Startup Leadership E-Book

Derek Lidow

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 433

Veröffentlichungsjahr: 2014

Beschreibung

Anyone can start a business. But only leaders can succeed. Most entrepreneurs know the long odds: only a fraction of them will lead their enterprises through the rocky stages of growth to launch self-sustaining companies. Very few know how to outflank the failures that await them at every turn, including the most painful--being abandoned by key members of their team or getting pushed out by their board just as their business starts to generate real value. Derek Lidow is on a mission to improve these odds and change these outcomes. Throughout his long career--as CEO, innovator, and entrepreneur--he has tested virtually every aspect of launching a business. Lidow now argues that success is far less dependent upon a firm's idea or any grand strategy than it is upon something more personal: leadership. Emerging companies have specific leadership requirements, stage by fast-moving stage. Few founders have been able to leverage the tremendous power of this underrecognized reality--until now. Startup Leadership demonstrates how founders can adopt the skills that are required at each stage of their journey. Whether you are at the idea stage or managing a more mature enterprise, you can start to recognize the fundamental conflict: how to balance your selfish drives with the more selfless leadership required by the organization at any given time. The book shows you how to achieve this balance by: * Assessing your unique motivations, traits, and skills * Creating a personal leadership strategy that leverages your strengths and mitigates your weaknesses * Mastering how to lead teams, including boards * Understanding the five prerequisites for driving change * Taking control of your inevitable crises, thereby strengthening your team and your leadership With Lidow's help, you will learn how to become the startup leader your business needs, and you'll move forward with your plans with greater confidence and success.

Leseprobe

Table of Contents

Praise for Startup Leadership

Title Page

Copyright

Dedication

Preface

Notes

1: Success Requires More Than Entrepreneurship

Entrepreneur, or Entrepreneurial Leader?

Stages, Skills, and Selfish Selflessness

Prerequisites: Mastering the Skills of Startup Leadership

Application: What an Entrepreneurial Leader Does

Notes

Part One: Prerequisites: Mastering the Skills of Entrepreneurial Leadership

2: Are You Selfish Enough to Be Selfless?

Motivation Is Power

Motivations, Traits, and Skills: Your Capability Mix

Tracking Down Your Traits

Developing Your Skills

Notes

3: Enterprises Are Needy

Projects, Processes, and Culture: The Three Basics

Surviving the Four Stages of Enterprise Maturity

Notes

4: Building Relationships

Shared Objectives: The Foundation of All Relationships

Understanding Cooperation

Understanding Competition

Understanding Retreat

Building Powerful Relationships

ELs and the Skill of Relationship Building

ELs and the Skill of Communication

Overcoming Communication Biases

Building Powerful Complementary Relationships for the Long Term

Notes

5: Motivating Others

Motivation and Self-Actualization

Motivational Issues with the Segway

Different Stages, Different Motivators

Notes

6: Leading Change

The Anxiety of Change

Learning to Change

Lining Up the Ducks

Explaining the Importance of Change

Working with the Team

Nothing Is Perfect

Notes

7: Creating a Personal Leadership Strategy

Step One: Tapping Into Core Motivations

Step Two: Getting Objective Mentors

Step Three: Inventorying Your Traits

Step Four: Assess Your Skills

Step Five: Drafting a Personal Leadership Strategy

Notes

Part Two: Application of Entrepreneurial Leadership Skills

8: Strategizing Fragile Growth

Two Types of Entrepreneurial Strategies

Basic Strategic Questions

Stages as Strategic Beacons

Notes

9: Organizing to Succeed

(Un)controllable by Design

Formal and Informal

Organizations Help Enterprises Mature

Organizing Stage One

Organizing Stage Two

Organizing Stage Three

Organizing Stage Four

Notes

10: Hiring and Firing

Precious Lost Time

Hiring as a Process

Firing Effectively

Notes

11: Leading Teams

A Little Motivation Delivers a Big Impact

Discovering the Value of Ducks

Leaders Admit Their Mistakes

The Importance of Strong Emotions

Leading a Board of Directors

Leading Teams of Talent

Notes

12: Leading Through Crises

Crises Are Inevitable

The Phases of Crisis Leadership

Crisis Leaders Are Self-Aware

Baby Stepping Through a Crisis

Learning Your Lessons

The Critical Importance of Slack Time

Notes

13: The Selfish Rewards of Selfless Entrepreneurial Acts

ELs Selfishly Help Others

The Attraction of Sincere Selfishness

Valuable Ideas Are Everywhere

Notes

Appendix A: Motivations, Traits, and Skills

Appendix B: The Five Essential Entrepreneurial Leadership Skills

Appendix C: Characteristics of Projects, Processes, and Culture

Appendix D: Characteristics of Enterprises and Their Leaders in Stages One Through Four

