Robert Heller of www.thinkingmanagers.com examines how far founders can take a business.
There are many heart-warming tales of youngsters quitting university to start up companies that make them billions of dollars.
Bill Gates – the richest man in the world – is one example. Now, two men of a similar background are challenging his position with Google.
So how far can a founding entrepreneur stay with their project – is it all the way, as the legend would have it?
A Harvard Business School assistant called Noel Wasserman has found that the reality differs from the legend.
His data shows that the percentage of founding CEOs who “go the distance” is very low, particularly in high-potential ventures. His findings suggest that people such as Gates and Larry Ellison of Oracle are the exceptions who prove the rule.
On the other hand, when the investment company Trinity Ventures examined its successful companies, it made the observation that: “The one trait of all our successful companies was that the CEO we backed at funding was still the CEO at the sale of the company or Initial Public Offer.”
Trinity believes there is “the need to believe that the existing CEO could bring the company to a successful outcome”.
When Steve Jobs of Apple reached the decision that his management had taken his creation as far as it could, he handed over control to John Sculley. After conflict and the departure of Sculley, Jobs took control once again.
Jobs is a rare talent who has presided over many successful innovations at Apple, including the phenomenal iPod.
Robert Simon says that when it comes to backing entrepreneurs, either people are invested in first and foremost, or it is a case of forgetting about people and focusing on the market’s opportunities.
The best approach is somewhere between the two, but I would suggest it lies nearer the market. As Simon observes, if management doesn’t work, it can be made to work.
Entrepreneurism is the best career opportunity there is. It is the best chance of wealth, creativity and job satisfaction available.
Opportunities must be seized and skills improved along the way to get ahead in business. So be your own venture capitalist – believe and invest in yourself.
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