Taking and Maintaining Control — a Primer for Founders and Other Delicate Persons

Big Red Car here. Another beauty here in paradise. Sorry, it’s only going to be sunny and 60F and cloudy this afternoon. A day not to forget one’s sunscreen.

But, hey, it’s probably nice and warm, sunny where you are also. Right?

[The Big Red Car can be a little obnoxious. Beware.]

So, the issue today is control. Taking control. Maintaining control. Exercising control. Here it goes.

The audience today is the founder, entrepreneur, startup CEO who is trying to change the world or cure its pain. Your pick.

That startup person is going to take a vision and make into reality while making a lot of money in the process. The world will pay you well to change it, to reroute the Amazon River, or to remove its pain. Very well indeed.

As we know, you can do many more good works with a fat wallet than you can with an empty soup can. So, let’s not be bashful about making a buck in the process.

And here’s the rub — the vast majority of venture funded startups, even the wildly successful ones, change their CEOs in the first four years of their existence. The vast majority. That means you start the fire and someone else gets your warm seat at the fire’s edge. That sucks.

Why, Big Red Car?

Because, dear friend, you lost control. Hard truths today, lovies. Hard truths.

What is control, Big Red Car?

Control starts with the founders. Are you, founder person, under control?

To cut to chase here, do you have a clear vision, mission, strategy, tactics, objectives, values, culture to transform your idea into reality?

Do you have a business engine canvas, a business process graphic, dollar weighted organization charts showing the cost of your growth, a pitch deck, an elevator/taxi/boardroom pitch?

Is your company foundership under control? Are you personally under control? Did you floss last night?

The answer is — maybe? So what?

The real answer is that even when you do, the world will want a little more. As you learn to control the ship, your tolerances will become even tighter and more precise.

There is a huge difference between being a private pilot, an instrument rated pilot, a commercial pilot, and an ATP. The FAA makes you fly better to get each designation. And, then when you get all that stuff, experience comes into play.

Remember the pilot (Sully Sullenberger, US Airways Flight 1549) who brilliantly glided his plane onto the East River in NYC when his jet engines ingested some seagulls? The guy was Air Force Academy and had a jillion hours of flight time and was in control all the way to the water. He was also a glider pilot. Handy for that lot, no?

His expertise and control saved lives. He was under control personally. The cockpit was under his control. Those passengers lives were subject to his control. Your expertise and control is going to build a great company.

How do I get control, Big Red Car?

In life, you do not receive control or power — YOU TAKE CONTROL. YOU TAKE POWER.

Whew, that was strenuous, all that shouting. Sorry.

You take control, my darlings. It is a frame of mind.

Sully Sullenberger was the captain of that aircraft and when air traffic control tried to divert him to Teterboro, he took control deciding that was a death sentence. He didn’t debate it, he TOOK CONTROL.

[No need to shout, Big Red Car. Calm down, big fella.]

The Queen of England  is not going to come down to your company, walk through the cubes, find you and tap you on the shoulder with a sword and tell you, “I hereby convey unto you, oh startup entrepreneur, control of this untidy little mess you’ve started.”

If she does, call me. I dig the Queen.

How do you maintain control, Big Red Control?

You ensure that you have control on the balance sheet, in the boardroom, on the cap table.

Do not ever put yourself in the position of being held hostage to money. Never. Repeat this back to me. Now. Have enough money.

When the VCs tell you that “twelve months runway will be just fine” — do not believe them. They are the Devil.

They want you to have to come back for another dose holding a tin cup with your knee pads on. They want you on a short leash because founders on short leashes are obedient founders and will roll over and obey. Make damn sure you have enough money. Twenty-four months is a very nice runway that you can land a 757 on. And why not?

Keep control of the board. Listen — put your allies on the board. Good men and women. Allies.

Don’t put your drug dealer on the board. Put good people but people who will give you a “get out of jail free” card when you invariably screw up.

There, the Big Red Car said it. Keep control of your board. At all times. Do not go Boy Scout on me here.

You are a warrior and you do not ever get what you deserve, you get what you negotiate. Negotiate with people who like you. Huh? That easy? Yes, that easy.

