3 ms·

These types of blog posts/articles always make me curious: How were these people able to transition from founders of a tiny company to successfully running and

These types of blog posts/articles always make me curious: How were these people able to transition from founders of a tiny company to successfully running and managing large (people or revenue) companies? Many of them had never done this before so how did they figure out what to do and how to do it? I often think of Zuckerberg or the Collison brothers as examples. They hadn't done anything like this before so how did it work out for them? - Is it survivor bias? - Were the ideas and the execution so good at the beginning that once the company was up and running it didn't matter if they made mistakes? - Did they have excellent advisors/mentors? If so, how did they know who to listen to? (I think of the scene in The Social Network where Justin Timberlake advises Jesse Eisenberg to go in wearing pyjamas to a VC meeting) - First mover advantage? (not the case for FB or Stripe as far as I can tell) All of the above comes from reading this article: https://nymag.com/intelligencer/2018/10/andrew-mason-on-groupon.html https://nymag.com/intelligencer/2018/10/andrew-mason-on-grou... In it, Andrew Mason talks about how Groupon "followed the data" into offering more and more deals to the point that they imploded the company. He, like Zuck and the Collisons, had never done this before and seemed intelligent and was acting in good faith. Yet things went south for him. Genuinely curious to hear people's responses.

tmpz22 4y ago
Once you have even a small amount (say $500k) of perceived success you find yourself meeting "helpers" constantly, people who want to mentor you, people who want to be your friend, and magically all these people want something from you. As your perceived worth goes up you start meeting more "interesting" people who want to help more, and of course they ultimately want something more from you. So you eventually have a big network through this process, and at a certain level its not even about trading favors, but trading the potential for a favor. And with this support group you can answer almost any question, market trends, merger opportunities, fund raising access, its all there for you.
silexia 4y ago
As someone who has also successfully done this, I think it is a matter of experience. You make mistakes and learn from them. Lots of BSers get hired into executive positions, it's best to simply do it and learn yourself along the way.
P5fRxh5kUvp2th 4y ago
Critically thinking and not being afraid of getting it wrong. 1. You can't move from a small company to running a large company without being able to identify (eventually) where it works in one but not the other, so you must think critically. 2. Not being afraid to get it wrong also means not shying away from an admission that you need to improve and then doing so. I think where a lot of people get it wrong is more static thinking. Applying what worked for you at the small company to the large and expecting it to work. --- As an aside, I see this all the time, it's not just a founder problem. I'm of the opinion that the reason agile mostly doesn't work is because well-meaning people don't actually know what good software dev looks like and reach out to prescriptions such as scrum. They form the belief that's the right way to do it and hang onto it, when in actuality if they'd make a few non-agile adjustments they may find themselves with a lot more success.
ren_engineer 4y ago
>How were these people able to transition from founders of a tiny company to successfully running and managing large (people or revenue) companies? Many of them had never done this before so how did they figure out what to do and how to do it? lots of mentorship from investors and others with experience. Even the most famous young founders had a veteran executive running a lot of things behind the scenes. Steve Jobs had Mike Markkula, Eric Schmidt was running the show at Google, Facebook had Thiel and Sean Parker. This applies to pretty much every one of these companies most of the startup myths about these companies are embellished because having a young prodigy founder is good for marketing. Of course some are never able to make the jump and get replaced by the board
- patkai 4y ago
  > Eric Schmidt was running the show at Google Was he really? I always thought he was more of a coach to the founders.
jrvarela56 4y ago
My impression is these people are great learners and upgrade themselves to do what's required of them to grow the company - most importantly how to hire, empower and motivate talented people. We're (HNers I guess; assuming dev-focused mentality) bound to think it means reading the manual and cracking complex problems, but it's more towards prioritizing, figuring out who knows what and how to manage people. I'm not an investor so this is all anecdata from going through YC and having a close friend get to 100Ms in funding. My friend has obv hired an amazing exec team, but like thousands of things, he learned how to do it by reading, asking for advice and asking for help. Early stage he figured out how to get a 'technical cofounder' - literally got on the phone with 100 engineers (got me to screen like 3-5 to get a gist of what I was looking for). Of course, I was only just one source: for everything he had to figure out/study he got input from many sources. They learn, they figure out what's important enough for them to put their time/attention, they delegate to talented people. I guess the quote 'A players hire A players and B players hire C players' applies too. They can tell who's an A player by setting the bar high enough to their standard. I think there wont be a straight answer to this question - people who figure it out make huge companies and a lot of money as a reward for cracking this puzzle. Re:groupon then on top of that you have a couple of dice rolling and if your number doesn't hit you're out.
