Innovators need to know when it’s time to cede corporate leadership
By Scott Meacham
Copyright © 2016, The Oklahoma Publishing Company
In our business, like in any other, we talk a lot about the recipes for success.
Having worked with multiple startups over multiple years — some that succeeded, some that are still struggling, and many that failed, I’ve concluded that sometimes, we get lucky and think that we are good as a result.
A company might clear a milestone but the why behind that particular success might not be so clear. But when something fails, the lesson is right there, smacking us in the face.
Starting a new business is so inherently risky that there is always going to be a higher failure rate. But that doesn’t mean it has to be as high as it is. Failure, when we look at it, and study it, always teaches something that can increase the odds for success with the next milestone or deal.
In the next series of columns, I’m going to take a bit different approach and zero in on my checklist of things that can and do lead to failure.
Here’s No. 1 — the inventor or developer turned entrepreneur who falls in love with his product and won’t let go.
It’s his baby, the most beautiful baby ever born, and they believe that they know everything there is to know about raising that baby and delivering it into the marketplace.
That inventor may be a brilliant engineer or scientist, but often he doesn’t understand marketing, markets or strategy related to taking new products to market.
Unless they are a serial entrepreneur, and most of them are not, they haven’t had that experience. They don’t know how difficult it is to figure out a go-to-market strategy and execute on that strategy.
As we sometimes say, “they don’t know what they don’t know.”
Startups sometimes falter and fail because those technical founders insist on continuing as the CEO and strategic lead for the company instead of stepping back and bringing in an experienced chief executive with complimentary skills who can carry the venture forward.
The net result is failures in execution — not because the founder is badly intended, but because he has a really hard time letting go of the baby.
In venture capital decision making, more investments are made on the jockey (the entrepreneur) than on the horse (the product). With a technical founder, especially if he or she is a first-time entrepreneur, we look for an indication of how that individual will react when it’s time to bring in an experienced CEO to take the startup to the next level.
When founders are willing to accept a different role as the company begins to meet milestones, for example becoming the chief technology officer instead of insisting on continuing as CEO, it can be the best of both worlds — a fantastic product road map and superior execution that reduces the riskiness of the new venture instead of increasing it.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology and is an integral part of Oklahoma’s Innovation Model. Contact Meacham at [email protected].