On the transition from founder to executive

I founded my first set of companies when I was 23. It was 1999, notable both for the significance of the dot-com rush and the insignificance of Y2K, and there was plenty of opportunity for a young company to get contracts building The Next Whatever people were prepared to throw money at. Async, which was the company I was most invested in, was at the time a pure services company focused on open source consulting, and as founder I poured basically all my time and energy into growing it to the point of profitability.

Many years later, Async spun off a new company called Stoq, taking a platform and domain model we had built across multiple projects and wrapping it into a simple commercial proposition. As Stoq matured into sustainability and we sought to attract outside investment, I found I kept stumbling on organizational problems that stopped us from moving from scrappy start-up to an established enterprise. This post highlights two key lessons from this transition that I learned — the hard way.

Founders are pathological innovators

It took a long time for me to realize what being a founder implied about myself; I honestly never put a lot of thought into it. But with hindsight, and observing others that I've worked with or read about, founders turn out to be people with an almost unhealthy level of prejudice against the establishment. As a founder I was absolutely confident I had struck on a world-changing approach that nobody else had ever thought of, and that everything that had been tried previously was fundamentally flawed — but honestly I didn't know much about relevant prior art. That inclination to ignorance, which in nearly every other context would be a shortcoming, is essential in allowing the founder to single-mindedly pursue their burning objective and ignore everything else which might slow them down. This is why criticizing a founder of NIH is missing the point — founders must NIH in order to be worthy of the title.

Most founders will say their friends think they are crazy; in reality, it's more that their friends know they are crazy. You have to be crazy to think you can reimagine mobile phones from scratch in detriment to everything the #1 OEM in the world is doing. You have to be crazy to think you can build a better rocket after decades of subsidized, competitive Cold War innovation. And you have to be crazy to think a freely available open source operating system ANYTHING is commercially viable — if you don't believe me, just ask Mark.

Sometimes crazy works, and through survivorship bias we cherish those that make it big, but let's be honest, you need to be crazy to found something truly unique.

Successful founders are also biased towards action. Instead of debating or trying to convince a group of an approach, founders succeed by building. They will write up the manifesto, implement the code, record the video, call the customer — naysayers be damned. Many of today's most successful companies had fundamental, core contributions from the founders themselves, built at a pace that defies any sort of estimate and project plan you'd expect from an established organization.

In summary, founders are hopelessly partial to innovation and action; they (through ignorance and panache) ignore pre-established practices, and and in a pinch, will just do whatever needs doing with their own bare hands.

Success is a founder's nightmare

It comes to pass though, entirely through luck and sheer effort, that some start-ups move past this initial, hectic phase into a more stable environment; this is when there is product-market fit, customers are buying and the focus shifts to growth. This usually comes before true sustainability, and to me that's the most dangerous time in a young company's life.

Every founder strives for this moment, and all their energy is spent trying to move past that tipping point. But here's the thing: if you do manage to get there, it turns out that everything that defined you as a founder is worse than useless. In thriving so well on ignorance and raw energy, as a founder I struggled to realize that as my company shifted gears, I needed to shift gears too. And the new job in some ways wasn't nearly as fun as the old one.

Until I saw it through a different lens.

What's grey, enrages innovators and makes for a great exec?

Answer: a combination of pragmatism and delegation.

Out of all the possible management qualities, why are pragmatism and delegation most important to founders? It's because they are near perfect opposites of pathological innovation and bias to action. In fact, they are so deeply uncomfortable to innovators that they are akin to a secret weapon. It's like sprinters training for hill climbs — if you can figure out how to do both it's going to be hard to ever beat you.

Mostly to spell this out to myself, I want to highlight the practical implications of this shift:

  • Pragmatism is understanding that life is the art of the possible. It means accepting that changes to released products take more effort than immediately obvious. It means you need to accept not everybody on your staff will be exceptional at everything on the checklist — and that you should cherish their qualities instead. It means you end up paying others to do stuff less brilliantly than you would, because getting it done at all is better than unimplemented perfection. And in summary, perhaps most distressingly to my innovator genes, pragmatism means accepting time exists and is finite. That golden rewrite will never happen, and that's OK.
  • Delegation means it's actually worse to do something yourself, even if you can probably do it better. At the heart of this is the realization that it doesn't matter how perfect the vision is; if the people that need to implement it don't understand or believe in it, you might as well not even have the vision. And in fact, rather than communicating visions, as an executive I found myself moving to spending most of my time listening and asking questions. Every once in a while I'll get excited and try and bang out an idea onto the team, only to realize it takes months for that idea to come into practice, and usually not in the way I envisioned. Delegation implies you are also OK with that; in fact, it implies that you appreciate others mutating your original idea, because it means they took it onboard.

A good exec spends much of their time asking questions that drive towards two things: evaluating trade-offs, and forming consensus. And building very few new things. If you ask me, that's unnatural! And yet, I have personally watched some of the best in action and cannot ignore the quality of the result.

Why founders should strive to become executives anyway

If founders are ill-equipped to become good execs, what's the point?

In short, because it's dynamite. When a founder is able to stop reinventing everything and build trust with the team around them (and the board above them), they are much more likely than any externally hired exec to be successful. They will know the product like noone else, and can build deep connections with customers in a way unlike any professional exec. They keep driving innovation. And by virtue of learning to be flexible, they can outmaneuver their competitors lead by classic founders or vanilla execs.

(Tellingly, many founders are unable to make that shift, which usually gets them kicked out and superseded by a less brilliant executive hired by the board. Just look at the pattern of Jobs, Musk and most recently Hykes — this isn't just a series of accidents.)

Looking back after all these years, I'm much more comfortable and accepting of the fact that there is a real difference between founding and growing, and that we need to learn and change to get there. Perhaps others will see similar patterns in their own experiences; if so, I'd love to hear more about your experiences and what went right, or even better, what went wrong. Thanks for reading!