Chapter 6: : The Three Most Important People in Your Business
“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don't play together, the club won't be worth a dime.” - Babe Ruth
Normally when a business starts off, there is one person, the entrepreneur.
As a serial entrepreneur in the tech-space, I like finding problems and daydreaming up solutions to tackle them, then dreaming up a business from that solution. Without the entrepreneur, there will be no spark in your business. There is no one to create.
As an entrepreneur, I loved creating things I dreamt up that solved problems for people. The other powerful thing an entrepreneur possesses is vision. I was able to dream up a big dream of where I could see the company in 3, 5 and 10 years.
While the entrepreneur is normally a fabulous visionary and a very good problem solver, they are normally not detailed people. As an entrepreneur, I was weak at details and I definitely got bored quickly once a product was created and launched. Managing a small team is okay, but once the team got too big it would sap my energy.
As mentioned earlier in this book, I personally believe you shouldn't waste time trying to rectify your weaknesses. I believe you should focus on your strengths and get other people to come in to complement you where you are weak.
Work to your strengths and find people who have other strengths to help you;
and that's where the second important person comes in - the manager.
I know from my experience that while my strength as an entrepreneur is to come up with good ideas, the manager is the person who comes in and makes things happen. They provide details to the idea that the entrepreneur comes up with.
The manager also plans out the roadmap and what needs to happen in order for the entrepreneur to fulfil his 5-year or 10-year vision for the business. You need someone who has the traits of a manager, to ensure that people carry out your ideas. A manager will help you lay out details for your plans and your vision and make sure your team members will carry out the plans to fruition. They will keep track of the finances and bring a dose of realism to your sometimes over-ambitious ideas.
While a pure entrepreneurial business is usually ad-hoc, the manager comes in and designs systems to make sure that the business runs smoothly, and ensures that the team is doing what they are supposed to do.
The manager brings discipline to the business. A good manager will ensure that operations run smoothly, and the day to day functioning of the business is at an optimised level.
A good manager is usually very calm and collected under pressure; they are able to deal with unforeseen events and people and resolve issues without getting overly emotional and stressed. Therefore, they are more likely to be able to handle teams of hundreds and possibly thousands of people, whereas the entrepreneur normally gets drained managing teams of more than 20 people.
Of course, there are exceptions to this rule, such as Jack Ma of Alibaba who is a balanced entrepreneur and manager. But that is the exception rather than the norm. If you stop enjoying your business as an entrepreneur because you have to spend lots of time managing people, then you may have hit that ceiling.
At the creation stage, the manager also plays a pivotal role in the creation of your new IT invention. Because managers are generally detailed oriented, their input at the creation and invention stage will generally result in a more robust, better product as they are able to work out more details of the product.
Once your product has reached a stage of market readiness, then you will need the third person - the marketer.
The marketer is the one who will help you build the business by finding and attracting for you the right people that will buy your product. A good marketer will be able to help you to systemise your business to develop a sales and marketing system. They will be able to scale the business up for you.
Without the marketer, you are not going to get sales in your business. Without sales, your start-up can end up as another business failure statistic. That is why the marketer is absolutely critical for your business.
The marketer can play an important part by providing valuable input at your product development phase too. The Marketer's input will help your product to be developed in a way that is more acceptable for the marketplace. In fact, they are able to see things more from an end-user’s perspective and provide you with information that will help your product stand out and be unique from the existing solutions in the marketplace.
While the entrepreneur and manager might be more product-oriented, the marketer is more market-oriented and their input could help the product become more appealing.
Now I’m fully aware that at the start of your business, you are not going to have the budget and the resources to employ a manager and a marketer for your business. So you will have to play all three roles at the start. A useful way is to think, “If I were a manager/marketer, what would I do in this situation?”
Then as your business grows and funding becomes available, get a good manager in place to balance you as the visionary of the business. Finally, add your marketer when you are ready to commercialise.
