Having no customers, no product and therefore no real problems (yet), I’ve had the luxury this week to think about the kind of company I want to build. When I left Reuters in 1998 to start my first business, I had the idea that I was going to build a company that I would be proud to be a part of until my old age (what was I thinking?), and one in which the staff came first and profits second. Of course, you quickly learn that without profits it’s nigh on impossible to take care of your staff, and that working forever maybe isn’t such a great outcome after all.
Before getting to the question of what kind of business I want to build, I realised I had to answer the question “what kind of founder am I?”. Harvard professor Noam Wasserman published some interesting research about founders which he refers to as the “Rich versus King” phenomenon, where he describes entrepreneurs as typically being one of two types – the first wants to build a business where they themselves are at the ‘centre of the universe’ (King), whereas the other is just in it for the money (Rich). (Bill Gates, Michael Dell, Larry Ellison are amongst the more notable exceptions, but these guys are obviously few and far between). Given my early attitudes to my first business, I think I wanted to be the King. But I soon learnt I didn’t make a very good King, and in any case being King wasn’t all it was cracked up to be – you have all kinds of tedious stuff to deal with in a start-up. Thankfully one of our co-founders stepped into the role of CEO before I could do too much damage, and I got on with the arguably more important and certainly more interesting (for me at least) business of building out our product line.
I came across Professor Wasserman’s research through Jason Cohen’s blog – Jason started a company that develops code review software and subsequently sold the business to AutomatedQA. In his article Rich vs. King in the Real World: Why I sold my company, he talks candidly about his decision to sell his company and in particular about the non-linear relationship between cash in the bank and lifestyle. Reading his article helped me see that starting a new business is (for me) fundamentally about making money. Sorry if that maybe offends some of my more altruistic readers, but I think it is important to get clear about motives, as a mis-assessment here can have nasty long-term side effects.
And Now for the Good News …
Thankfully, in my experience at least, there’s a clear correlation between driving a business to achieve strong financial returns, on the one hand, and establishing a remarkable place to work, with remarkable products and remarkable people, having remarkable customer relationships through remarkable customer support, on the other. Working to put those things in place makes the hard graft of building a successful business more like an adventure and less a death-march to exit, for all concerned. So despite my capitalist motives, my goal is to build a remarkable place to work.
In November 2009, I had the pleasure of hearing Ryan Carson speak at the 2009 Business of Software Conference, where he talked about building a remarkable company (in fact I think the talk was entitled “How to give your company soul” – there’s a summary of his talk on the BoS conference wiki). Although his proposition was that you need all eight of his conditions for true remarkability, a few specific things stuck out for me:
- Lead with drive and passion – it’s obviously easier for your team (and the market) to follow that kind of leadership
- Love your customers – never, ever let your staff complain about them (they pay everyone’s salary for goodness sake!)
- Treat your team members like royalty – make sure they have the best gear, facilities, environment, etc you can afford
- Don’t just think about your business – find a way to somehow give back to the community at large
Of course, as Ryan points out, it goes without saying that you also need to have a “kick-ass” product. Just need to work out what that product is…