You Could If You Wanted To . . .

Today’s News Scrum Discussion: Why Founders Fail: The Product CEO Paradox, by Ben Horowitz.

At first I was glad to read this piece by Ben Horowitz because there is so much "advice to CEOs" out there, good and bad, but not as much discussion about whether or not founder CEOs fundamentally want this role and can be successful. It’s so obvious that it’s liberating to hear someone say "not every inventor wants to run a company." But by the end of the piece he moves in a very different direction.

Marc Barros, formerly of Contour, tackled the founder to CEO topic in a June piece for GeekWire. He pointed out that becoming a CEO involves learning a different leadership style and new set of management skills. For some people this may be an exciting or inspiring challenge, but for others it can feel like a distraction that weighs on them and inhibits their ability to pursue other creative projects.

As a former first-time founder and CEO, I didn’t make it. I didn’t understand, until it was over, just how hard the transition is from a founder to a CEO. A completely different role from getting a company off the ground, I learned that becoming a CEO is even lonelier than being the CEO.

Though, as mentioned above, Horowitz admits that not every founder will want to be CEO, he tries to make the case that everyone should want to do it. And his explanation of why it is important and possible will certainly motivate a founder who is already thinking about how to scale the CEO mountain. But it seems like it could have the opposite effect on someone who is already disenchanted with the job.

While talking about staying involved in products, Horowitz writes:

If you find . . . you cannot let go a little without letting go entirely — then you probably should consider a CEO change. But don’t do that. Learn how to do this.

It’s a prescriptive generalization which puts more value on the work founders would do as CEOs than on the work some of them might do if they freed themselves to pursue other things. —Lily Hay Newman

I’m going to disagree with Lily: Horowitz is right that all founders should want to be CEOs. Why? Because when you create a company and hire people to work for you, you’re starting a community and asking other people to buy into it. If you bring other people along for the ride, you need to be ready for it yourself. If you’re not, you shouldn’t be the lead founder of a company in the first place.

That’s what Horowitz is really getting at when he talks about a "product-oriented CEO." All of the people he cites were able to redirect their passion for products towards company operations. Instead of focusing solely on products, they turned to injecting their company culture with the same passion and vision that made it successful in the first place. That’s exactly what Horowitz recommends:

At some point, you must formally structure your product involvement. You must transition from your intimately involved motion to a process that enables you to make your contribution without disempowering your team or driving them bananas.

In this way, it’s not so much about forcing everyone to be a CEO, it’s about re-imagining the CEO as the keeper of the company vision, not just a decisionmaker. I have no problem with asking everyone who starts a company to think about investing time into keeping that company focused. — Gabe Stein

I agree with Lily here, in the anti-establishment tradition of the Scrum. I get Gabe’s point, that a founder should be ready to lead his company as CEO. But the question here isn’t about "founders" so much as inventors. It’s possible to believe in a creation—a web platform, a search algorithm, a pharmaceutical product—without caring at all about running a business.

When Lily mentions "the work some [founders] might do if they freed themselves to pursue other things" those other things are the real work of an inventor—a tinkerer, an experimenter, a creator. The personality of a person who invents imaginative new products or reimagines a system is often not that of a great CEO. Steve Jobs and Mark Zuckerberg are exceptions, not the norm.

I’m new to the corporate world, but I’ve spent a long time in science labs. I’ve met plenty of brain-imagers, electrical engineers, mouse-brain researchers, computer scientists, and doctors, who are developing new technologies for decoding brain-signals and drugs for treating diseases. In many cases, the pioneers who invent these techniques, which often yield products and have impacts in the broader world of health and bio-tech, would never care to become administrators of the companies spawned by what they create. Great inventors often make terrible administrators: Why not let them pursue the creative work they’re best at? — Taylor Beck

Being the product-oriented CEO of a company of over 500 people, the point at which Horowitz claims that things get messy, requires a completely different set of skills from being an inventor or developer. In fact, you could compare it to an extreme version of being promoted to a manager because you are very good at your job as a developer, scientist, or whatever. Not every inventor is cut out for it, or even wants to be there.

