardless of relative percentage points.

If the founders cannot recover their vision and are unable to maintain their position at the center of the enterprise, both in terms of ethics/culture and in terms of market/product/benefit, then you have a real problem: A company with founders can always hire managers. A company whose founders have disengaged, on the other hand, will often have lost its soul and maybe even its will to live.

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