“An entrepreneur is someone who has lost one, won one, and started at third company,” I said once to my new client.
“I’ve lost two and started a third, does that count?” (yes, that counts.)
There are dreamers and doers. The first-time entrepreneur could be either — only time and experience and actions will tell.
Dreamers think large, then start and stop. They get derailed. Something always gets in the way of the execution, the doing, of the dream. One corporate executive, fleeing into the independence of consulting, spent three months setting up his office, stationery and fax machine. Of course, he never became a consultant and was re-employed within months.
Some dreamers imagine a huge world-changing company, requiring tens of millions of dollars just to begin, and which are 5-10 years ahead of the market adoption they need to create this change. Many of these entrepreneurs are highly intelligent visionaries who can see and describe what is needed. Most of them cannot implement.
A doer with such an overwhelming vision builds the pieces that can be adopted by the market, watches the changes brought about by that adoption, then builds the next and the next, in sequence, as the market is ready for each next step. And many of the next steps are adjacent to his original vision, or a new technology arrives that changes the vision itself.
Doers build a product or service, march out and test it (and their idea about it) in the marketplace, learn, re-learn and keep going. They have a vision, but they are pragmatic. They trust their instincts and decisions, but verify their assumptions and set a great deal of others’ rewards on performance.
What realism teaches
This is the realism of a successful CEO. Each company they build teaches them the next lessons they need to know. Each company they lose can teach them more than the company that wins an exit. The company that wins an exit but creates no wealth for the founders, and no opportunity to launch the next new thing, teaches more than all the other attempts, as it offers the ultimate in realism — that the control of the business (its capital, stock, voting and market timing) and its success must set up the next business, or philanthropy, or new life, and then the next.
One of my favorite clients built her software company, watched her channels and her margins, made smart deals, survived her divorce, kept focused through the trials of the company’s growth (including slowing it down when appropriate), and sold her company, all in four years. She moved on with her tens of millions of dollars to build a non-profit in education. She surrounded herself with the best advisors and supporters, and wasn’t afraid to ask for the help she needed. She did not shy away from the realities of what it takes to grow and sell a business, and she stayed focused to the end.
Each venture teaches the entrepreneurial doer more about himself or herself – his strengths, the roles he wanted but didn’t enjoy (CEO? COO? CTO?), his utter weaknesses that he should always leave to trusted others.
A CEO must be a realist about everything: capital, stock, hiring, dysfunctional team members, the market, the moving trends that affect the business, all the components on the org chart, the silos of management, and the outside forces he cannot foresee. If a CEO takes on a weak partner (perhaps a friend), or cedes management to an outsider, he will need to keep any eye on the partner or the outsider.
Another of my favorite clients is on Company #7. Only one failed, and it took the tech bubble bursting to bring that one down. He has a talent for market timing, can build his own technology and market it – a rare combination. He is fast and “rough” – he puts his technology in the marketplace to see the response, then adjusts his vision, his opinions and his product to meet the market demand.
He can recognize a small, back-bedroom cash machine opportunity, and a large acquisition exit business, and knows how much of his time and resources to focus on each. He partners well with other successful entrepreneurs like himself. But for all his talents, his success has always been based on executing quickly on a tested idea in an empty market space. He is a premier doer.
Taking action on the realities
It is this focus and discipline, this willingness to see the realities in front of us, and to adjust to them directly, taking action, that makes the successful CEO.