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Who To Hire As The First Salesperson In Your Startup

Posted on June 1, 2025 | 5 comments

This is going to sound difficult and run contrary to the industry conventional wisdom, but bear with me. When a B2B SaaS startup is hiring their first salesperson, I think they should look for someone who:

Is a dyed-in-the-wool seller with sales blood coursing through their veins. Their first sales job was in high school and they’ve sold anything from dictionaries to shoes to cars early in their career. When asked, “what’s your favorite part about sales?” they should say “winning.” Not “the process,” or “enabling the team,” or even “money,” but winning. You want to hire the person who will eventually rise to be a CRO managing a large team but who, when they’re approaching retirement, steps down to carry a bag for the last phase of their career — because selling, not managing, was their first love. Such people exist. Go find one.

Has sold to the target buyer before. While many sales skills are generic, you can save six to twelve months of onboarding time by hiring someone who has already sold to your target buyer. CFOs are different from CROs are different from CHROs are different from CCOs are different from CIOs are different from CDOs. Ditto for industries if you’re a vertical SaaS company. Glossing over these differences will do nothing to enhance your sales cycle. As they say in France, vive la difference. Embrace the idiosyncrasies of your buyer because to do so is to truly know and understand them. Certainly, it’s tempting to find “a sales athlete” and assume they can learn about your buyer — and they can — but you’ll lose valuable time teaching them and they’re certain to arrive with precisely zero existing customer and partner relationships for you to leverage. One day, when you’re huge, you may have to hire sales talent unfamiliar with your buyer and build an onboarding program to teach them. But that day is not today.

Has sold deals in your size range before. Size is an excellent proxy for complexity. Simply put, a $20K deal is a lot simpler than a $200K deal which is a lot simpler than a $2M deal. Find someone who has sold deals in your current size range and with some headroom above that. If 30 years in enterprise software taught me one thing, it’s this: deal size is in the eye of the beholder. The candidate must have prior experience selling deals in your current size range, but also be able to “see” how you could do deals that are significantly larger. Never hire someone who’s only done $20K deals before when they’ll be selling your $200K system.. They are going to lose a lot of deals learning the intracies of complex, multi-constituent sales cycles in large organizations. Let someone else pay for that education.

Has the executive presence to work a level above your target buyer. If you’re selling to the VP of FP&A, you want to hire someone with enough polish to meet with the CFO. Or, if you are selling to the VP of Support, you want a seller who can converse with the CCO. This characteristic is hard to quantify, but it goes by words like presence, polish, savvy, and gravitas. Simply put, if you can’t imagine your candidate in a serious conversation with your target buyer’s boss, then don’t hire them. Your seller needs to be looking across at the target buyer’s boss, not up.

Has significant first-line sales management experience. This is my most controversial criteria because with one bullet I wipe out all candidates who are currently individual contributor (IC) sellers. “But the job doesn’t require sales management! For at least a year, all they’ll be doing is selling. Why can’t I just hire an aggressive seller early in their career?” I hear you cry. First, ICs will generally do worse than experienced managers on the polish and presence front. Second, because you are about to put this seller, at a great investment in time and money, through the world’s best onboarding program: 6-12 months of being glued directly to the founder, doing almost every sales call together, doing every customer proposal together, and closing every deal together. There is literally no better sales onboarding program and you don’t want to waste that investment in someone who, at the end of the onboarding, is only equipped to go sell on their own. You want to invest in someone who can say: “Thank you for the amazing training, I am now ready to be unleashed to do what I already know how to do, which is to build, manage, and scale a sales team.” If you get this wrong, you’re stuck with two bad options: (1) promote the IC to a manager and hope they have the aptitude to succeed, or (2) hire them a boss, do a poor job repeating the onboarding you just did, and hope that they succeed and that they don’t drive out the IC you’ve successfully trained.

