Foundership

Entrepreneurs thrive on change, but when its time for you to move on as a founder, the change is very personal. Not because it is about you, but because the passion, sweat and toil makes it so. The change is inevitable, companies need new leadership at different stages.

Matt Marshall from the Mercury News writes about Johnathan Abrams of Friendster and Sean Parker of Plaxo stepping down. He paints the picture as though a larger decision was made for both companies by mutual investors, which implies the personnel decision may be less personal. Both companies are at a point where they need to demonstrate new metrics. As Jason points out its time for strategic moves.

Not a day goes by where I don't brace myself for this change. As a CEO and Founder of an early stage company, I know new stages will come. I constantly question myself if I'm the best person for the job, because the company is more than just me. Its a source of livelihood, investor return and customer bliss -- all of which improve over time. I am really darn good at this stage of the company and have proven it in the past. I hope to test my capabilities at latter stages, but also recognize that the day may come where regardless of my ability to lead, manage and deliver -- environmental forces may call for the new.

It seems that Jonathan took this change gracefully and is settling into the classical founder role. Sean Parker, may not be, apparently leaving at conflicting terms. Its important to note that nobody knows the real story about Plaxo's transition, the interactions that matter were between a few people -- and if he departed in conflict its really Plaxo's loss. Sometimes founders have to go. A new CEO definitely has the right to form their own management team and management style is often a cause. The worst cases are the result of blind quest for control.

Founders can be the greatest asset a company can have. They set the culture, have an inherent expertise that builds over time and provide a history. They can play an ongoing role in cultural leadership, develop new businesses and technologies within the business and are the best conceivable evangelists (think Larry and Serge). I'll bet that if you compare the performance of companies that retained their founders in a healthy relationship for these advantages outperform those that don't.

I guess my views are in line with one of my investors, as Joi describes his perspective as a former entrepreneur and VC. And I completely agree that Pierre is the ideal founder prototype. Actually, I don't have to guess, I make a point to have the foundership discussion with potential investors up front. Some of the best VCs I have met actually start the conversation of working together with understanding the motives and expectations of the team they are buying into.

I have always handled founder transitions gracefully, knowing its not just in the company's interest, but my own. Like divorce with kids, very little good can come from conflict. Transition or departure affords new opportunities; possible exits, more enjoyable responsibilities and opportunities to create new things. Once I had to leave a company to make room for a new management team. Literally brought me to tears when I said goodbye at a staff meeting. But I respected the decision, understood it, retained relationships and moved on to begin a new stage.

Comments

[Ted Rehingold]

Thanks, this is a really meaningful entry to share.

[Les Trachtman]

These comments illustrate quite a mature view of the founder role and the value building process. Having just come off of a hired-in CEO role with founders who did not believe that a CEO should be able to identify his own management team players, I am very sensitive to these issues. It takes a great set of investors (sounds like you have them) and an insightful founder to set the next CEO up for success - should the situation require one.