So, I recently had a coffee meeting with a client and friend. I have known Graham for the past four years now and over that time he and I have — I would like to think — developed a fairly open and honest relationship.
Each year I have worked with Graham and his team on a set of events or activations that they are doing for their clients. Our conversations almost always leave me with a deep and introspective question. At our most recent client briefing meetings, which invariably become long and contemplative coffee meets, he told me about the Founders Trap.
Confession: I am at a personal point of crisis. I have just sold a majority stake in the business I have spent the past decade of my professional life building. As a growth entrepreneur, I have decided to focus the next decade of my life on building a business that is not only scalable & rich with upside but also one that will make an impact in the lives of my countrymen. I have decided to get out of the cigar-smoked filled boardroom and into the narrow streets of the common man.
So, I am back at the early stages again: Working 16hr days. Sleeping just enough for the body to rest so that I am recharged and ready for the next day. Building the team around me so that we can manage the destination for which we are headed and its grueling demands. This stuff is hard.
The hardest part of the growth process — and not matter how many times you go through it, you never get used to it — is learning to let go. Letting go in my mind is single hardest part of the growth. Do it too soon and you set your people up to fail. Leave it too late and you will lose good people and keep the mediocre ones who take comfort in your autocratic style. Timing and talent must be meet at the intersection perfectly.
This is commonly known as the Founders Trap.
My antidote to this trap has been to focus on the component parts of the journey that I can manage and control. So rather than focus my time and energies on the energy depleting stuff I cannot manage or control, I have taken the approach that says frame the context under which the challenge exists. These are my three-main frame setting techniques.
1. Hire Right first time
Almost all growth businesses have the challenge of growth: costs outstrip revenues althroughout the growth curve. Why is Uber — the world’s foremost taxi hailing app — still raising funding? Why would a global business with operations in 59 countries around the world still need cash from funders? Simple. Growth is expensive.
So the tendency of many growth entrepreneurs — specifically in markets where the alternative asset classes like VC are not yet well developed — is to stretch their runway by lowering the cost headcount. This is the typical approach. Hire fewer less competent people and pay them less. Fill the office with warm not the best bodies. Then micro manage those people to achieve above their competence.
Over the past decade building and investing in businesses, I have never seen this work.
When you hire the right people, they will cost more but they will also elevate the level of business performance and challenge you to look at and see through your own weaknesses.
2. Give Freedom (within a framework)
If you were the manager of Real Madrid or Barca, you would want to tell Messi or CR7 how they should score. Only the tactics that the team would use to maximize for them (the strikers) the opportunities to score.
So often as entrepreneurs we hire a Ronaldo or Messi and then want to treat them youth players in the Amazulu FC development squad. Top talent will always leave when you do this.
My experience has taught me that you need to give freedom within a framework. Tell them what the destination is, when you want to get there and how you prefer to get there but then set them loose to pilot the plane. Make the framework clear and allow them the freedom to navigate.
3. Set clear, unambiguous but difficult goals
I am spending a lot of time in meetings. Internal and external. External is important and easy to explain. Part of my role in the firm is to build the future of the firm through relationships, stakeholder engagement and rapport. Internally though my role and function is a lot more nuanced. I am having to ensure that my team is still clear on where we are headed (direction/orientation), why we are headed there (purpose) and what we need as well as by when we must arrive there (strategy).
One spends a lot of time ensuring that this is clear and crystalized for one’s team so that they can get on with the business of rowing us to the destination.
4. Be relentless on Accountability
All the above rest on the foundation of a culture of accountability. If your people are not held accountable for their results and forced to own their performance then you find yourself always micro-managing them on a task basis rather than an outcomes basis. The trick with the accountability is that you must be unrelenting in your performance standards and expectations.
If you are over 2years into your business and finding yourself working in the dawn of day, doing the same tasks and dealing with similar set of issues, you are caught in the founders trap.
Venture Capital. Global Business Speaker.