Earlier in the week we mentioned a preview of a presentation Steve Blank is giving this Friday at the Startup Lessons Learned conference in which he describes how startups and larger companies are unique and have differing needs. One the ways they distinguish themselves from one another is that the roles of executives play out in very different ways, and sometimes startups make the mistake of hiring execs that would fit in better with a larger company. Ben Horowitz of Andreessen Horowitz wrote recently on this very topic and provided some hints to startups looking to hire execs.
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Startups are, by their very nature, young and small in the majority of cases, after all, once you get older and larger, you're not really a startup anymore. With that, they require a different style of leadership than larger companies. Startups need executives who are constantly active and who are hands on, and having passion for the company is a serious plus. The more the executives reflect the attitudes of the founding entrepreneurs, the better.
This differs greatly from the atmosphere created for executives at large companies. As Horowitz recalls, when he worked for Hewlett Packard, his job was driven by the swarm of outside activity which came to him and created his daily work-flow. Less of this, he says, goes on with startups, and at times a new exec not suited for startup culture can find himself feeling a bit like a fish out of water without any clue as to what to actually do. He calls this a "rhythm mismatch."
"Your executive has been conditioned to wait for the emails to come in, wait for the phone to ring, and wait for the meetings to get scheduled. In your company, he will be waiting a long time," writes Horowitz. "If your new exec waits (as per his training), your other employees will become suspicious."
Horowitz also notes that the skill-sets learned and used by executives at larger companies don't usually apply in the same way with startups. Startups are all about building a company, building processes and growing a product and its customer base from the ground up. Large companies passed these steps a long time ago, and their main focus is on repeating and streamlining battle tested processes and business models.
Execs at large companies are good at fine tuning these existing systems, while startups need people who can help mold and create the business' framework for its future as a large company. Steve Blank says that the reason there are disparages and possible conflicts between traditional executives and startup execs is that education is too focused on traditional business practices, and not enough on entrepreneurship.
So how does a startup founder select the right execs to help nurse their fledgling company into a prosperous large business? According to Horowitz, there are two steps needed to assure the right people are hired: and extensive and highly scrutinized hiring process, and dedicated and focused integration of the executive upon hiring.
"Require them to bring a comprehensive set of questions about every thing they heard that day, but did not completely understand. Answer those questions in depth; start with first principles. Bring them up to speed fast. If they don't have any questions, consider firing them. If in 30 days, you don't feel that they are coming up to speed, definitely fire them," says Horowtiz.
It doesn't take a rocket scientist to realize that startups and large businesses are very different and have differing needs, but as Horowitz points out, an impressive resume from a big shot executive can cloud the judgement of some founders when seeking the right executive. While I'm sure there certainly have been acceptions to this theory, success in a large business does not always translate to the startup world, so make sure you know who you're hiring before you waste your time.
Photo by Flickr user wilhei55.
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