In the cap table, maintain strict control through the shareholder rights conveyed by your stock ownership. This is the backstop to having control through your board. Have the votes to control the outcomes at all times. Use your shares and also those of other founders through raw structure (two classes of stock, perhaps like FB), voting agreements, shareholder agreements — pencil whip the Hell out of this one. Make it so in writing.

How do I exercise control, Big Red Car?

You are a great person and you are not going to be obnoxious, are you? But you are going to be in control, so others will find out.

Shoot, move, communicate.

Make damn sure that everyone knows the plan — that vision, mission, etc stuff — and buys into it. Make sure that the company culture embraces the likely attainment of the objectives in the plan.

Bad cultural fit? Get rid of that person. Get rid of them fast. You, are in control. Seize control. Exercise control. Get rid of those who are energy sinks (technical thermodynamics term from college, sorry). An energy sink is someone who absorbs, shoplifts, kidnaps energy from the enterprise rather than generating energy. There is 33 years of CEOing behind that comment. You can rent it for nothing. Trust me on this one.

Be accessible both to the team and the board. Lull the board into a state of suspended animation by the quality of your information, the efficiency of your board meetings, the sincerity of your informing them of your successes and failures. Be a model CEO but maintain control while doing it.

Never, ever, ever tell boardmembers or investors stuff which will propel them to dial up their friend in recruiting who can find them a new CEO in ten minutes. Do not tell people bad stuff that they will fire you for. I did NOT say mislead them or to prevent them from having the information they are entitled to.

Do not say, “Wow, I’m on the verge of burnout. My wife says I need to get a job that will get me home by six o’clock and I think I might be clinically depressed.”

You will no longer be the CEO in about twelve days. Trust me on this one.

So, dear founder entrepreneur CEO, there it is.

Control. It’s the breakfast of champions and you are a champion. Yes, you are!

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be good to yourself. Take and maintain and exercise control.you 

  • Solid advice JLM.
    If you can keep control, do it. If you can’t, still act like you do.

    • JLM

      .
      Better advice from you, Wm.

      If you can make yourself indispensable to the company, that is good.

      Of course, Charlie Degaulle said, “The cemeteries are filled with indispensable men.”

      BRC
      http://www.themusingsofthebigredcar.com

  • Interesting advice. Is this from your own experience? I wrote about something similar in http://www.globalfounders.london/blog/why-founders-get-fired-from-their-own-companies

    • JLM

      .
      Sierra —

      Nice read and lovely website(s).

      The Boss was a CEO of public and private companies for 33 years. From the start, he’s been a control freak but, more importantly, as a business strategy he quickly discovered the pragmatic and practical advantages of controlling one’s own destiny in the C suite, the boardroom, on the cap table, and at the pay window.

      The voices in his head are all his own.

      He works with startups primarily. In your similar article, you are dealing with the babies who have been able to exit the cradle and walk around the nursery. The Boss deals with them from the moment of conception until they can talk and walk. Bit more granular and vulnerable.

      It’s all real because there is really no other way, is there?

      BRC
      http://www.themusingsofthebigredcar.com

      • Thanks for your reply. Your post made me think though- why should Founder CEOs be penalized if they are going through a rough patch? All great leaders have moments of vulnerability and weakness. I think perhaps an integral part of the management team should include a counselor- perhaps similar to Counselor Troi in Star Trek: TNG. What do you think?

        • JLM

          .
          Hard not to agree with you since I run a little shop called The Wisdom of the Campfire. By invitation only, I advise startup CEOs under the guise of coaching.

          If you don’t hit a rough patch, you’re not really in charge. As Eisenhower said, “The first casualty upon contact with the enemy is the plan.”

          The very best athletes in the world, at the top of their game, employ coaches to get that last 0.00001% of improvement. Why not CEOs?

          I find that enlightened VCs are requiring their CEOs to get such assistance.

          One of the most important aspects of a sound coaching arrangement is the ability for a CEO to unburden themselves to someone who has actually been a CEO and who cannot fire them and who has no fiduciary duty to report bad news to other boardmembers or investors.

          It’s a hard world out there for a CEO and a smart CEO gets as much assistance as they can. It’s always cheaper to rent experience than to create it.

          Maybe I forgot to mention — it works.

