4 ms·

Interesting point: "At some point, it may be required that the rest of the team that started the company with the CEO may need to be changed out for an executiv

by kolya3 18y ago

Interesting point: "At some point, it may be required that the rest of the team that started the company with the CEO may need to be changed out for an executive team with experience at the “growth-stage” versus just the “start-up” stage." While I've definitely worked with founders who weren't fit to run a big company (lack of focus, lack of common sense, blind to customers' needs - you name it...), the "experienced executive team" that replaced them seemed to go out of their way to run the company into the ground. I have now seen this happen 3 times (both at companies I've worked at and friends' companies).

teej 18y ago
> the "experienced executive team" that replaced them seemed to go out of their way to run the company into the ground I've seen this, as well as seing the -same- executive run two different companies into the ground.
Brushfire 18y ago
I've seen this as well. This seems to happen more prevalently in newer industries and software based businesses, where the team coming in may be extensively briefed, but still does not really 'get' it. It may be a disconnect with customers wishes, with the market, competitors, or even with the existing employees/staff. It seems much better to hire awesome advisers than to replace founders. Good founders also know when it is time to give up the reins as well.
- krav 18y ago
  You nailed it: "It seems much better to hire awesome advisers than to replace founders. Good founders also know when it is time to give up the reins as well."
alain94040 18y ago
You don't run a $100M business like you run a $1M business. In the $100M range (and before), you start obsessing about gross margins, tax issues, renewal business, reduce on-going discount practices, etc. When you are in the $1M range, you are focusing on gaining your first customers and it doesn't really matter if the deal is profitable or not, each sale makes you grow by leaps and bounds. If you are detail-oriented, you'll enjoy the $100M business. If you are a born-entrepreneur, you may prefer the 0-to-1 adventure. I know where I stand.
- run4yourlives 18y ago
  and it doesn't really matter if the deal is profitable or not, Um, it matters more, if anything. SV mentality is not the path to success. The faster you get profitable, the better your chances overall.
  - staunch 18y ago
    For a tiny business immediate profitably might be an absolute requirement for the survival of a company. For a company that's prepared to spend money to have significant long term success it's a different story. It may very well be wise to aim for $10 million in revenue with $500k losses rather than a more conservative $1 million revenue with $50k profit.
  - alain94040 18y ago
    Ok, I should have been more specific. When you close your first deals, you care about bookings. You cash the check. When you approach the $100M range, you care about revenue, with its complex rules about revenue recognition, whether the deal has to be recognized over multiple years, etc. You can end up in a situation where the CFO tells you that the check in your hand is not profitable... Weird.

by kolya3 18y ago

teej 18y ago

> the "experienced executive team" that replaced them seemed to go out of their way to run the company into the ground I've seen this, as well as seing the -same- executive run two different companies into the ground.

Brushfire 18y ago

I've seen this as well. This seems to happen more prevalently in newer industries and software based businesses, where the team coming in may be extensively briefed, but still does not really 'get' it. It may be a disconnect with customers wishes, with the market, competitors, or even with the existing employees/staff. It seems much better to hire awesome advisers than to replace founders. Good founders also know when it is time to give up the reins as well.

krav 18y ago
You nailed it: "It seems much better to hire awesome advisers than to replace founders. Good founders also know when it is time to give up the reins as well."

alain94040 18y ago

You don't run a $100M business like you run a $1M business. In the $100M range (and before), you start obsessing about gross margins, tax issues, renewal business, reduce on-going discount practices, etc. When you are in the $1M range, you are focusing on gaining your first customers and it doesn't really matter if the deal is profitable or not, each sale makes you grow by leaps and bounds. If you are detail-oriented, you'll enjoy the $100M business. If you are a born-entrepreneur, you may prefer the 0-to-1 adventure. I know where I stand.

run4yourlives 18y ago
and it doesn't really matter if the deal is profitable or not, Um, it matters more, if anything. SV mentality is not the path to success. The faster you get profitable, the better your chances overall.
- staunch 18y ago
  For a tiny business immediate profitably might be an absolute requirement for the survival of a company. For a company that's prepared to spend money to have significant long term success it's a different story. It may very well be wise to aim for $10 million in revenue with $500k losses rather than a more conservative $1 million revenue with $50k profit.
- alain94040 18y ago
  Ok, I should have been more specific. When you close your first deals, you care about bookings. You cash the check. When you approach the $100M range, you care about revenue, with its complex rules about revenue recognition, whether the deal has to be recognized over multiple years, etc. You can end up in a situation where the CFO tells you that the check in your hand is not profitable... Weird.