time_to_smile 4y ago
Only a partial answer to your question (there's plenty of good ones), but it reminds me of the time I reached out to the CTO of a small startup looking to hire a director of data science. I've lead a few teams before and have a decade+ plus of experience at a range of companies so I had a pretty reasonable idea about what's out there, and I figured it was a small startup so I might be a good fit. I got a pretty blunt response that they were looking for someone that had managed teams for over 5 years, preferably at a single org. Not unreasonable but when I looked at the CTO's linked in they had only ever managed their current startup and only for 3 years at the time of the discussion. I just found it curious that they felt the job of CTO could be learned pretty much as you go, but anyone without their target experience wasn't even worth talking to. It looks like they had major layoffs a year ago, and aren't making much of a dent in their space so it's quite possible that "survivorship bias" is a big part of it as well.
- myownpetard 4y ago
  It makes sense in another light though. You should try to hire people that will bolster your weak areas. In this case a lack of experience managing larger teams.
- iamflimflam1 4y ago
  It's interesting as it's often the CTO (or early technical lead) who will get pushed out as a company grows - particularly true for non founders. My impression has always been that there's an assumption the CEO can grow, but the technical person can't.
  - patkai 4y ago
    > it's often the CTO This is interesting. Do others have the same experience? (I don't have a large enough sample to tell.)
    - iamflimflam1 4y ago
      To be fair, sometimes it's not unreasonable. There is a huge difference between being in an often tiny team smashing out code to get a product out the door and leading multiple teams specialising in multiple different disciplines. There's also a huge difference between being able to architect a piece of software and being able to work out a 5 year technology roadmap, manage budgets, analyse the competitive landscape, manage multiple stakeholders etc... For some people that difference is the difference between having an enjoyable job and absolutely hating going to work...
epolanski 4y ago
Imho: once you have a product it's all about luck into meeting and selecting the right people to help you.
- asdff 4y ago
  Plus you have to luckout on developing a product that the existing capitalists won't just extinguish. So much of success is having the right product at the right time. The fact that facebook got big was partially because there was no major media social network that could buy politicians and advertising and outright buy out competitors before they've ever gotten too large to be a threat. Now there is, facebook assumed that role by growing to that size having no solid competitors, and that opportunity for new mark zuckerbergs making facebooks is probably closed off. If a new EV company appeared today, founded by some rag tag college grads versus someone who was already rich, what are the odds it gets legs and runs? I bet zero. I bet it gets bought out by an existing competitor that can afford to navigate all the byzantine regulations they themselves penned to defend their niche in this industry. That's even the working model many startup founders have, to create just enough of a coherent product to get bought out by a larger fish and not have to deal with maintaining or expanding that product.
hackitup7 4y ago
Having seen this up close, it's mainly a combination of a strong growth mentality and willingness to adapt, plus survivorship bias. For the former, a lot of company scaling isn't really that hard - it's hard because it's busy, varied, and relentless, but it isn't like quantum physics where most people just can't neurologically handle it. You also have to do it if you want to keep your job so obviously there's strong incentive to learn. Basically if you're willing to learn and adapt (often requires many humbling or embarrassing moments), you just figure it out.
spaetzleesser 4y ago
""How were these people able to transition from founders of a tiny company to successfully running and managing large (people or revenue) companies? Many of them had never done this before so how did they figure out what to do and how to do it?" Obviously they have to be smart but I think it's a lot about ambition to be willing to do what it takes. Most people simply don't have the drive to keep pushing forward once they have reached a certain level of wealth.
majormajor 4y ago
I think your second guess is the closest - but, I'd push you a bit further: Very few single mistakes are so big that that single mistake will doom a company, especially a company that's seeing a bunch of success and growth. In the Groupon case, I pretty quickly see two key mistakes: * not being willing to make a hard decision ("following the data" on short term metrics for something he said he knew didn't feel right as a long term decision) * not being able to keep an eye on the long-term and change course when needed. He frames this as "it happened too fast" but also makes it sound like this wasn't one decision, but a whole series of them. These are both classic new-leader mistakes, so maybe the version of Groupon that hadn't imploded in a parallel universe still made them but also learned from them just soon enough to prevent disaster. Mistakes are inevitable, how you respond to them matters just as much.
lordgrenville 4y ago
To me it seems obvious that it's just survival bias, but I'm not sure how you'd test this hypothesis.

