11 Aug 20080 Comments
Entrepreneurial Toolkit #5: The Power of Two (or Three)
As an investor, the most important lesson I’ve learned over the years is that great companies are built by great teams. Furthermore, great teams rarely are one superhuman “A” player surrounded by a supporting cast of “B” players. And unlike the Borg Collective which seeks to “… add your biological and technological distinctiveness to our own”, great management teams need to have a set of complementary, yet overlapping, skill sets.
Most of us know the example of how Steve Wozniak the brilliant hardware designer teamed up with the uber-persuasive Steve Jobs to create Apple, an iconic Silicon Valley startup success story. While that partnership didn’t last forever, it’s pretty clear that the fusing of the talents of these two brilliant individuals directly led to Apple’s early success. I encourage you to read more in a “must read” book I’ve recommended earlier, Founders at Work.
Jim BalsillieMike Lazaridis
Here in Waterloo, Research in Motion (RIM) would not be today’s superstar company unless Jim Balsillie joined engineer, founder, Mike Lazaridis. Until Jim joined Mike in the early 1990’s, RIM had long remained a typical engineering oriented company doing about $500 000 annual revenues from 20-odd products. Although Jim could never have built the products, his introduction to the management brought the marketing and financial drive and focus that ultimately led to the Blackberry led success story we know today. Rather than the cult of the individual, once again it is the power of this amazing duo that built RIM.
What is unusual about this case is that both Mike and Jim share the title CEO, billing themselves as co-CEOs. Perhaps more companies should consider this approach?
Back in 1995, as MKS was starting to look to the capital markets, one of my personal inspirations, Reed Hastings CEO of Pure Software (and now Netflix), observed that “Pure Software has built a team where any of the senior management team could be CEO”. I certainly took that approach to heart when building MKS’s great team and it has been an important insight ever since.
For example, Chuck Bay, who was Pure’s CFO at the time has subsequently gone on to be CEO Broadbase Software (acquired by KANA) and President and CFO of Spatial Technology. Rob Dickerson, who was VP & GM of Developer Tools for Pure, a key operationally focused executive, subsequently became CEO of Faves and President, CEO of Pacific Edge Software (acuired by Serena Software) and EIR at Ignition Partners. These are just two data points illustrating the calibre of the team Reed built at Pure Software.
At MKS, we managed to build an amazing team, especially in the mid-late 1990’s with superstars like Ruth Songhurst, Eric Palmer, Tobi Moriarty, Michael Day, Frank Pfeiffer and Paul Laufert. It was a great mix, with stars from Canada, US and Germany. As well, almost uniquely, we had a balance of the genders. It is a big disappointment to me that I continue to see how rare that is.
To round out our discussions, anyone wanting a deeper grounding in this important topic should read the book Co-Leaders: The Power of Great Partnerships by David A. Heenan and Warren Bennis, John Wiley & Sons, 1999. With the thesis that great organizations need “more than a visionary CEO”, the bookoutlines the rare, but critical, role building a strong management team takes in building exceptional companies.
To summarize this book, in the authors’ words, “Co-leadership . . . is a tough-minded strategy that will unleash the hidden talent in any enterprise. Above all, co-leadership is inclusive, not exclusive. It celebrates those who do the real work, not just a few charismatic, often isolated, leaders who are regally compensated for articulating the oranizations’ vision”. Although, like many it has taken me years to learn this valuable lesson, I couldn’t say it better myself.
There are lots of detailed case studies, from companies in many industries, with a few key lessons for co-leaders, including:
- Know thyself
- Know thy leader (check your ego at the door)
- Avoid titanic clashes (!)
- Find out what the enterprise needs and deliver it superbly
- Lead as well as follow
- Know when to stay put (control the temptation to star)
- Know when to walk away (learn when to say no)
- Define success on your own terms
To reiterate, great companies are almost always built by great teams. As organizations and markets get more complex, I believe co-leadership will become increasingly the norm. For smart and successful people to control their egos takes a lot of maturity. Furthermore, the ideal team depends, in large part, on the stage and growth of the company. As I’ve learned, great teams take a lot of work to build, but can also dissipate over time. Indeed, they are a rare and fragile flower, to be cultivated constantly.
Nonetheless, it is definitely worth any entrepreneur’s full time and attention to unleash the power of the team – whether a gestalt of two, three or even more remarkable individuals.
31 Aug 20080 Comments
How to Get Rich Quick With a Startup?
It’s surprising how often an aspiring entrepreneur or young technology executive has tried to pitch me with that implicit proposition. And, guess what? When I hire executives, invest in a company or otherwise have to work on the same team, such “get rich quick” rhetoric suggests the best course is to steer well clear.
The notion that a real business, with lasting value, could be built in a few months or years seemed to take hold, like much else, during the heady “tech bubble” days of the late 1990’s. I can recall one such aspiring entrepreneur telling me that “we should be able to flip this business in 18 to 24 months”.
Why is such hubris a problem? For starters, it shows a healthy naivety around the amount of real work and time it takes to build a great business. Of course, there may be exceptions. Against the odds, some people winn the lottery. Likewise, in normal times, some seem to be able to build and cash out in record time. In my book, that’s largely serendipity. In addition, this short term perspective, almost always accompanies inexperience around the twists and turns that cause most business plans to take longer than originally anticipated.
And, more fundamentally, I got involved in software and technology originally as a passion. I remember saying in my early days that working in computers was “so fun, that I didn’t need to be paid for it.” Every company I’ve ever started, worked with or invested in has become a personal passion of mine. I strongly believe that long term success is rooted in passion more than money. Furthermore, it is my personal experience that almost every long term successful technology entrepreneur has shared this characteristic.
For those set on the notion of “get rich quick”, there’s still the lottery or Texas Holdem, the probabilities notwithstanding. But, building a great business almost always takes a tremendous investment of time and effort.