The journey of a founder is a transformative one, filled with challenges and opportunities for growth. It's a path that requires constant adaptation and a willingness to embrace new roles. Let's explore the stages of this evolution, the pitfalls to avoid, and the systems that can help navigate the complexities of building a successful business.
The Stages of Business Evolution
1. The Maker
It all starts with building. You create something, gaining traction and achieving initial success. This makes you a "successful maker," but it's only the beginning. The temptation is to keep doing the only thing you know, but for further growth you must move on.
2. The Founder
Traction necessitates formalization. This involves incorporating the business, consulting with lawyers and accountants, and taking on the responsibilities of a founder. The "founder" title is aspirational and the first level up from "maker."
3. The Manager
As success continues, the need for assistance arises. Hiring someone transforms you into a manager. This transition can be difficult, especially for those who excel at making but lack managerial experience. A company could lose its best maker and gain a sub par manager.
4. The CEO
Eventually, hands-on making is no longer feasible. Delegation becomes essential, transforming you into a CEO. This role requires a different skillset, often learned on the job, focusing on strategic direction rather than direct execution.
5. The Business Owner
Years later, the focus shifts towards legacy. Building a strong leadership team and stepping away from day-to-day operations transforms you into a business owner. This is akin to owning a restaurant but not working in it directly.
6. The Entrepreneur
The final stage involves detaching oneself from the business, either through selling or starting another venture. This signifies that the business has become a separate entity, no longer solely defined by the founder's identity.
The Journey's Reality
This journey isn't linear. Some companies might fail early, while others might be acquired at different stages. Co-founders might also follow different paths, with one continuing the journey while the other steps away. However, this entire transformational journey is what it means to be successful.
Avoiding Common Mistakes: The Business as a System
Your Business is Not Your Second Product
A common mistake is treating the business as a product to be engineered. This leads to reinventing the wheel when it comes to business practices. Instead, recognize that a business is a human-powered system, requiring a different approach.
Embrace Existing Systems
Instead of trying to invent everything from scratch, adopt existing business systems and tweak them to fit your needs. This can save time and resources.
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Lean Startup: Ideal for companies seeking rapid scaling.
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Holacracy: Used by companies like Zappos and Spotify.
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EOS (Entrepreneurial Operating System): A comprehensive system supported by books, consultants, and online resources.
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Atlassian Playbook: Offers a collection of different plays for retrospective, recruiting, and various components.
Choosing a well-documented system provides access to books, consultants, YouTube videos, and even AI expertise through platforms like ChatGPT. This is akin to using Tailwind CSS instead of building from scratch.
Tools and Tactics for Success
Structure and Organization
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Org Chart: Implement a clear organizational structure early on, even with just a few employees. Identify and give titles to your existing leaders. This clarifies roles and responsibilities. Don't fall into the trap of thinking of start-upy companies being "flat."
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Job Titles: Embrace standardized job titles to provide clarity to employees and facilitate communication within the industry.
Clarity and Vision
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The CEO's Role: Focus on providing clarity and goals for the team.
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Values, Vision, Mission, Goals, Strategy: Define these elements early on to guide the company's direction.
Vision and Mission Hierarchy 1. Values: The company's guiding principles. 2. Vision: A snapshot of the company's future (10 years out). 3. Mission: How to achieve the vision (three-year goals). 4. Strategy: How to achieve the first mission goal. 5. Roadmaps: Quarterly plans derived from the strategy.
- Understanding Customers: Prioritize understanding your customers through qualitative and quantitative data.
Gathering Customer Information 1. Qualitive interviews. 2. Ask for honest reviews. 3. User Researchers interviewing daily
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The Explore, Expand, Extract Framework: Adapt your approach based on the company's stage.
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Explore: Focus on qualitative feedback.
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Expand: Rapid growth phase.
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Extract: Utilize data for optimization.
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Strategy and Planning
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Strategy Chart: A simple chart with focus/effort on the Y axis to visualize strategic priorities.
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Quarterly Roadmaps: Split roadmaps into different types of jobs (QA, features, process improvements) and assign staff ahead of time.
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Pick Pages: A buffer for new ideas, preventing distractions during the quarter.
Coaching and Evaluation
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Company Values: Define and regularly update company values to reflect the current culture. Make sure they are actionable.
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Skills Map: Use skills maps to assess team strengths and weaknesses.
Compensation and Collaboration
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Salary Data: Utilize salary data from reputable sources to ensure fair compensation.
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Human User Guide (HUG): Create a personal guide for each employee, outlining their working style and preferences.
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Team Agreements: Establish team contracts outlining collaboration norms.
Discovery and Development
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Double Diamond: Utilize this framework to improve projects.
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Desk research
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Stakeholder Interviews
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User Research
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Solution Statements: You can turn data from research into solution statements.
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Prototype: Split the development phase, create a quick prototype as quickly as possible.
Last Thoughts
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Business vs. Baby: Strive to view the business as a separate entity to make sound financial decisions.
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Delegation and Leadership: Build a strong leadership team to ensure the business can operate independently.
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Continuous Learning: Stay informed by reading relevant books and resources.
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