Lose Yourself

In 1995, when I founded a start-up ASP technology services company, at the age of 26, I was very fortunate.  Not only did my family and friends support me to the tune of several hundred thousand dollars, but in 1996, we received multiple term sheets for several million dollars from some of the most prestigious early stage VCs at that time.  One termsheet had a catch though: I needed to hire a CEO to replace myself.  Hire someone better than myself to run the company?  It was a no brainer, we took the termsheet.

It’s the old Peter Principle: bureaucrats, who are more interested in growing their responsibilities, hire less competent people.   More important to me is the rules other implication: founder-owners, that have an interest in growing their company, hire more competent people than themselves.

As a VC now, on a personal level, I am very reluctant to support the termination of a founder at an early stage of a business unnecessarily.  More than a couple times, I have had founders that only under severe pressure will hire managers that are better than they are for certain roles.  This is nerve wracking to me because I know that this test (hiring managers that are more competent than yourself) is the first, and sometimes last, test of competency for a founder-CEO and their team.  And I want them to pass that test because I like and respect the people I invest in, and I want them to succeed and grow wealthy.  The harsh reality is that the slower it takes a founder to come to the realization to bring on the best in class managers, the lower the ultimate value of the company will be and the smaller the economic rewards will be for the founder--and his backers of course. 

So now as a VC on a professional level, for founders that can’t or won’t hire great managerial talent, it’s a no brainer as well.  Which one are you, founder-owner or bureaucrat?

So in the immortal words of white rapper Eminen's Lose Yourself:

Look, if you had one shot, one opportunity
To seize everything you ever wanted-One moment
Would you capture it or just let it slip?

Don't let it slip. Hire managers more competent than yourself, yo!