Is willing to join your company way “too early.” But why would any sane sales manager want to step back into an IC sales job to join your company? Because they see the potential. Because they believe in your vision. Because they believe in you. And because they understand that if they want to be the first sales VP at your company, there’s only one way to do it: join as an IC, get glued to the founder for 6-12 months, and earn it. There is no shortcut. There is no other path. There’s no, “call me back when you’re looking for a sales director in 12 months,” because you won’t be. This also serves as an important test on their commitment to your company’s vision and on their true love of selling. “Carry a bag for 6-12 months, glued to the founder, in order to earn the sales head job? Sure, why not. I love selling.” And, “after that training program, combined with 6-12 months of selling this system myself, I will literally be the best person on earth to build the sales team for this product.”

This is why I say that your first seller should be willing to join the company too early relative to their resume, and be willing to run in a three-legged race with the founder for 6-12 months. That’s the job.

The founder and the first salesperson should be running a three-legged race

Now, I’m not arguing that it’s going to be easy to find this person. But I have done it and I know others who have as well. I can’t take solo credit for the idea, either, as it crystallized in my mind many years ago in a conversation with Moveworks founder Bhavin Shah. I had some of the pieces in place, but it all came together in that chat.

The best argument for this approach, as alluded to above, is what happens if you don’t do this. Hard as this approach sounds, I have worked with many, many companies who ended up either riding a IC salesrep into management well beyond their abilities or one day realizing that they’ve spent two years giving the world’s best onboarding person to the wrong person — and now have to start over.

So while my approach may sound difficult and unpleasant, well, consider the alternatives.

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The Proper Role of the Board Observer

Posted on November 14, 2024 | Leave a comment

I’ve often quipped that board observers should be like Victorian children: seen and not heard.

While that might sound obnoxious, it’s not if you understand how hard board seats are to come by and the process through which you get one.

There are three ways to get on a startup board.

  • Found the company
  • Invest a significant amount of money in the company
  • Get appointed to an independent director seat

That’s it. There’s no other ticket. The composition of the board — the number of founder seats, the number of investor seats, whether smaller or strategic investors get observer rights, the number of independent seats and the process to appoint them — is all highly negotiated.

Once a board is formed, it’s generally one director, one vote. Whether you’re a VC who owns 40% of the company, a founder who owns 20%, or an independent who owns 1%. Board votes are not weighted by ownership. (Shareholder votes are, but they are only used for a small number of decisions.) That makes board seats, who sits in them, and the discussions among the directors quite important to your company [1].

It’s not an accident if one investor has two seats and another has only observer rights. It’s not an accident if the founder can unilaterally appoint an independent director or if they need to be approved by the rest of the board. There are no accidents. Not if everyone has good lawyers, at least. Everything is negotiated.

Let’s highlight a potential problem with a realistic example:

  • A company has arrived at a board composition of two founders, one A-round investor, one B-round investor, and one independent. So five directors in total.
  • Let’s say the B-round investor also negotiated for an observer seat. They want to use it as board training for a partner-track VP.
  • Let’s say the observer starts acting like a director at board meetings. Speaks freely as the directors do. Asks questions of management. So much so that someone watching the meeting couldn’t correctly distinguish between a board member and an observer.

What’s happened? For all practical purposes, the B-round investor now has two seats on the board. But they only negotiated one. Sure, when it comes to voting (which takes about one minute), they’ll only get one vote. But during the discussions leading up to a vote (which take the other 99% of the meeting) they have two voices out of six (33% of the oxygen) when they’re supposed to have only 20%.

That’s the problem. It’s unfair to the other investors. It’s unfair to the other board members. It’s not what was agreed to.

This is not by any means to say that board observers should not add value. I think there are three ways they can do so:

  • By answering questions posed to them. Boards shouldn’t pretend that observers aren’t in the meeting. If one of the observers is a category expert, and the board is discussing strategy, then they should ask them. When board observers can add value, the board should solicit their opinions.
  • By debriefing offline with the CEO. They can make a list of topics to discuss with the CEO after the meeting. I do this all the time. It’s a great way to add value and often more effective than speaking too much during the meeting. (Just as board observers should avoid talking, board members should avoid grandstanding.)
  • By sending the CEO questions in advance, after a pre-meeting review of the board deck. This presupposes observers get the board deck (which they typically do for the general session) and enables the observer to influence how the deck is delivered in the meeting [2].