When I was first promoted to software team lead, the most difficult thing I had to learn was how to let go of controlling everything and to stop imposing my work style on my team. I almost faced a mutiny from the first team I lead when I insisted that they sink time into analyzing the best tools to use. I am the analytical type, someone who will spend ages selecting the perfect tools, but my developers just wanted to start hacking. Or, as the famously engineering-centric Google discovered, even Google engineers want managers with good "soft skills," instead of stellar development skills. The best bosses didn’t micromanage, but had a clear vision for the team and were results-oriented, which is similar to what Horowitz suggests for a good product CEO. Maybe the best combo is a pair—the engineering genius of a Woz combined with the product nous and charisma of a Steve Jobs. That way they each get to do what they do best. — Ciara Byrne

[Image: Flickr user Michel Filion]

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  • Anthony Reardon

    Quite interesting! I've been looking forward to tackling Horowitz and Andreessen (in a Terry Tate Office Linebacker kind of way). So here you go.

    CEO is a social modality. By social modality I mean a way of relating to people- for instance, personal, professional, and organizational are all "modes" people can be in, be in relation to, and interact through. With that, you might speak for an entire organization, identify as a function within an organization such as "product developer", or be oriented to the customer perspective. How you do this is essential. If you say, I run the company, you work for me, and this product serves end-users- then you have implicitly defined roles that can be constructive as well as counter-productive. Alternatively you might say we are a company, we work together, and we are the people we serve. So there is this paradigm continuum of top-down vs. bottom up and vertical vs. lateral concepts. For every advantage gained by adjusting the approach, there is a corresponding opportunity cost in the advantages foregone by other arrangements. This is becoming increasingly highlighted today as products become more socially oriented and companies put more emphasis on cultural dynamics.

    There is a field of research that relates to this called "holonics" which deals with the autonomy and cooperation of parts within a system. It relates to everything from biological, to social, to computer systems. I'll draw a point from this in that a founder often is the embodiment of a product and company idea. Every design detail, executive decision, and operational action is their own. Like a seed maturing into a full blown plant, as they grow they are faced with points of departure where they redistribute, integrate external in, and form new areas of specialization such as customer service, human resources, strategic planning, etc. The more people that get involved from customer to stakeholder, the more complex the system, and the more challenging to know what the right thing to do in every instance is.

    So a good example for this is a comparison of the command vs. market economic models. Command, as often related to Communism, is an idea that a centralized decision-making body can best determine the allocation of resources. However, as we have shown, a more self-governing system such as Capitalism allows people to decide at the point-of-use, and that is more effective for complex systems.

    Not to be mistaken with the military concept of Command and Control, because that is more appreciative of the dynamic of command vs. market on a continuum depending on the context. There is a time and place where having one central authority is most appropriate. In other situations, for instance where communications are broken or delayed, it can be more appropriate for people to have executive authorities. This is easier said than understood. It's debatable. For instance, in NASCAR, Toyota who is known for movement by committee tried it's methodology against the traditional method of a singular crew chief with full decision authority. Turns out in the rapid cycles of competition in racing, you can be better off with one person that sees the whole picture and can make real-time decisions. Go figure. But in the long-term, perhaps the Toyota system will adjust and end up prevailing.

    In emerging economies- or developing countries if you prefer- there is a bubble where the hardest phase is getting off the ground i.e. getting some order from the chaos. This can last forever and seem impossible, but historically the breakthrough normally occurs through a singular if not centralized decision-making authority forcefully implementing economies of scale and so on. In this way, growth expands, but then you start to reach a threshold where such a system becomes increasingly inefficient. For instance, to secure control you might spread the wealth and power through a small sector of society- sort of duplicating and distributing the command system that worked, but perhaps prohibiting growth as the larger segment of society can't serve their own interests for the greater benefit of the whole. There are still so many third-world countries, for instance, that have the potential to grow, but can't get past their own corruption, and thus fail to attract external investment that actually wants to put money into their economy.  

    If you are going to be a successful modern Founder/ CEO you should get familiar with these dynamics. Like I said, they are immediately evident all around you, but recognizing and utilizing this knowledge is a skillset that you have to refine. Additionally, looking at things like this will help you identify areas of leverage for everything from product development, organizational growth, and competitive strategy- especially as you see companies clearly failing to apply such understanding.

    (Tackled) WHOOOAAAH!! You know you can't bring that weak ass stuff up in this humpy bumpy!!!  

    Best, Anthony