Remember, the last thing you want in your business is three entrepreneurs, where nothing actually gets to the market. If you lack a manager your business will be chaotic and unable to grow beyond a certain size, and your team will get frustrated because you'll go nowhere fast. If you don't have a marketer your business will not get the sales it needs to grow and become sustainable.
Make sure you have plans to have all three key people in place.
As an innovative-type entrepreneur who has this grandiose vision, I can guarantee that you will often be frustrated at this person who plays the manager role. But you must be aware of this person’s very important role in the business that helps balance you and helps bring things to fruition.
Naturally, because of the detailed orientation of the manager and the big picture orientation of the entrepreneur, the two may end up frustrating one another. To top it off, you have the marketer's input from a market-orientation which will place further friction between the three of you.
You need to be willing not to take things personally, because they too will be frustrated with your constant innovations and seemly endless change of plans in pursuit of creating the better product.
All three of you need to be aware of each other’s roles, and know that the three of you play a critical role in ensuring that the business is a success. So make sure you create a good environment and protocols for exchanging ideas and for discussion so that you don’t end up clashing with each other.
You need the manager type because I can guarantee that you will get bored after two or three system installations. You will be looking for ways to innovate again in no time, looking for new problems to solve. You need someone to be taking over things like these, such as installing products for your customers.
You need a manager to observe you and systemise processes so that others can be trained and taught to take over this role, while you are creating new things to improve your product. This is an essential part of scaling your business for growth.
Having a manager can ensure that your product delivery is consistent and replicable. Without these elements it is very difficult for your business to scale up for growth.
If you keep on innovating, your team will get very frustrated with you. The manager will need to keep changing his plans and the marketer will need to keep changing their marketing message or get frustrated because they have nothing to bring to the market to sell.
That is why it is important to have clear roles and responsibilities in the business.
You need to define the various responsibilities in the business and assign a leader to each role. Otherwise you could well be stepping on each other's toes all the time and duplicating work. By being clear on each others' roles and responsibilities, it will help the three of you working together.
Don't Mess with the Original
This is what I generally did with my businesses to ensure that everyone, including myself as the entrepreneur, was happy in the business.
After creating and launching a product to the marketplace, what many entrepreneurs do is they continue meddling and tweaking their original software or product. This can frustrate the rest of the team to no end.
What would be a better idea is for the entrepreneur to focus on a second solution, a second version or an additional piece to the original solution.
In this way, the original product can still be sold. The manager is happy because they are able to plan and develop systems and processes around the original product. The marketer is happy because they can continue selling the original product and improve the marketing system to get more customers. The entrepreneur is also happy because they are able to tinker around and develop new solutions for problems.
By doing this, my businesses were able to have good systems and processes, good marketing and good innovation. All these factors have combined to create many successful start-ups for me. This was the key to generating good cashflow, deliver consistent value to customers, have an efficient operation and remain innovative.
Timing is Everything
As I mentioned previously, the entrepreneur, as a general rule of thumb, is able to manage up to 20 people. Beyond that, the entrepreneur gets frustrated and tired, and wants to go back to their laboratory to create new things.
While you may have the manager in the business before you hit 20 people, you will have to decide at some point in time to relinquish your control of your business to the manager as soon as you are getting bored with the day to day running of the business.
I suppose a good question to regularly ask yourself is, 'Will the manager be better at doing the things I am doing now on a daily basis?". If yes, then it is perhaps time to hand over the 'CEO' function to your manager and step down from your business.
I always tell my mentees, "When your start-up starts to look like a business then it's time to let go." When your business is ready to be repeat and scale its products, then it is time to hand the reins over to your manager.
Of course it would be prudent for you to still play an advisory role in the business from that point in time. For many, it is better that you play a visionary, strategic and innovation role as the entrepreneur.
Just because you step aside doesn't mean you have to sell your shares in the business. You can still retain your majority shareholding, but the captain of the ship is your manager.