Now, let’s review two scenarios where you almost certainly want to provide a board observer with more leeway.

  • Debt providers. While they may not own equity, they may have millions to scores of millions of dollars invested in the company as well as restrictive covenants that can trigger a loan default. On the theory of “always be nice to people who can bankrupt your company,” I would provide more space here [3].
  • Strategic investors. Strategics may decline board seats they’d otherwise be offered, and opt for observer rights in order to limit liability exposure [4] and avoid conflict of interest concerns. On the theory of “always be nice to people who might buy your company,” I’d allow strategics more space as well, particularly if the designated observer is an expert in the market [5].

Note that if your board has a strong, active, independent chairperson, then they will probably handle any issues for you. But, in my experience, most VC-backed boards don’t have one and only some PE boards do [6].

Some CEOs choose to adopt additional rules for observers:

  • Allowing observers to attend only via Zoom, even if the meeting is live
  • Reserving seats at the table for directors and management, asking observers to sit in chairs along the outside of the room

This can be seen as harsh, but I’ve seen meetings where early-arriving observers take primo seats at the table, relegating directors to the fringe, and that doesn’t work well either. Also, with some companies, when you add up founders, management, directors, and observers, you can get 20+ people in the room, and meeting dynamics become an issue.

Whatever rules you pick, use common sense in picking them, and be respectful in applying them. The best time to discuss rules is while you’re still negotiating the terms sheet [7]. Once a board gets in the habit of treating observers like directors, it can be hard to break. So from the outset, you should be ready to set norms for observers. Talk to new observers in advance so you know they understand the rules. And then respectfully enforce them if they get violated in the meeting.

Most of all, don’t be so busy ensuring that your observers primarily observe that you forget to rely on them when their expertise can help. The point is to have a quality meeting, leverage all the talent in the room — including the partner at your corporate law firm who’s typically taking the minutes [8] — all while respecting the highly negotiated agreements that determine the structure of your board.

# # #

Notes

Thanks to Martin Fincham, Jeff Higgins, and Bob Clarkson for their feedback on an early draft.

[1] This post is written largely for VC-backed boards where there is often a cat-herding problem. If you have a strong, independent chair, they will usually herd the cats for you. But when the founder is the chair — and they don’t visibly “switch hats” during the meeting to act in both roles — it’s effectively the same as having no chair. In boards where a PE firm has a controlling interest, the deal partner is the de facto chair (as well as majority owner) and, like most everything else, it’s really up to them to set the rules for observers.

[2] And implies the need to ensure there is a confidentiality agreement in place with the observer and/or their parent entity. As a friend pointed out: directors have legal agreements, why shouldn’t observers?

[3] And, having done some consulting on the venture debt side, I must say I’ve been surprised at how little respect some investors show to debt providers. While their IRR may not be as high and their MBAs not as shiny, if you start breaking loan covenants, your debt provider will have discretion on whether to call your loan and potentially bankrupt and/or be in control of your company. Be nice. They may be quiet, but they carry very big sticks.

[4] As the deepest pocket around the table.

[5] And/or have rights of first refusal on a future financing round or sale. And where the partnership may be operational as well (e.g., technology sharing, distribution channels).

[6] In my experience the strong, independent chair model seems a bigger thing in Europe than in the US, and bigger in PE than VC.

[7] This is not to suggest that they get codified in the terms sheet, but simply to have a discussion about the role of observers with someone who’s asking for observer rights.

[8] This is more of a US tradition than a European one. In the US, it’s common for the partner on the account from your corporate law firm to attend your board meetings and record the minutes.

