The role of a startup founder

a founder is someone who starts an organization [1]

In the beginning its just you, or you & your cofounders

if it’s just you then you founded the organization with some purpose you chose

if you have cofounders, then you must align on the purpose of the organization

but in any case this organization was founded to serve a purpose

so as a founder, your role is to

define the purpose of the organization

make the organization serve its purpose

I'm building startups and think “startup founder” is less abstract and hence more useful than “organizational leader”, so I’ll hone in on founders of startup companies

a startup's purpose is already defined: a startup's purpose is to grow really big really fast [2]

growing really big typically means becoming a unicorn. you could also pick a revenue target you think is big and multiply it by 10. really big then means “way bigger than you thought was big”

growing really fast could be interpreted as: become really big in <5 years [3]

if the purpose of a startup is to get really big really fast, then this means

the role of a startup founder is to make the startup get really big really fast

founder ≠ leader

the definition of founder is simple: you started the company

but... the social usage of “founder” in the startup world refers to being an organizational leader: the person who leads the startup to get really big really fast

It feels pedantic to say “organizational leader” if others just say “founder”

but it’s worth noting that being a founder by title is not enough

in one study more than 75% of founders stepped down as CEO by the time their company went public and 80% of these founders were forced to step down.[4] Notable examples are Steve jobs being kicked from Apple, and Elon Musk being kicked from Paypal. You can find more recent examples online (like this thread from the Udemy founder)[5]

founders are forced to step down when a majority of shareholders of the company vote you out

shareholders can vote you out for many reasons. It may be a power struggle, but often it’s that they’ve identified someone as more competent for the role and vote you out

Alternatively, your own team members can quit and join a team with better leadership. There’s little reason they should stick around if your leadership is poor especially if they are smart + ambitious and you are competing with other smart + ambitious teams

What I’m getting at is I feel that being called a founder is an easy title to have

Just start an organization and you’re a founder, almost anyone can do that

if you claim a leadership title like founder without taking responsibility of leadership, you likely won’t succeed

in a good case no one will remember you, in a bad case you’ll be remembered as a poor leader

anyway, substance over signal let’s move on

hiring

in a startup you build stuff, ship stuff, grow, don't grow, get stuck, unstuck yourself

and at some point, you hire people

now there are other people on the ship and you feel your role evolving

you have employee one-on-ones, customer call in 8 minutes, investor call after, need to fix the code review process, respond to a bug report, oh and don't forget to file your 83b tax election

oh god

you're doing the best you can but it also feels like so much is wrong

so you also need to have the mind of an athlete/warrior/other resilient archetype which means you need to cope with things & persevere

You need to stay focused to do the right stuff, while fixing the broken stuff all while many things feel broken

So you eventually sit back like "wow this got hard... what am I supposed to do next?”

I got stuck in this strange loop for a while constantly asking "what is my role?/what do i do now?” and then hitting a wall when I realized there's so much and its all changing fast

until a realization hit me: the role never changed

as a founder the role has always been to make the startup grow really big really fast

all that changed is I hired people and this means I can explore new sets of actions

for example when working alone “defining the vision” of a company is just choosing what you like

maybe you do some market research, but you figure out what you want, and just start executing

as you grow a team "defining the vision" involves getting buy-in from others, and distilling it into some written form or other sharable media as a tool to inspire and drive alignment

you can also still do the day-to-day work you did from before you hired except instead of doing everything alone it becomes better to delegate to others who do it better than you

now you're delegating and managing and you may feel your role is to be a manager but this is just an emergent role based on the company stage

eventually you need to hire people to manage for you, and you manage them and you can hire recruiters to help with hiring

the point is day-to-day you will wear many hats but founders aren't meant to wear these hats longterm

your role is to make the startup grow really big really fast

all these hats you wear along the way are an emergent property of doing whatever it takes

this leads to a rather blunt, but important corollary

if a company is not growing really big really fast you’re not doing your job well

the responsibility cascades up the org-chart to founders

"we couldn’t fundraise" → are you growing really big really fast? investors love that

