Ben Horowitz on CEO succession in Enterpreneurial Orgs and Startups

It is not often that I find myself disagreeing in some way with Ben Horowitz. I have found his blogs insightful and useful, and recommend his writing regularly. But this morning, his latest blog distracted me from the events of my day. Lets deal with it and then get on with the day.

See http://bhorowitz.com/2010/12/16/ones-and-twos/ for what Ben Horowitz has to say on CEO succession.

I think he misses one factor and makes one mistake.

His mistake.
He applies Jim Collins’ Good to Great findings from large established corporations with significant multi-year histories to start ups and entrepreneurial organizations. Although at first sight, this makes sense, my own experience and the insights of others, make it clear that these are very different organizational worlds. The factor of inside knowledge is hugely important in big corporations with a long track record, partly because part of this knowledge consists of established internal and external relationships. These are crucial to the success of the large organization.
(As a side note, Collins also talks about 5 factor leadership, and his succession perspective for this corporations needs to be placed in this context.)

The missing factor
Start ups often need to build dramatically new external relationships, rather than having a long history of effective ones. An new outside CEO can often bring these to a start up and ensure that its moves through its stage of the growth cycle by establishing / negotiating these relationships. The CEO’s part history in these relationships is often the very reason these outside individuals even consider the possibility of a relationship with the start up.. An insider might not have these connections or the personal trust which fuels the dialogue that establishes these required B to B connections.

CEO succession is a hard issue. Careful thought and risk taking is always a part of it, whether the people make the choice are members of the board of an established corporation, or investors in / advisors to an entrepreneurial start up.

Both Ben Horowitz and Jim Collins have something to contribute to the dialogue that must occur when this choice must be faced. But generalizing findings from one sample – large established corporations – to another – entrepreneurial start ups – does not help clarify this difficult issue. Ben’s Ones / Twos distinction is grist of the mill of these dialogues, but only part of the needed grist.

December is re-evaluation time

We started to get serious about our start up in August. Finished the long / summary bus plan in Sept / started to move things forward in Sept and have been trying to get things going since then

Little forward movement despite what seems like endless effort, networking, marketing etc

So yesterday was deep discouragement day.
Finally kicked it by watching a 1933 John Wayne movie (Hurricane Express) last night.
But December is re-evaluation and re-orientation month for me.
Am into serious thought / dialogue about what we are up to and whether or not it will work.
Too early too tell where it will come out. But the process feels right, even as we persist on our current path at the same time.
Back to the sales calls … …

Focus, Focus, Focus

1) One of the distinguishing characteristics of effective people is their ability to ruthlessly focus. Find that I cannot do that. I simply have and enjoy two many interests that detract me from the ruthless pursuit of my start up success. Have to learn how to balance the two drives in a better fashion. So many hours each day spent in ruthless pursuit has to be the foundation of time spent on other interests.

2) Took a booth at a networking event last night. Turned out it was more like in an-house party for the folks in a building than a business networking event. They all more or less knew each other, and spend time connecting with each other and engaging in “fun” chat. Some of the other folks who paid for a booth shared my first frustration.

Then on the drive home realized that I had learned something. Because of the dynamics of this group, this was a tough audience. Our booth material did not cut it. It completely failed with this audience. We could not attract them away from their social interests. That tells me that the message we are using is not cutting it in general. Need to par it down. Need to increase its punch. Need to be more “provoking”. Finally, really need to focus on those folks who are our “buying” audience.

Always something positive in every experience if you chose to make it so.