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Marketing Lessons from the Grateful Dead by Scott and Halligan: A Belated Book Review

Posted on October 7, 2024 | 3 comments

Since It Costs A Lot to Win, and Even More to Lose [1]

It’s hard for a DNA-level marketer and inveterate deadhead [2] to review a book that fuses both. While I first read Marketing Lessons from the Grateful Dead not long after its publication in 2010, I’d never wanted to write about it. There was too much to say, the subject too close to home, and the Dead were becoming passé anyway — who’d want to learn lessons from a band that supposedly peaked on 5/8/77 and that played its last show on 7/9/95?

Since then, three things happened:

  • Since 2015, John Mayer has breathed new life into the band, bringing new and younger fans to the community. Dead tribute bands blossomed and now play at swanky Nantucket venues [3]. My son started to borrow my old t-shirts to attend NYU college parties. Unexpectedly, the Dead became cool again.
  • I internalized that one of the authors, Brian Halligan, was the founder/CEO of HubSpot and that should, well, automatically make the book significant. [4] [5]
  • I recently had a series of conversations with Jacquelle Amankonah Horton, the dynamic founder of Fave, where I found myself talking about community to someone in the music business, something I find pretty much impossible to do without talking about the Dead. Those chats re-energized me on the whole topic.

So here we are. Let’s do my long overdue review of Marketing Lessons from the Grateful Dead.

Before diving in, let’s note that this book is not the only attempt to take business lessons from the Dead. Other notable efforts include:

Once in a While You Get Shown the Light in the Strangest of Places [9]

So, does this book show us the Dead’s marketing light in a way that can be applied more generally to business? Yes. It does. Though, to split hairs, I’d argue it’s more a book about strategy than marketing [10].

The book is structured in three sections. Each chapter discusses a principle from the Dead and a company that demonstrates the principle. While the chapters-as-lessons structure works, the consistent alternation between principles and examples makes the book feel somewhat formulaic. And, because tech changes a lot in 15 years, while the principles are timeless, the examples are often not (e.g., Mashable, MySQL, StumbleUpon) [11].

The first section takes lessons from the band:

  • Create a unique business model. The Dead made money selling tickets, not albums. This was, and is, pretty unusual in the music business.
  • Choose memorable brand names. The Grateful Dead is a memorable name, and far superior to their previous one, The Warlocks.
  • Build a diverse team. The musicians came from different backgrounds. Garcia loved bluegrass, Lesh was trained in classical jazz, and Pigpen was a blues harmonica player. You can get a 1+1 = 3 effect from the fusion.
  • Be yourself. The Dead were authentic in general and transparent about mistakes.
  • Experiment, experiment, experiment. A product of the Acid Tests, the band was born experimental and improvisational. They were always trying new and creative things (e.g., a song in 11/8 time).
  • Embrace technology. The most notable example was The Wall of Sound, a 600-speaker public address system that delivered unparalleled sound quality (and took four semi trucks to carry), but quickly proved impractical for a touring band [12] [13].
  • Establish a new category. The Dead defined a new category of music, which only after several decades got a name (“jam bands”). They were very much a category creation story [14].

The second section takes lessons from the fans:

  • Encourage eccentricity. Eccentricity was embraced by the band and its fans, allowing everyone to be themselves.
  • Bring people on an odyssey. The Dead, starting with a mailing list hooked to a San Rafael post office box, made fans an equal part in the journey (aka, the long strange trip).
  • Put fans in the front row. The band set up their own direct ticketing operation to ensure fans fair access to tickets [15].
  • Build a following. The Dead were pioneers in database marketing (and subsequent techniques) to cultivate the fan base.

The last section takes lessons from the business:

