8 ms·
As an old guy, let me share with you which of these I think was the biggest lesson for me: -- We do not need to be lead by business people. MY new rule for st
by MCRed 11y ago
As an old guy, let me share with you which of these I think was the biggest lesson for me:
-- We do not need to be lead by business people.
MY new rule for startups - the big engineer should be the CEO. You can have a CTO and other engineers. You can have a VP of bizdev or sales. But the big fish needs to be an engineer if you are a tech company. If you are making biotech the big fish needs to have biotech engineering. If you are manufacturing, then the big fish needs to be a manufacturing engineer.
The number one mistake I see startups make (especially when they are started by younger people) is taking some type-A business school graduate and making him the CEO.
This is the cause, ultimately, of most of the failures of startups I've experienced (and I've worked for, founded or worked with a couple dozen.)
Or, as a second order function, type-A business school graduates who have never started a company or worked a real job but do instead work for a VC firm, forcing bad decisions on your company.
Most of the fights between founders are because business guys are forcing bad decisions on the company.
The problem is, business school doesn't teach YOUR business. It teaches general business concepts. These are not difficult for engineers to master.
IT's impossible for these business guys to master engineering. (Yes, 30 years, still haven't seen that- the best ones just find an engineer they trust and get out of the way.)
As an angel investor, if your CEO isn't a geek, I'm not putting my money in. And if you look at the "successes" where this is the case, it's usually an arbitrage opportunity (Eg: somewhere just piling a bunch of money behind a halfway competent business model with half way competent employees is going to make money because the situation is the result of a structural inefficiency, usually caused by government: uber for example.)
- louprado 11y agoAgreed. The main problem is you can lie and game the VC's. "It's called future-selling and everyone does it", a biz-guy once told me. It's not a lie, we are "hacking the interview". Coders like hacking, right ? You see, just rebrand "lies", muddle the context and now your type-A biz co-founder can say anything while his engineer co-founder sits their quietly wondering if this really is normal. I've also heard "I'll stop doing that if it makes you uncomfortable" but once it is part of a person's personality, it can become pathological. They don't even know when they are acting this way. The disconnect comes from engineering environments where there is no Alpha and Beta mindset, only varying degrees of competence. Trust your instincts and conscience. The VC only has a limited time for due-diligence.
- nickpsecurity 11y agoThis is a great article on that which calls it "investor storytime:" http://www.theatlantic.com/technology/archive/2014/08/advertising-is-the-internets-original-sin/376041/ http://www.theatlantic.com/technology/archive/2014/08/advert... I still agree with MCRed's points. Just, as you said, have to watch out for the games people are playing that seem to be working for whatever reason. Note: There was another link I had about one company getting crazy valuations where author showed they're basically telling investors what they want to hear. It broke down the tactics then showed they work too often. Can't find the link.
- jcizzle 11y agoIf I may ask, what have been your successful ventures? How successful? What would you say your net worth is? In other words, to make your argument resonate with me, I'm more interested in how well your belief system has worked for you, as opposed to "number of years experience."
- frign 11y agoUsing the term "net worth" already uncovers the fact that you are a business rat. Let the real engineers do the work and stop stealing their guts. All those business school people ruined the corporate sector to a degree that I find it truly despicable.
- jcizzle 11y agoI'm a programmer. Written 4 programming books - all Amazon best sellers. Just happened to also start running a company. After enough growth, bringing in a business partner to focus on non-engineering tasks was an important step. Having been on both sides, I value both as different skills. One is not inherently better than the other, but I've found that a person who is either and respects the other is often successful. A few million dollars later, I'd say I've been right.
- mangahero 11y agoThis statement is true.
- frign 11y agoI totally agree with you my friend. Same applies to companies literally hoarding lawyers and economists. I don't understand that they do not realize these people bring no benefit to a company other than laying off key people and filling their sentences with "big" buzz-words. I know companies where more people analyze the company's work rather than people actually working.
- fefifofu 11y agoIf you think lawyers aren't useful, then you've never run a business of ANY size. You've also probably haven't completed a significant deal or transaction before. You'd benefit a lot from pairing up with a "business rat" (your words in another comment).