Leadership Style: Should Founders Be CEOs?

In a popular post about Why We Prefer Founding CEOs, venture funding expert Ben Horowitz at Andreessen Horowitz defend their preference for start up companies run by the founder:

“The macro reason: that’s the way most of the great technology companies have been built. At Andreessen Horowitz, our primary goal is to invest in the great technology franchises. As we looked at the history of great technology companies, we discovered that founders ran an overwhelming majority of them for a very long time, including:

  • Acer—Stan Shih
  • Adobe—John Warnock
  • Amazon – Jeff Bezos
  • AMD—Jerry Sanders III
  • Apple – Steve Jobs
  • DEC—Ken Olsen
  • Dell—Michael Dell

“In addition, founders run today’s most promising new companies such as Zynga (Mark Pincus), Facebook (Mark Zuckerberg), Twitter (Ev Williams), Workday (Dave Duffield and Aneel Bhusri) and Fusion-io (David Flynn).”

The author goes on to defend his perspective, asking these questions:

“Why are great technology companies so often run by their founders? And why do professional CEOs sometimes succeed?”

This has stimulated some great comments over on Focus as business professionals, including myself, chimed in on the question, “Should Founders Be CEOs?” If you’ve got a few minutes go read what some of my colleagues say.

Here’s my perspective, one that most people don’t think about:

That is an excellent article by Ben Horowitz, which raises some great issues, as do all the comments on Focus. I think whether or not a founder makes a good CEO has everything to do with how s/he is wired. I would like to add this perspective:

  • New research on entrepreneurs has shown that there are 16 different “types” of behaviors/tendencies – what founder of BOSI Institute, Joe Abraham, calls “entrepreneurial DNA.”
  • Founders may have a high B (builder) or a high I (innovator) – think of Wozniak and Jobs, as a great example. That was a classic B and I combo that allowed one to focus on the technology and the other to focus on sales, marketing and building the business.
  • However, if there is just one founder who is a strong innovator, for example, their preference is going to be to focus on the technology and not building the business systems that may be needed to grow and scale. S/he will be passionate about their product and will be able to pitch it to hire talent, obtain funding or sell to prospects – which can take them a long way. But at some point, when growth is at the stage where it’s important that systems and controls are in place, and they have to step away from the technology to focus on that, problems can occur.

Understanding what type of entrepreneur you are (at any given time) and how that impacts the people around you, what you choose to focus on and how you build your business is half the battle. (Curious about your type? I invite you take a free entrepreneurial DNA assessment here!)