  • Cut out the middleman. Their direct ticketing operation not only enabled fair access, but it reduced costs, allowing the band to gross 100% of ticket sales.
  • Free your content. The Dead allowed fans to tape concerts, nearly unique in the industry, and an open source approach that helped new fans enter the scene.
  • Be spreadable. Concert tapes became collectibles that were copied and traded [16], whether between individuals or in Shakedown Street swap meets before and after shows.
  • Upgrade to premium. While the band allowed taping, they nevertheless released live albums, with amazing sound quality such as Europe 72 or Skull and Roses [17].
  • Loosen up your brand. While the Dead had standard icons, they defined a broad visual style and allowed improvisation within it. Contrast this to typically strict corporate branding style guides that stifle creativity in the name of consistency [18].
  • Partner with entrepreneurs. Rather than ban the use of their imagery, the Dead licensed it to entrepreneurs who could make and sell their own merch.
  • Give back. From benefit concerts to community support to the Rex Foundation, the Dead gave back, long before it was corporate-fashionable to do so.
  • Do what you love. My survivor bias detector triggers whenever I hear this, but the book’s point is more fundamental: if they didn’t love what they did, they couldn’t have kept doing it for more than 2,300 concerts.

Sometimes We Walk Alone [19]

When writing about the Dead, most people capture the contrarian, rule-breaking nature of the band. It’s hard to miss. The book does that and extracts 19 individual lessons that can be taken from the Dead’s success. Frankly, I’d have preferred if they took fewer lessons and examined them in more depth, as does Everything I Know About Business I Learned from The Grateful Dead.

What the book really misses, however, is the strategic consistency across the lessons. Using the language of Richard Rumelt, the book notes 19 different actions undertaken by the Dead, but fails to recognize that they are coherent actions driven by an overall guiding policy. Much as Costco works spectacularly well not because of the fifty things they do differently, but because of how those fifty things work together, so it is with the Dead.

The improvisational format means every show is different. That enables fans to attend consecutive shows, which enables fans to tour with the band, which in turn enables the Shakedown Street tailgates and community. The ability to tape concerts combined with the improvisational format means that each show is unique and ergo recordings become collectibles, further enabling the community. Licensing merchandising rights to small vendors enables the tailgate scene and nomadic vendors, who can effectively earn a living touring with the band (and using proceeds to buy tickets). Commitment to fan experience means playing small venues, and improvisational shows enables playing small venues for consecutive nights. This enables the community scene while the direct ticket operation keeps ticket prices reasonable despite the restricted supply.

You can allow taping, but if every show is the same, the tapes won’t be valued. You can play small venues, but if you don’t control ticket sales, pricing will box out your best fans. You can play in an improvisational format, but if you don’t repeat nights at venues and move in slow and systematic fashion, you won’t enable fans touring with the band and the community parking lot scene.

It is not any one of the lessons that matters. It is the strategic consistency across them that creates the magic.

Switching to Blue Ocean Strategy as my strategic reference, the Dead re-invented rock music in the same way that Cirque du Soleil re-invented the circus. They took the fundamental levers of the business (what the authors call a strategy canvas) and reset them to create an entirely different type of product.

For the Dead, this is best reflected by the old deadhead saying, “there is nothing like a Grateful Dead concert.” That’s because the levers are set differently.

Come and Join the Party

I’ll conclude with the original invitation to the Grateful Dead party: the first verse of The Golden Road to Unlimited Devotion, the first song of their first album. A song about The Summer of Love [20].

See that girl, bare-footin’ along,
Whistlin’ and singin’, she’s a carryin’ on.
There’s laughing in her eyes, dancing in her feet,
She’s a neon-light diamond and she can live on the street.
Hey, hey, hey come right away.
Come and join the party, every day.

That invitation, some 57 years later, remains open.

# # #

Notes

[1] Opening line of Deal, an upbeat song in the band’s Americana catalog. Guitar players (or those interested in music) should check out this Guitar Teacher Reacts video by Michael Palmisano.

[2] 300 or so shows and counting, including all variations.

[3] I’ll refer to the Dead as a capstone term for The Grateful Dead, the Other Ones, The Dead, Furthur, Fare Thee Well, Dead & Company, and other variations. When a band is 50+ years old, you can end up with numerous incarnations.

[4] I knew it in 2010, but somehow forgot it over the years and was frankly surprised to rediscover it only fairly recently.

[5] And the co-author, David Meerman Scott, is no schmo. He’s a well-known marketing author and speaker.

[6] The general idea being that all strategy is improvisation because things change so quickly, and ergo that companies should view strategy as structured chaos.

