In my experience, exceptionally bright, driven, visionary people commonly share a particular attribute: a high need for control. These characteristics are also hallmarks of the startup founder, who brings maniacal focus, evangelical passion and a penchant for multi-tasking to the table. As they bring on co-founders and early employees, you can often find the founder speaking with investors, working on the product, writing code, recruiting, and spending time with early customers. This is the province of the Founder CEO and is the right way to be early in the game, both out of necessity and in order for there to be a "single point of failure" with responsibility for the early product and customer experience. However, as businesses scale, functional specialists are increasingly retained to drive specific aspects of the operation, e.g., VP Engineering, VP Sales, VP Product, etc. This makes sense as the complexity of servicing a rapidly expanding set of customers explodes, while also continuing to iterate on the product and scaling the back-end to meet these challenges. In other words, it takes a village to ramp a start-up, and part of this necessarily means that the Founder CEO give up a measure of functional control in order to lead an integrated organization forward. But this is easier said than done.
I guarantee that at least half of the IA Ventures portfolio companies think that this post is about them and they're right: it is about all of them plus many of the companies I worked with during my six years as an angel investor. There are few start-ups I've seen where this issue of diminution of Founder CEO functional control hasn't been at play to some degree. And it makes sense. The start-up is like a baby: you birth it, feed it, take care of it when it's sick, protect it, watch it crawl, then walk, then run. And when it is time to run, you've got to let it run. And to help it run fast, far and in the right direction, you need a bunch of people to help out. The parent is still important, but child's needs have outstripped only parental involvement. But sometimes the parent is the last one to figure this out.
Part of the difficulty comes from the fact that most Founder CEOs have a "power zone" - technology, product, sales, etc., and find it hard to empower others to lead in those areas. The problem is that as a business scales, there is a bunch of stuff that a CEO needs to do that goes beyond functional specialization: fund-raising; recruiting; medium- and long-term strategy; getting the most out of the Board; and managing culture. And deep CEO involvement in any one of the functional areas can both be distracting and disruptive to the team, hurt morale and potentially make it hard to attract and retain the best people. This is not a call for a brilliant product-driven CEO to avoid being involved in product decisions. But as a company grows, product features and functionality become increasingly complex and multiple customer types and requirements come into view, a robust product management organization is needed to help meet the challenge. And if this team lacks the power and authority to execute the vision, it will be hard to get the best people and the CEO will necessarily be falling short in other areas that require their attention and focus. But again, easier said than done.
My friend Jeff Bussgang recently wrote an excellent post about the challenges of scaling a business. It is both very exciting and totally overwhelming, and company needs explode in a way previously unthinkable. It requires a phenomenal amount of self-awareness and self-confidence for a Founder CEO to recognize when personal needs and company requirements begin to diverge, and to bring in world-class leaders to help manage and drive growth. This is when the Founder CEO needs to be at their best, recruiting not only those with the best skills but those who are the best and who will positively impact firm culture and elicit deep founder trust. This is one way a Founder CEO can get comfortable with letting go, surrounding themselves with awesome people who will make them - and the company - even better.
While there is certainly a connection between power and control, I believe that power is having attitudes and displaying behaviors that are focused on doing what is best for the company. And this is simply a definition of leadership. Therefore in my world power does not equal control - power is reflective of leadership. So do not optimize for control. Be a leader.