Stage One: Customer Validation

Stage Two: Operational Validation

Stage Three: Financial Validation

Stage Four: Self-Sustainability

Appendix E: Relationship Building and the Benefits and Costs of Cooperation, Competition, and Retreat

Appendix F: The Five Prerequisites of Change (The Five Ducks)

Appendix G: Ten Basic Strategic Questions

Appendix H: Five Phases of Crisis Resolution

Notes

Acknowledgments

About the Author

More from Wiley

Index

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End User License Agreement

Praise for Startup Leadership

“Derek Lidow is right: entrepreneurs, not mere ideas, lead companies to their full potential. Lidow puts this powerful idea to work, alongside the full breadth and depth of his own experiences running growth companies, in Startup Leadership. I recommend this book for every founder—regardless of your stage—because Lidow's invaluable insights, personal leadership strategies, and framework will help you improve the trajectory of your success.”

—Rich Karlgaard, publisher, Forbes magazine; board director; investor; entrepreneur; and author, The Soft Edge

“Trust me because I've seen and done virtually everything that's possible in business today. Whether you're an investor, board member, CEO, accelerator, small business owner, or aspiring entrepreneur, Startup Leadership is mandatory reading. Thanks to the smart and detailed advice of serial success story Derek Lidow, the book will help de-risk virtually any enterprise. It will also expand your levels of innovation, profits, culture, and success. I recommend you get a copy—and give a copy to someone who needs it.”

—Bruce Hack, advisor, angel investor, board director, and former CEO, Vivendi Games

“The entrepreneur's journey is often misunderstood as an idea coming to life. In fact, it is entrepreneurs themselves who must learn to create and lead an organization. Startup Leadership provides aspiring and experienced entrepreneurs powerful tools to grow as leaders.”

—Brian O'Kelley, founder and CEO, AppNexus

“This is not another book on how to build a successful startup. Lidow demystifies relationship building, negotiation, and vision creation with clarity and balance. He shows what it takes to become a more confident leader who builds startups with less risk and better outcomes. Your transformation into a better-equipped entrepreneurial leader begins now.”

—Natasha Gajewski, founder and CEO, Symple Health Inc.

“If any book contains the secrets of entrepreneurial success, this is it! I recommend Startup Leadership to both budding and proven entrepreneurs.”

—Greg Olsen, founder, Epitaxx and Sensors Unlimited

“Startup Leadership is the handbook for leadership all entrepreneurs should read while scaling their business.”

—Chris Kuenne, founder-entrepreneur, Rosetta

“A must-read for aspiring and experienced entrepreneurs!”

—Jeremey Donovan, author, How to Deliver a TED Talk

“This book fills an important gap among books about entrepreneurship, and Derek Lidow shows what it really takes to make a successful startup. Startup Leadership focuses on the essential, yet elusive, leadership elements required to navigate a venture from idea to self-sustainability. Future entrepreneurs will be thankful to have this companion along for the entire journey.”

—John Danner, professor, Haas School of Business, UC Berkeley

“Finally, an easy-to-read and digestible blueprint for entrepreneurs that will empower them to build and lead sustainable enterprises. Lidow encapsulates years of trial and error and teaches what's required for successful entrepreneurship with a clear methodology.”

—Jeanne Gray, founder and CEO, AmericanEntrepreneurship.com

“Finally, from the true-life experiences of a highly successful entrepreneur, comes a how-to book that is more than an academic compendium. Derek Lidow captures the essence of the leadership qualities needed for success, not just in the formation and early stages of a venture, but along the path to a significant stand-alone business. This hands-on book is an instant classic.”

—Ricardo B. Levy, professor, Stanford University, and author, Letters to a Young Entrepreneur

Copyright © 2014 by Derek B. Lidow. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Lidow, Derek, 1953-

Startup leadership : how savvy entrepreneurs turn their ideas into successful enterprises / Derek Lidow. -- First edition.

pages cm

Includes bibliographical references and index.