[7] “So can I go into the show,” to complete the famous fan quote from the The Grateful Dead Movie.

[8] Surprisngly, two of the three authors were at the Theoretical Division, Center for Nonlinear Studies at Los Alamos National Lab. Technically, this paper isn’t really trying to extract business lessons from the Dead, but I think we find one anyway in that fundamental tension, which in software would be expressed by “what we want to build” vs. “what they want to use.”

[9] One of the most-quoted Dead lyrics, from Scarlet Begonias. The complete line is “once in a while you [can] get shown the light, in the strangest of places if you look at right.” In 1976, they inserted the [can], which subtly changed the meaning, for the worse in my opinion. But to demonstate the depth of the Dead rabbit hole, go to the Good Old Grateful Deadcast for a two-hour exploration of this one song.

[10] Strategy is a little tricky to classify. Corporate strategy is definitionally company-level and I’d classify most of the lessons in this book as corporate strategy, not marketing strategy. For those who consider corporate strategy formulation a marketing duty (and I’m one of them), remember that marketing (or corporate development) typically drives the strategy formulation process (e.g., the offsite, the agenda, the topics, the pre-reading and data). But driving the process and “owning strategy” (i.e., its result) are two different things.

[11] Timeless principles can hopefully be illustrated with timeless examples. They did this in cases (e.g., Ronald McDonald house), but perhaps the temptation to use hot contemporary examples (that invariably date the work) was too strong. Songwriters face the same tension and Dead lyricist Robert Hunter did a fantastic job of resisting it, writing timeless lyrics as a result. In fact, the famous spat that ended collaboration between Hunter and Bob Weir was over Weir’s insertion of “Jump like a Willys in four-wheel drive” into Sugar Magnolia. Hunter strongly objected, I’m guessing, not only for artistic reasons, but because it would date the lyrics.

[12] A short video overview of the three-story Wall of Sound is provided here.

[13] Some enthusiastic fans recently built a half-scale wall of sound.

[14] Dispelling the myth that the category name matters enormously. Focus on building the category, the name can come later.

[15] While Billy Joel never tried to disintermediate ticket sellers, he does seem to have a fans in the first row policy as well. Few others do.

[16] In the analog tape world, copying was not lossless, so tapers would careful try to track the “generation” of the tape (original, copy, copy of copy, etc.)

[17] The amazing quality was achieved not only through high-quality audio equipment, but also through some level of studio doctoring of the recordings, e.g., overdubs.

[18] My definition of visual branding is: do we look like us? Attaining this goal is typically done via strict standards, but a few organizations manage to define a broader look and allow innovation within. The Dead were great at this. Salesforce does a pretty good job as well.

[19] From Eyes of the World.

[20] The Golden Road to Unlimited Devotion. The Summer of Love was also the inspiration for the more famous, San Francisco Be Sure to Wear Flowers in Your Hair by Scott McKenzie, and one far more famous song than that, All You Need Is Love by the Beatles.

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We Are Not The Same: The Obligatory Post on “Founder Mode”

Posted on September 7, 2024 | 7 comments

[Updated 9/23 to include link to a Brian Chesky interview discussing Founder Mode.]

Founder mode became all the rage last week, following a Brian Chesky speech (whose contents are seemingly not available online) and a Paul Graham blog post about that speech.

Since everyone’s weighing in on founder mode, and a few long-term readers have specifically asked for my take, that will be the subject of this post.

Founder-mode is defined in opposition to manager-mode, the conventional wisdom as taught in business schools, about how to manage an organization. The basic idea is that b-school teaches managers to delegate and empower, lest they be guilty of micromanagement. But, in founder mode, founders dive heroically into details penetrating the gaslighting of their value-destroying C-level execs, which include — and this is an actual quote — “some of the most skillful liars in the world.”

Let me start by saying I have a 270+ degree view on this problem: I advise and sit on boards (so a well meaning advice giver), I’ve been the CEO of two startups, and I’ve also been one of those (presumably duplicitous) C-level execs. But the one thing I’ve not been is a founder. I’ve worked with plenty of them. I’ve been appointed CEO of a company with a founder staying on the team for years alongside me.

