Why Founders Sometimes Fail as CEOs 0

Writing in TechCrunch, Ben Horowitz offers three reasons why founders fail as CEOs. The most interesting is the third:

  1. The founder doesn’t really want to be CEO. Not every inventor wants to run a company and if you don’t really want to be CEO, your chances for success will be exceptionally low.
  2. The board panics. Sometimes the founder does want to be CEO, but the board sees her making mistakes, panics and replaces her prematurely. This is tragic, but common.
  3. The Product CEO Paradox. Many founders run smack into the Product CEO Paradox, which I explain below.

Why Founders Fail as CEOs TechCrunch Product CEO Paradox

I really respect the wisdom of the CEO who drops out of management to focus on the creative work instead. That’s so smart. Life is short and workdays can be long when you’re doing something you don’t like or do well, and short when you’re doing something you love to do.

I don’t like the second because it’s too narrow. What Ben calls board panic can also be board management. Calling it “panic” implies that the board failed, not the founder-CEO, every time a board removes a CEO who doesn’t want to go. I think founder CEOs who want to manage the company sometimes do a poor job of it.

The third one is the most interesting. Ben explains:

This happens all the time. A founder develops a breakthrough idea and starts a company to build it. As originator of the idea, she works tirelessly to bring it to life by involving herself in every detail of the product to ensure that the execution meets the vision. The product succeeds and the company grows. Then somewhere along the line, employees start complaining that the CEO is paying too much attention to what the employees can do better without her and not enough attention to the rest of the company. The board or CEO Coach then advises the founder to “trust her people and delegate.” And then the product loses focus and starts to look like a camel (a horse built by committee). In the meanwhile, it turns out that the CEO was only world-class at the product, so she effectively transformed herself from an excellent, product-oriented CEO into a crappy, general-purpose CEO. Looks like we need a new CEO.

That’s a brilliant observation. Ben’s highlighting one of those ideas that seem obvious but only after somebody has pointed it out. I think his product CEO paradox is real, and a danger to be aware of and to avoid.

About the Author Tim Berry is the founder of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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