One of the biggest challenges visionaries and founders often face is the transition to President or CEO. According to a Harvard article “By the time the ventures were three years old, 50% of founders were no longer the CEO; in year four, only 40% were still in the corner office; and fewer than 25% led their companies’ initial public offerings.” Those are some pretty sobering numbers, even if you never expect your company to go public. So why is it so hard for founders to transition to being CEO’s? We’re going to tackle this in several parts, so welcome to part 1 where we explore what it means to be a founder.
What does it take to be a good founder?
In my experience, there are two basic types of founders. The first are those who have already been making a product or providing a service at another company and they decided they could do it better on their own, these are often the technician or production founders. The other is someone who sees a need or a problem they believe they can fix so they set out to do that-the how is almost irrelevant, these are the visionary founders. Both types of founders want to provide quality and value to their clients and both want to make a difference in the lives of others.
In either case, it is important to know that flexibility, innovation, and adaptation are key elements that make a good founder. Regardless of whether you’re already an expert at creating the widget or you’re figuring out a better way to solve a problem, you will have to innovate, test the market, and adapt.
So what does it actually take to start a company? When I think about the early years of Beacon and what got Jennifer and me through I think of the following skills:
- Scrappy: We were always willing to do whatever it took to make things work and since we were self-funding our own growth we never had enough cash flow. This forced us to get scrappy and creative. We had to do many of the early office renovations ourselves and enlist the help of friends, family (thank God for my husband’s construction skills), and employees. We all pitched in to assemble and move furniture, paint walls, and whatever else needed to happen.
- Innovative: This one is similar to scrappy but different in my mind. Innovative has more to do with generating creative solutions to challenges the industry was throwing at us. We were first to market in Alaska as a digital marketing agency and there weren’t a lot of models to follow so we made it up as we went along. For example, we realized that since social media marketing was a new concept to Alaska, we had to do a lot of education as part of the sales process, and that education didn’t stop after the client signed. So we started offering marketing classes to the public and made them free to our clients. We taught them how to do what we did. This quickly increased the understanding of the public on the benefits of digital marketing and improved our clients’ understanding of what they were paying us to do every month.
- Perseverance & Grit: Starting a company is hard. It just is. Anyone who tells you differently is trying to sell you something. Don’t get me wrong, it is one of the most rewarding things you’ll ever do, but almost nothing outside of raising kids will leave you so frustrated and sleep-deprived. To start a company you have to have grit, that willingness to do the hard things, and the perseverance to do it day in and day out. There are really big highs and truly deep lows and you honestly have to be seriously stubborn and refuse to stop working toward your dream.
- Naïve: This might sound weird to some, but if you’ve ever started a business before you’ll relate. There is a strange, blind naïve that comes with being a founder. You’re just sure everything is going to work out. Just because it didn’t for that other person…well you’re sure it will be different for you, because it’s you. There is a blind faith amongst entrepreneurs that we will achieve our vision, even if we can’t tell you exactly how. This was certainly true of Jennifer and I as founders. We started Beacon in 2012 with no money, just the belief that this was a huge opportunity for small businesses and we were the ones to help!
- Visionary: This is one of the hallmarks of a good founder….vision! When Jennifer and I merged businesses it was because we had a vision for how much digital marketing was going to disrupt traditional advertising and how it could transform marketing for small businesses. We could see the change that was coming and we wanted to bring that change to bear for small businesses.
Being a Founder
Starting a company is often something that comes as a response to a need or a problem, rarely do any of us founders start a business because we want to get rich. Money is a helpful tool but it isn’t the why that drives most of us to start a business. The founding years are times of a lot of hard work and investment of time because we believe in our cause. This is why the list of traits for a founder are so important and you’ll notice the desire to make money isn’t on that list. Yes, we all need to make money, it keeps the lights on and enables us to feed our families and pay our employees (very important things), but it won’t get us through the early challenges and sleepless nights.
What does get founders through is a cause bigger than themselves, a knowledge that they are making a difference. The belief in this cause is what fuels us to push through situations that would stop most people in their tracks. A new company needs a founder who can inspire people to come and join the cause. A person who can see the vision and who is willing to try new things, fail, learn, and try again…over and over again. Founders tend to create a company around them; their vision, their style of communication, their working style, and typically the founders know everyone in the company. This works great when a company is just starting but there will always come a time when a founder needs to decide what the next step is for their company. Come back for part 2 as we explore what happens when a company starts to out-grow its founder.