Without re-stating the article or the debate about it, let’s just cut directly to my take:

First, we are not the same. It’s an excellent point and one that needs stating. Now, usually I cover it from the other side. And I’ve gotten myself into (at times, deep) trouble by not recognizing these differences. As a professional manager:

  • You have less moral authority to drive change. It’s not your baby after all. You have positional power, but not necessarily moral authority.
  • You are replaceable, some might say disposable. You’ve been hired to do a job and we can hire someone else if and when we need to.
  • You get fewer mulligans. You have more short-term accountability. Hired CEOs should think in quarters. Founders (perhaps unless you’re public) should think in years. Or maybe even eras.
  • You are assumed to be around for an evolutionary phase. If you’re proven in the $20 to $100M size range, maybe we run with you to $200M. But at some scale, unless you’re absolutely crushing it, the board will ask if now’s the right time to hire the next-phase booster CEO.

Second, founders should therefore manage differently from professional managers. Why wouldn’t they? They have more moral authority. They are forever. They are irreplaceable. They get more “lives” as a result. And they have no “sell by” date stamped on their forehead. They are — and I think A16Z had a lot to do with swinging this pendulum back — presumed to be the best person to run the company. Just knowing these differences, how could you ever argue that founders should run a company the same way as a professional manager?

Third, I find most of the arguments against the conventional management wisdom to be strawmen. In business school, I wasn’t taught to never do skip-level meetings or to only meet with the executive staff. I did learn, from both school and work that “listen bottom-up, direct top-down” was a great way of operating. I wasn’t taught to hire great people and get out of their way. I was taught to try and make a distinction between delegation and abdication because you need to empower executives to take on their own challenges, but still hold them accountable for results.

I wasn’t taught that you couldn’t have 60 direct reports, but we did discuss the pros and cons of a large span of control. (And personally, I’ve always hated 1-1s but that started back when I was in technical support and forced to have them with my manager.) I did learn that managers would game me with metrics (i.e., “what gets measured, gets managed” — and not always in a good way). And I did learn to use metrics and surveys to see inside organizations and cut through the layers and find out what customers and employees were thinking.

I take massive exception to the characterization of C-level execs as gaslighters and liars. Yes, they try to paint their organization in the most positive possible way, but the good ones understand the difference between spin and lies. And they answer direct questions with short, direct answers.

Now I don’t doubt what Graham says is true. That many founders get well meaning advice about becoming more hands-off with the business and that can result in founders feeling pushed up and out of their own businesses. And I do believe that people are too quick to accuse bosses of micromanagement — and bosses too quick not to push back.

Aside/example, back when I was a $1B CMO: “Well WTF is my job anyway if not to ensure all our marketing output is of high quality? The marketing quality buck stops here. And who is some PR flack with two years’ experience to accuse me of micromanagement? And, in a true quote: “you say this is a hostile work environment? Well, let me think. Actually, you know what? I want it to be a hostile work environment for people who write like you do.” Yes, I wasn’t about to win any sensitivity awards, but I did have a sense for what my job was, despite the hinderance of being both C-level and an MBA.

But I feel like it’s a giant game of telephone where the signal gets lost across the hops. Think: yes, you need to empower people more and I might have said “get out of their way,” but I never actually meant to not inspect their work or meet with their direct reports. I suppose the real moral here is to have deep conversations with your advisors. So you get beyond the slogans and soundbites into what they really mean. For what it’s worth, I’d argue that Chesky seems to agree, based on this video released subsequent to the Founder Mode brouhaha.

While Silicon Valley is the world’s finest innovation machine and one of the world’s finest wealth creation machines, I don’t think we’re a paragon of managerial practice. Thus, to infer causality between “founder mode” and “great businesses” is a bridge too far. We make great businesses. We have some great managerial ideas (e.g., OKRs, pod organizations, or going back to shortly after the big bang, The HP Way). We’re strong on disruptive strategies and systematic expansion strategies. But to say that great technology businesses were created because of, irrelevant to, or in spite of our management practices, I’m not sure. Don’t be too quick with invoking post hoc, ergo propter hoc when you see an appealing idea in Silicon Valley.

