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!