Platt Perspective on Business and Technology

Transitioning into senior management – Part 19: leadership in startups – 3

Posted in job search and career development, startups by Timothy Platt on July 27, 2011

This is my 19th installment in a series on joining and working on a senior executive team, (see my Guide to Effective Job Search and Career Development, postings 158-175 for parts 1-18.) And it is also my third posting in this series on working with startups and early stage businesses as an executive officer.

I started out this set of three by discussing the issues and challenges faced by a first time manager who seeks to found or to help lead a new business (see Part 17: leadership in startups – 1.) I then turned to the issues faced by experienced managers who take on this role, but who are only experienced working in established businesses and who have not worked with a startup or early stage business before (see Part 18: leadership in startups – 2.) I now turn to consider a group of founders and executives that hold special value for venture capitalists and angel investors: serial entrepreneurs. And I start this discussion with what might be considered the context fundamentals.

A startup, and by that I mean any startup is a learning curve experience – always.

• You start out with a prototype blueprint as to what you will offer as your product or service. And it is very common to find yourself fine tuning that initial conceptual model and even significantly adjusting or changing it as you go through the steps involved in converting it into a profitable, marketable offering.
• You start out with a set of ideas and assumptions as to the demographics and identity of your initial target buying audience – your target marketplace. But real world experience often forces a reconsideration of the fundamental assumptions here, and for disruptively innovative offerings it is common to find your most productive customers to fall outside of the expected. Disruptively innovating products and services can often be found to best meet the needs of disruptively innovative customers.
• You may start out with a plan for building your organization and your operational systems, and with a specific initial team roster in mind. Then you find that some things you might have planned on doing and needing early ,can and should be put off or even dropped. You find in the course of your actual hands-on experience that you have to move some steps ahead or add them in as unanticipated but very real requirements now. You find you can not longer count some of the expected members of your team to be there, that you need to bring in different types of early team members than initially anticipated or both.
• Building a startup is all about planning and careful execution, but much of that is about identifying where you can continue as planned, and where and how you need to change from that.

I am writing about the business here, but I am also writing about the entrepreneurs who would build it too, and the basic context that they have to do this in – ongoing and sometimes quite unexpected change, and the pressures that a need to be able to flexibly adapt bring with them.

Angel investors and perhaps even more so, venture capitalists love serial entrepreneurs. Here, it is not always necessary that their earlier startup ventures worked, but it is necessary that they have clearly learned from their earlier experiences – both as to the specific issues they faced and dealt with and in learning how to ride the startup company’s wave of ongoing change and uncertainty.

• What have you learned, positive and negative from working for others?
• How might these lessons learned apply to a startup and build-from-scratch context, and how would you reframe these lessons so they do apply there?
• What have you attempted in earlier startup ventures, and what of that has and has not worked? What lessons have you leaned from all of this, that you can frame in proactive, operational terms for moving forward in a new startup venture, or in participating in an early stage business? I note in this context that a venture capitalist considering an early stage business as an investment, in going to ask a lot of questions about successes and failures, and about lessons learned from both.
• Interpersonal and communications skills can be a lot more important in all of this that the more technical skills. It is in working with others, or failing to effectively do so that most startups that do fail, fail on.

Potential backers see value in serial entrepreneurs and even in the ones that have failed in an earlier attempt when they see evidence of real learning curve experience. Serial entrepreneurs can and do still make mistakes, but they make new ones and do not simply repeat the same old ones. And they have learned about a number of the more serious issues and challenges that can sink a startup and know to avoid them. They know how to develop and maintain a focus on building for a unique value proposition, and with its fulfillment their one priority.

• Basically, this posting is about stepping out of the blindered rut of a former employer’s established systems, corporate culture and table of organization to build with fresh eyes.
• And it is about keeping everything focused on meeting a very particular set of due diligence requirements.
• And it about learning how to do all of this, and to present yourself as the person who can do it.

This ability to communicate and convey is, of course, going to be important if and when you seek out financial backers but it is just as important for bringing in other members of the founding team to round out your core skills and experience set. It is just as important when you reach out to bring in your first employees, and regardless of the level they would work on organizationally. It is just as important as you start reaching out to the marketplace for insight and to make your first sales, and as you gather further insight from your initial experience in that.

I am going to turn away from the special situations of working with a startup or early stage company in the next series installment, to look at the roles that senior executives and business leaders take on as role models. In the context of startups and early stage businesses, I add that this is crucially important. Startups and early stage businesses do not have a steady proven structure with a history to back them in offering a real sense of stability and reliability to the marketplace. That sense of stability and reliability has to come from the founders themselves and from any senior executives they have brought in, and as the business grows from its overall staff and the corporate culture they create and display. I will discuss this set of issues from a wider business and marketplace context of businesses and organizations in general, and with a particular focus on how this sense of stability comes from founders and executives. It comes from their serving as role models and positive examples of doing things right.

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