I’ll close by citing one response to Founder Mode that takes a data driven approach to these questions, based on research with 122 founders, 50 personality elements, and 46 different areas of 360-degree feedback. It’s an article worth reading and concludes that the benefits of founder mode are largely a myth.

Much like the myth — that I first learned about in business school — that captains should grab the yoke and fly the plane alone in an emergency. It turns out that cockpit crews get far better performance by maximizing teamwork and communication in emergency situations. Coincidentally, this practice is called CRM (crew resource management).

I understand the attraction of founder mode. It sounds cool. But while it’s more romantic to imagine the founder grabbing the yoke to drive the company, it’s more effective to have a strong team working together to face challenges.

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Startup Century: A New Book on Technology Policy by Balderton’s James Wise

Posted on February 14, 2024 | Leave a comment

Today is the US launch of Startup Century, a new (and debut) book by Balderton partner James Wise. The book’s subtitle provides a great clue to its content: why we’re all becoming entrepreneurs — and how to make it work for everyone.

This is neither a how-to book on building startups nor self-interested VC propaganda designed to foster more startup activity. More than anything, I’d say it’s a public policy book that includes a strong dose of technology history. The book is designed to help us first extrapolate possible future scenarios, and then select policies that drive us towards the more positive outcomes on the spectrum. The book doesn’t argue that society should trend towards entrepreneurialism, it presents a matter-of-fact case that it is doing so inexorably, for both better and worse. It then asks a series of “so what should we do about that” questions that take us into public policy.

Everyday-Everyone Entrepreneurship

The world envisioned is one of everyday-everyone entrepreneurship, which James defines as a state where people:

  • Have meaningful ownership of what they produce.
  • Earn in a proportional way to their (or their product’s) success.
  • Can be self-directed, at least most of the time.
  • Can choose how to solve a problem, and with whom to work to solve it.

What I like best about the book is that it doesn’t tap dance around difficult questions of societal structure and power, both past and future. You cannot discuss this kind of material without considering winners and losers. While the book certainly has an optimistic bent, it also provokes the reader to consider the alternatives. Excerpt:

“[Bloodworth’s] conclusion [in Hired] was that many of the rights and benefits the labor movements and trade unions had won, over several generations — from sick pay and holidays to maternity and paternity leave, pensions, and safe, civilized, working conditions — had been undermined, not by political opposition but by technological innovation and and ruthlessly demanding business models.”

For example, income security seems out the window in the eat-what-you-kill world of individual entrepreneurship. But was it already out the window anyway with the steady erosion of the social contract between employer and employee? And to the public policy angle, what should we, as a society, do about it? 

Or, more topically, will AI create more jobs than it displaces — as James suggests and has been the historical pattern with new, disruptive technologies? Or will we eventually find ourselves in some more dystopian Logan’s Run type scenario?

After an in-depth review of several policy areas, the book concludes with An Entrepreneur’s Manifesto that offers sixteen specific policy suggestions grouped into three areas: find work, fair work, and fulfilling work. You can learn more about the manifesto by watching this lecture.

For more information on the book, you can read this Publisher’s Weekly review, peruse this Q&A with James, or even chat with the book.

Having a nice chat with the book itself.

My Overall Take

Overall, Startup Century is a worthy read — the history lessons alone are worth the price of admission. The public policy is less my passion, but the book nevertheless poses important policy questions and considers them in depth and with thoughtfulness that I have not previously encountered. 

As James notes, “in his writings on capitalism, […] Schumpeter both championed capitalism and predicted its demise, […] warning that capitalism would inevitably morph into cronyism and give rise to oligopolies.” 

Let us hope that everyday-everyone entrepreneurship can help prevent that demise and that we can collectively develop answers to James’ questions that lead us together, and successfully, into the startup century.

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