tmpz22 4y ago

Once you have even a small amount (say $500k) of perceived success you find yourself meeting "helpers" constantly, people who want to mentor you, people who want to be your friend, and magically all these people want something from you. As your perceived worth goes up you start meeting more "interesting" people who want to help more, and of course they ultimately want something more from you. So you eventually have a big network through this process, and at a certain level its not even about trading favors, but trading the potential for a favor. And with this support group you can answer almost any question, market trends, merger opportunities, fund raising access, its all there for you.

silexia 4y ago

As someone who has also successfully done this, I think it is a matter of experience. You make mistakes and learn from them. Lots of BSers get hired into executive positions, it's best to simply do it and learn yourself along the way.

P5fRxh5kUvp2th 4y ago

Critically thinking and not being afraid of getting it wrong. 1. You can't move from a small company to running a large company without being able to identify (eventually) where it works in one but not the other, so you must think critically. 2. Not being afraid to get it wrong also means not shying away from an admission that you need to improve and then doing so. I think where a lot of people get it wrong is more static thinking. Applying what worked for you at the small company to the large and expecting it to work. --- As an aside, I see this all the time, it's not just a founder problem. I'm of the opinion that the reason agile mostly doesn't work is because well-meaning people don't actually know what good software dev looks like and reach out to prescriptions such as scrum. They form the belief that's the right way to do it and hang onto it, when in actuality if they'd make a few non-agile adjustments they may find themselves with a lot more success.

ren_engineer 4y ago

>How were these people able to transition from founders of a tiny company to successfully running and managing large (people or revenue) companies? Many of them had never done this before so how did they figure out what to do and how to do it? lots of mentorship from investors and others with experience. Even the most famous young founders had a veteran executive running a lot of things behind the scenes. Steve Jobs had Mike Markkula, Eric Schmidt was running the show at Google, Facebook had Thiel and Sean Parker. This applies to pretty much every one of these companies most of the startup myths about these companies are embellished because having a young prodigy founder is good for marketing. Of course some are never able to make the jump and get replaced by the board

patkai 4y ago
> Eric Schmidt was running the show at Google Was he really? I always thought he was more of a coach to the founders.

jrvarela56 4y ago

My impression is these people are great learners and upgrade themselves to do what's required of them to grow the company - most importantly how to hire, empower and motivate talented people. We're (HNers I guess; assuming dev-focused mentality) bound to think it means reading the manual and cracking complex problems, but it's more towards prioritizing, figuring out who knows what and how to manage people. I'm not an investor so this is all anecdata from going through YC and having a close friend get to 100Ms in funding. My friend has obv hired an amazing exec team, but like thousands of things, he learned how to do it by reading, asking for advice and asking for help. Early stage he figured out how to get a 'technical cofounder' - literally got on the phone with 100 engineers (got me to screen like 3-5 to get a gist of what I was looking for). Of course, I was only just one source: for everything he had to figure out/study he got input from many sources. They learn, they figure out what's important enough for them to put their time/attention, they delegate to talented people. I guess the quote 'A players hire A players and B players hire C players' applies too. They can tell who's an A player by setting the bar high enough to their standard. I think there wont be a straight answer to this question - people who figure it out make huge companies and a lot of money as a reward for cracking this puzzle. Re:groupon then on top of that you have a couple of dice rolling and if your number doesn't hit you're out.