ISBN 978-1-118-69705-4 (cloth); ISBN 978-1-118-84567-7 (pdf); ISBN 978-1-118-84565-3 (epub)

1. New business enterprises. 2. Leadership. I. Title.

HD62.5.L525 2014

658.1′1 -- dc23

To my muse, partner, and true love, Diana

Preface

The objective of this book is to help entrepreneurs succeed—all types of entrepreneurs, in all stages of developing their idea into a tangible enterprise. The premise of this book is that entrepreneurs, not ideas, lead their enterprises to success. These pages describe fundamental capabilities that enormously enhance an entrepreneur's chances of success; capabilities that can be enhanced through understanding and practice. This book takes a very different tack from what you find in most books on entrepreneurship, or even what you find in most business books. We do not talk about money, or products, or customers. We do talk about how you and the people you find and motivate need to work together in order to produce more value than you could have done alone.

This book is about leadership, and the particular type of leadership required to take an initial idea to the point where it has become an enterprise that produces value and is self-sustaining. Startup leadership is perhaps the most challenging form of leadership because the founder starts alone, or with very few people who are willing to dedicate themselves to his success. Most entrepreneurs fail not because they were incapable, but rather because they had nobody coaching them on how to prepare and respond to the myriad of challenges they will face. My book provides that advice and coaching. Using an analogy, my book is not about childbirth; rather, it is about early child rearing—bringing a child up from birth to the point where he leaves home because he has found a great job and a nice place to live. Most business books treat enterprises as if they were grown adults, not addressing the stages at which they are fragile infants, developing adolescents, or teenagers.

The widely accepted belief that half of the new jobs and economic growth come from new enterprises is actually misleading; brand-new firms account for only a few percent of the jobs in any given year. The more accurate statement is that virtually all the new job creation and economic growth comes from firms that have taken the entrepreneur's original idea and transformed it into scalable activities that teams of people are motivated to work on together. These firms account for over 60 percent of all job creation.1 (A footnote number indicates that a citation or further discussion can be found in the chapter notes in the back of the book; you can also find these at www.dereklidow.com.)

Most entrepreneurial enterprises hire at most one or two other people and stop growing.2 These firms go out of business quickly, replaced by another one- or two-person enterprise, usually in the same business, but run by a different entrepreneur. Less than 10 percent of all the enterprises that launch create any measurable value beyond what the entrepreneur could earn working for someone else. Surprisingly, many large firms encourage entrepreneurial actions by their management that result in the same creation of low value. These traps are easy to fall into without the skills discussed in this book.

Many of the firms that succeed at creating value still go out of business or shrink precipitously because they do not make themselves self-sustaining.3 Customers and economic conditions always change, and any enterprise—or any internal department, for that matter—must be able to innovate and change in order to prevent itself from atrophying and decaying. Firms have to create value and be self-sustaining in order to create economic value. These firms are led by entrepreneurial leaders—a very small subset of all entrepreneurs, estimated by some to be fewer than one in fifty.4

It has constantly fascinated me to watch who has become successful and who has not. This fascination dates back to when I finished graduate school and started working for a company in Silicon Valley. The mid-seventies were the start of the golden age of the semiconductor industry, and the world hasn't been the same since. Thousands of impressive people played essential roles in the success of the global semiconductor, computer, and electronics industries and in the success of the individual companies they founded and led. A few of these people are very famous; many more are not as famous, but their contributions are justifiably well respected in their markets and by their peers. My fascination, however, is with the thousands of impressive people who tried but failed to make a lasting mark. I want to understand why some people can successfully take their ideas and turn them into something that has a positive effect on the world, while other people, many with even greater experience and talents, fail to leave a mark.

My interest in success and failure started as a purely selfish desire to figure out how to get ahead in an exciting industry. I did well in school and received my PhD in applied physics from Stanford at the age of twenty-two, so I of course felt that I could tackle any problem the real world would send my way. I was surprised to find that my credentials and technical experience did not entitle me to being immediately chosen to lead. Why did some people care what I had to say and wanted to help me succeed while others clearly did not? I wanted to understand what was happening, so I could be successful. I also wanted to understand so that I could help other people be successful. Over the past thirty-five years I have remained fascinated with success and failure. I have constantly observed, I have read avidly, and I have sought out others to hear their stories or get their advice. I even founded a company, iSuppli, part of whose mission was to track who was successful in the tech world and who was not. I have put to use what I have learned, frequently with eye-opening results.

