Why Founders Are the Best People to Run Their Companies


I don’t intend this to be a very long post. It’s mostly a musing.

Why are founders the best people to run their companies? If you look at most of them, they’re erratic, iconoclastic and relatively inexperienced at building companies. They don’t have the structure that MBA types have.

So it often seems to be the right decision when investors bring in people with experience, stability and administrative competence to take over a company after its founding. It happened with Apple, as it’s happened with so many other companies that founders started to intentionally structure voting control of their companies to prevent it from happening to them.

I have a theory as to why founders should continue to lead their company while ceding administrative responsibility to those under them. It’s at the heart of the innovators dilemma, a company emerges on one innovation but how do you keep it at the forefront of the changing innovative landscape, which is the only way to ensure it continues to grow, create value and stay relevant.

The answer is to never leave founding mode. That’s it. Or to put it in Jeff Bezos’ terms, always stay in Day One. How?

You need to pretend you’re starting today and that means working or building the best solution for a problem today, even if that destroys your existing business. And that means committing significant resources into building that think even if there’s no guarantee it will work. And you would look stupid if it doesn’t work.

And that risk paralyzes everyone in the company. It’s the reason people want to always stick to what works. Taking risk and it not working out is usually a bad thing for most people. But the founder is usually driven enough, and has enough freedom of action that he or she is uniquely positioned to take that risk. The founder initiates the action, takes the first step so that everyone else is free to follow along because if it doesn’t work out, the founder takes the blame.

And also, founders despite how emotionally invested they are in their company, usually are driven not by the company itself but by the idea behind it. So they’re always going to be driven toward the most important or relevant iteration of the idea today even if it’s at the expense of the company they’ve built.

Founders bet today to win tomorrow. That’s why they are the best to lead their business.

And if they hire people who complement them, and hire efficient administrators to control the businesses they’ve built, they can focus their energies on initiating and building the business for the future.

I think.


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