          BRC
          http://www.themusingsofthebigredcar.com

          • Brett Maloley

            “if you don’t hit a rough patch, you’re not really in charge” but that doesn’t mean that Founder/CEOs shouldn’t be penalized for “going through a rough patch” does it? I’m a startup founder/CEO and if the point comes that somebody tries to remove me from my company… they’re going to have to drag me out of here kicking and screaming; but that isn’t to say that I don’t have to earn the right to stay. Obviously, it is unrealistic for anyone, in any walk of life, to go without their struggles… but that doesn’t (and in my opinion shouldn’t) make these struggles acceptable. When you’re steering the ship… you get credit for the wins and you get blamed for the losses, somebody always needs to be accountable.

            My biggest takeaway from this post is that maintaining control is important for just that reason… to mitigate the damage caused by failures, given that operating in an ecosystem where fear of failure hamstrings true growth and progress. I think a lot of startup founder/CEOs get removed because they’re not good enough anymore and I think, generally speaking, thats how life works… I wanted to play baseball for the rest of my life and I couldn’t because I got to a point where I was no longer good enough to keep playing. Not to beat a dead horse… but isn’t the aforementioned control an asset to control the variables that may prevent a founder/CEO, from staying in the game, assuming that they are actually the best man/women for the job?

            Not everybody gets a trophy, thats how it should be… but the best team needs to actually get the trophy and if the guy running the tournament gives the trophy to his kid’s team when they came in 2nd, it doesn’t work.

          • JLM

            .
            Big difference — YOU didn’t own the league, the team, or the game.

            In entrepreneurial business, YOU may actually own the company. It is property.

            Many CEOs are too quick to do the “right thing” rather than owning their own destiny.

            When you own the company, you are entitled to do whatever you want. The very best CEOs ultimately work themselves out of a job by hiring brilliant people and delegating everything.

            The best combat engineer company I ever ran in the Army, I went to the Officer’s Club pool at 3:00 PM three days a week. The General spied me there and said, “WTF?”

            I said, “We made the highest score in the entire US Army on our ARTEP last week (Army Training and Evalution Program — World Series exam).

            He said, “Carry on, Captain.”

            You own the company. You build it in your image. You pick the fruit. You enjy life. Sometimes, it is all about YOU. You earned that right.

            BRC
            http://www.themusingsofthebigredcar.com

  • Brisk astringent. Thanks.

  • jim mchugh

    Current conditions: Pease Air Force Base / Portsmouth (KPSM) – Sunny, 23F, wind chill 14F, West 8mph, visibility 10 miles (easy to spot the VCs coming in)

  • At the same time, there are CEOs that are awesome at taking an idea and turning it into a business, but they really stink at managing people and building the business. They need to go. Not every founder is capable of seeing the company all the way through. Yet, the paradox is the companies that are seen all the way through by founders are generally more successful.

    • JLM

      .’
      This is exactly why founders should have co-founders.

      It is fine to be an idea guy but someone has to be the skipper. Great ships do not lie in harbors, do not stay shackled to the dock. They venture forth into the wind, the waves.

      But even the Ship of Fools had a captain.

      Venture guys should look at the team and fund the team. Better make damn sure you’ve got a point guard on that team somewhere.

      Go, Heels!

      BRC
      http://www.themusingsofthebigredcar.com

    • sigmaalgebra

      If they are really good at building a business, that is, a good business, then that business will be making money, earnings, not just revenue, and, as a saying goes, plenty of earnings cover over a lot of problems.

      If the guy is really a social doofus, and each yacht club has a lot of such members, then he can hire a COO, an executive secretary, a head of HR, and a personal staff that can do a lot to keep him out of trouble.

      In fact, as we know far too well, some real, total social doofus types have become POTUS. Well, some such have also remained CEOs of the successful businesses they started.

      Or, for a founder of a startup, first make money and then sweat the small stuff.

      This is all just my external observation and intended approach — BRC and the Boss may have objections, revisions, or just better advice.

  • Brett Maloley

    That one really helped me get off the schneid, this morning and set the tone for the day. Thanks BRC.

  • JLM

    .
    Controlling your company and destiny are more important than ever. How do you do it?

    Read this and learn.

    http://themusingsofthebigredcar.com/taking-and-maintaining-control-a-primer-for-founders-and-other-delicate-persons/

    BRC
    http://www.themusingsofthebigredcar.com