I now teach entrepreneurial leadership at Princeton University, and my interest in success and failure has become an academic pursuit. What enables some people to turn their ideas into value-producing self-sustaining enterprises while others are unable to? I have found that the fundamental challenges in the founding and growing of a successful semiconductor company are no different from those for founding and growing any other type of enterprise. What creates a successful enterprise is fundamentally the same for all entrepreneurs.

Doing my research, I have found gems of universal truth relative to taking ideas and then getting people to help you turn the idea into a real value-producing and self-sustaining enterprise. Each gem is universal, meaning it can be applied broadly across cultures and business scenarios. Each gem is well supported and consistent with all available evidence, but to make this book as readable as possible I have put all supporting footnotes, references, and analysis into chapter notes that you will find at the back of the book.

To make this book more memorable and valuable, it is organized around a series of stories about entrepreneurs and the actions that led to their success—or failure. Each story illustrates a gem of truth directly applicable to growing an idea into a value-producing, self-sustaining enterprise. All of the stories are about real people, but for many I have changed the facts and circumstances to hide real identities. I use real names where the name of the entrepreneur may add an extra dimension to the story; in those cases I have not changed facts or situations.

Derek LidowJanuary 2014Princeton, New Jersey

Notes

1 The specific information on the contribution of new firms to jobs growth came from a recent Kauffman Foundation research report, “The Importance of Startups in Job Creation and Job Destruction,” The Kauffman Foundation Research Series: Firm Foundation and Economic Growth, July 2010.

2 For an understanding of the facts of entrepreneurship and how it drives growth, the best single overview is Shane, The Illusions of Entrepreneurship (New Haven, CT: Yale Press, 2008). Pages 106 to 108 are particularly relevant to my discussion in the introduction. Another important reference is Reynolds, Entrepreneurship in the United States: The Future Is Now (New York: Springer, 2007). On page 13 you will find the surprising extrapolation that almost half of the working population in the United States will have attempted to be an entrepreneur at some point in their career.

3 The fact that most firms decay after they have started to create value, sometimes significant value, is best illustrated in some studies on Inc. magazine's annual “Inc. 500 list of fastest growing companies in the US.” See Buchanan, “Life After the Inc. 500: Fortune, Flameout, and Self-Discovery,” Inc., Aug. 21, 2012, http://www.inc.com/magazine/201209/leigh-buchanan/life-after-the-inc-500-fortune-flameout-self-discovery.html. Virtually all Inc. 500 companies have reached Stage 3, or else they could not have grown so quickly. Only about 32 percent of the Inc. 500 companies between 2000 and 2006 had grown larger or had gone public by 2010. Another 32 percent were sold, but 57 percent of these sales (around 18 percent of all companies) resulted in the founder's continuing in a regular job at the acquirer—not the ideal entrepreneurial exit. So well over half of all Inc. 500 companies were not able to become self-sustaining and create consistent positive value.

4 My estimate that fewer than one in fifty entrepreneurs lead their enterprises to the point where they are value producing and self-sustaining is an extrapolation of the fact cited by Shane (page 155) that only one startup in forty-three has any employees ten years after starting.

1

Success Requires More Than Entrepreneurship

Success, defined in whatever monetary and emotional terms you choose, requires more than being able to form a company around your idea. Ideas, and the companies formed around them, come and go. Very few create any tangible lasting value or emotional fulfillment. Even more heartbreaking is the all-too-common situation in which an entrepreneur succeeds in starting a new enterprise only for the enterprise to stagnate and slowly die. Entrepreneurs are commonly removed when outside investors are part of a startup. The following true story of Adam is an excellent example of an entrepreneur that started a great company only to be forced out because he could not deal with the competitive and organizational pressures that entrepreneurial leaders must face. As we shall see over the next twelve chapters, entrepreneurs like Adam1 can succeed in seeing their ideas become value producing and self-sustaining enterprises once they are armed with a basic set of startup leadership skills.