time_to_smile 4y ago

Only a partial answer to your question (there's plenty of good ones), but it reminds me of the time I reached out to the CTO of a small startup looking to hire a director of data science. I've lead a few teams before and have a decade+ plus of experience at a range of companies so I had a pretty reasonable idea about what's out there, and I figured it was a small startup so I might be a good fit. I got a pretty blunt response that they were looking for someone that had managed teams for over 5 years, preferably at a single org. Not unreasonable but when I looked at the CTO's linked in they had only ever managed their current startup and only for 3 years at the time of the discussion. I just found it curious that they felt the job of CTO could be learned pretty much as you go, but anyone without their target experience wasn't even worth talking to. It looks like they had major layoffs a year ago, and aren't making much of a dent in their space so it's quite possible that "survivorship bias" is a big part of it as well.

myownpetard 4y ago
It makes sense in another light though. You should try to hire people that will bolster your weak areas. In this case a lack of experience managing larger teams.
iamflimflam1 4y ago
It's interesting as it's often the CTO (or early technical lead) who will get pushed out as a company grows - particularly true for non founders. My impression has always been that there's an assumption the CEO can grow, but the technical person can't.
- patkai 4y ago
  > it's often the CTO This is interesting. Do others have the same experience? (I don't have a large enough sample to tell.)
  - iamflimflam1 4y ago
    To be fair, sometimes it's not unreasonable. There is a huge difference between being in an often tiny team smashing out code to get a product out the door and leading multiple teams specialising in multiple different disciplines. There's also a huge difference between being able to architect a piece of software and being able to work out a 5 year technology roadmap, manage budgets, analyse the competitive landscape, manage multiple stakeholders etc... For some people that difference is the difference between having an enjoyable job and absolutely hating going to work...

epolanski 4y ago

Imho: once you have a product it's all about luck into meeting and selecting the right people to help you.

asdff 4y ago
Plus you have to luckout on developing a product that the existing capitalists won't just extinguish. So much of success is having the right product at the right time. The fact that facebook got big was partially because there was no major media social network that could buy politicians and advertising and outright buy out competitors before they've ever gotten too large to be a threat. Now there is, facebook assumed that role by growing to that size having no solid competitors, and that opportunity for new mark zuckerbergs making facebooks is probably closed off. If a new EV company appeared today, founded by some rag tag college grads versus someone who was already rich, what are the odds it gets legs and runs? I bet zero. I bet it gets bought out by an existing competitor that can afford to navigate all the byzantine regulations they themselves penned to defend their niche in this industry. That's even the working model many startup founders have, to create just enough of a coherent product to get bought out by a larger fish and not have to deal with maintaining or expanding that product.

hackitup7 4y ago

Having seen this up close, it's mainly a combination of a strong growth mentality and willingness to adapt, plus survivorship bias. For the former, a lot of company scaling isn't really that hard - it's hard because it's busy, varied, and relentless, but it isn't like quantum physics where most people just can't neurologically handle it. You also have to do it if you want to keep your job so obviously there's strong incentive to learn. Basically if you're willing to learn and adapt (often requires many humbling or embarrassing moments), you just figure it out.

spaetzleesser 4y ago

""How were these people able to transition from founders of a tiny company to successfully running and managing large (people or revenue) companies? Many of them had never done this before so how did they figure out what to do and how to do it?" Obviously they have to be smart but I think it's a lot about ambition to be willing to do what it takes. Most people simply don't have the drive to keep pushing forward once they have reached a certain level of wealth.

majormajor 4y ago

I think your second guess is the closest - but, I'd push you a bit further: Very few single mistakes are so big that that single mistake will doom a company, especially a company that's seeing a bunch of success and growth. In the Groupon case, I pretty quickly see two key mistakes: * not being willing to make a hard decision ("following the data" on short term metrics for something he said he knew didn't feel right as a long term decision) * not being able to keep an eye on the long-term and change course when needed. He frames this as "it happened too fast" but also makes it sound like this wasn't one decision, but a whole series of them. These are both classic new-leader mistakes, so maybe the version of Groupon that hadn't imploded in a parallel universe still made them but also learned from them just soon enough to prevent disaster. Mistakes are inevitable, how you respond to them matters just as much.

lordgrenville 4y ago

To me it seems obvious that it's just survival bias, but I'm not sure how you'd test this hypothesis.