For me it was difficult to relinquish control over the very business that I had started to someone else, but I knew that each time I did it, it was essential and important for the growth of the business. If I continued doing the role as a CEO I would end up being stressed and the business would never realise its full potential.
There is always a temptation to interfere, but you need to empower your new CEO and support their decisions, even though you may not always agree with them.
As for your marketer, it is usually not a good idea to get them in on a full-time basis while you are in product development. It's best to engage them on a part-time advisory basis at the start. Getting them in too early in the business with nothing to sell will cause enormous dissatisfaction on their part.
I would suggest it would be towards the end of your product development that you engage a marketer on a full-time basis. Their input will be invaluable for you to add the final touch to your product and they will be able to start doing the groundwork for your product.
They will be able to conduct some market research and testing, and at the same time work on your marketing and sales system. Ultimately, this will lead to scaling of your business rapidly once your product is launched.
Mission, Vision and Values
I know you are probably thinking now, what is going to stop my manager from ruining my business as the CEO?
That's where your mission, values and vision come into play.
For my businesses, our mission was always to process data and aggregate information for our customers. So no matter who was running the company, we never strayed from the mission of aggregating data for certain markets.
If it wasn't anything to do with data processing, we would stay out of it. For me as the entrepreneur, I would constantly refine and seek ways to improve data processing. For the manager, they would put processes, systems and manage resources so that we are delivering on our promise of data processing. Finally, our marketer would never stray from our brand as a data processing company, and marketed the business as such.
Secondly, as the founder and entrepreneur, you set the vision of the company. The clearer you are with your vision and the better you communicate your vision, the more likely your CEO and marketer will be able to work towards that alongside you.
Remember your CEO is the person who can help you develop the necessary plans and direct the required resources to help your business move towards your vision.
Your vision will guide your CEO in their decision-making and be able to adapt to changes in the fast-changing IT environment.
For example, if you are a software development company, the landscape is constantly changing. It used to be that computer software applications were the platform, and that you had to buy a piece of software, download it and install it to your PC.
With the advent of the Web Browser, that game has changed significantly, with most applications running on a browser and using cloud computers.
If you have a strong vision, your CEO and company should be able to quickly adapt to this. And in some cases, your vision can even help your CEO and company spot opportunities on the horizon and capitalise on them.
Your marketer will also be able to get feedback from customers relevant to hastening your efforts towards your vision. At the same time, you as the entrepreneur can continue developing solutions towards making your vision a reality.
A clear vision will help the three of your key team members work together towards a common ideal.
Finally, values are important for your team to work together.
If you can agree to the values of your company from the start, you will have less potential for friction. It also provides a framework for where decisions are made in your business.
For instance, if your CEO wants to cut cost to increase profits, and at the same time your marketer has identified a prime opportunity that the company could profit from, but requires a significant investment, which path should the company take?
That's where your company values are able to guide your business. If you have agreed that security of profits is more important than risking capital for the sake of growth, then the CEO will have the final say. But if you place a higher value is on risk-taking and fast growth, then the marketer's idea may be the one your team moves forward with.
Your company values, mission and vision are like the constitution of a country; they will guide your team and make sure your business does not get distracted and loses its essence. Be sure to invest the time and effort to get clear on it during your daydreaming sessions.
The Final Word on Your Team
No man is an island. Don't be fooled by the glamorous 'one man did it all and reached the top' stories that the media portrays as the way to success.
Creating a successful start-up business is all about teamwork. It requires careful planning of who you need in the business, what skills and experience they have, and when you are going to hire them.
It also requires succession planning. Remember, because someone is good at marketing or managing a start-up may not mean that they have the experience and ability to market or manage a $50M company. Plan for the succession of each of those team members, as well as you as the entrepreneur. Dream of what the future might be like and dream what traits, experience and characteristics you’d like your key team members to have.
Remember, this is for the good of your business and its future. Don't let your emotional attachments or your ego get in the way of your company rising up to its full potential. Do what you enjoy doing as an entrepreneur, and let other people with different strengths work with you to grow your business.