"a competitor beat us" → Their team beat you. You hired your team and you lead this team

"growth stagnated because the market is bad" → you chose the market sillywilly, pivot

“my health rapidly deteriorated” → This is a major concern. If it's really bad you should consider bringing in an interim leader to replace you while sick and let the team know you need the time. Don’t hurt yourself if you need the time. That said, if you stay and can’t do anything this is still your problem if the role isn't met

it even happens for things you delegated

"this person I hired isn't doing the job right" → give feedback and let them know what's needed in the role. If they aren't fitting the role, you may have to part ways

"this team handling {X} thing isn't hitting the targets needed" → Chat with the team-lead & figure out why. Middle-managers are similar to you. They have clear targets and accountability for outcomes they own. Teams don't hit every goal every time. You likely don't either, so listen with empathy. You are responsible for setting high expectations + learning why things are/aren't working, but you must communicate these expectations instead of just getting upset with people

the founder’s identity crisis

When I did academia, I worked in 4 different research labs doing motion planning for robots

Then I went to Cruise and I did motion planning for autonomous cars

In each job I used different tools but I had a strong foundation in robot motion planning

If someone asked me "what do you do?" I could say: I do robot motion planning, here are some of my publications, patents and work history

I felt way more stable as a person in academia and industry as opposed to as a founder

I think this is because I (and I imagine many others) define themselves based on

1) what they do

and

2) how well they do it

if you define yourself based on what you do, but constantly change what you do as a founder then you'll have trouble figuring out who you are

if you define yourself based on how well you do things, but as a founder you hire people better than you at things to replace you in those things, then you'll feel replaceable, and feeling replaceable can cause anxiety

A way out of this cognitive death spiral is to recognize that: founders can specialize, and founders can “do well" at being a founder

The difference is that there are fewer founders than traditional employees and there is far less literature describing what a "good" founder is as opposed to what a good employee is

So let's simplify this by defining 1) how founders specialize, and 2) what a good founder is

how founders can specialize

If you want to specialize as a founder, you need skills that are used regularly for the duration of the company

a non-exhaustive list includes

critical thinking: building the most accurate model of the world you can
communication: distilling your thoughts so others understand

delegation: assessing talent, scoping out role, deciding who to give it to

empathy: understanding what you, your team, and your customers need

2) defining what a good founder is

Just as a good employee is someone who performs well in their role

A good founder is someone who performs well in the role of being a founder

This means...

you're a good startup founder if you're good at making startups get really big really fast

closing thoughts

defining your role of being a startup founder leads to more proactive questions

"what is my role/what should I do next?" becomes → "Are we growing? Why?/Why not? Are we set to grow big? How do we enable faster growth?”

it also helps avoid the founder identity crisis. By knowing your role you can define what it is you specialize in and what it means to be good at what you do

footnotes

[2] http://www.paulgraham.com/growth.html is one of my personal favourite essays. I largely define the purpose of a startup based on it + common social usage of "startup"

[3] compound growth means X% increase daily/weekly/monthly, whatever interval you want to be accountable for. This is opposed to say, 5 new customers per week which is a decreasing growth rate despite linear increase in users. The “5 years to get really big” is just a rough number based on Unicorns I like that grew fast (see here). It’s not a hard rule, but the world changes fast enough that if you don’t become big after 5 years on a single product you’ll likely be outdated and have to re-evaluate most of your startup. It'd be likely that either the world moves on without you, or a competitor swoops in faster than you and takes the market

[5] I outlined that founders can get kicked out if your board / employees don’t like you as a leader. I used Elon Musk/Jobs as examples of folks who got kicked out of their companies. I’m not claiming they are poor leaders. Something didn’t work out, I wasn’t there, these guys obviously turned out ok. But this does highlight the point of how common it is for founders to be kicked from their role if stakeholders don’t like their leadership

[6] This cascading responsibility argument assumes a hierarchical org-structure. I haven't thought much about alternative org-structures but find the topic neat and may write about it in the future.