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| Home - Industry Article - Jul 02 Issue |
The Perfect Software Entrepreneur
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6. All the really good entrepreneurs I know are excellent team builders. In the startup phase, they tend to be deeply involved in execution at all levels and can be sometimes accused of micro-management. But they focus on results – and not tasks, and learn to delegate when they have the right people in place. Then, they actively work for those they delegated to and become a part of the team as only the CEO can. The truly unusual, great leaders among the entrepreneurs I’ve known have been able to create incredible bonds of personal loyalty. They may, or may not be particularly charismatic. But their actions with employees at all times engender trust, and they take a genuine interest in their people. Such entrepreneurs have the ability to remain tough executives. But behind the scenes and unknown to most, they don’t miss sending flowers to the lowest-level employee when a relative is sick, writing personal congratulatory notes to associates or otherwise taking time-out to speak with employees at a personal level.
7. It’s rare that I find a company that doesn’t declare that “our people are our best asset.” The great ones take this to heart when the CEO personally hires executives that are better than themselves in a particular functional area, and then insists that their team do the same. They create a culture of hiring and supporting “A” players while insisting on a rapid exit for the “C” players. They don’t hire unless they have exactly the right fit. Then, they provide compensation that includes broad and performance-based equity sharing. As a result, the very best of these entrepreneurs have companies with low turnover. They even have managed to resist over-ramping their staff during the recent venture bubble at the insistence of their boards and investors. As a result, they currently have cash in the bank.
8. Successful entrepreneurs are different from a lot of corporate managers because they never fail. Or, it might be that they fail all the time. The difference is in the way that you look at it. While typical corporate managers view not meeting plan as a failure, a lot of successful entrepreneurs never really expect a plan to come out exactly right in the first place. They expect to deal with ambiguity. So they look at initiatives as a series of small experiments, each of which provide clues as for success. Each “failed” experiment creates for them new information and opportunities. Therefore, they make it their way to fail quickly and explicitly, but then to rebound through learning and persistence. Of course, not adapting to failure is also the unhealthiest form of entrepreneurship. But the truly great ones craft their plans so that they can adapt by failing over and over on the little things, and then making their corporate plans as a result. Of course, outsiders rarely hear of the “failures” that created overnight success.
9. Good entrepreneurs are great at raising capital (or getting funded within a larger organization). They understand this to be the single-biggest impediment to early success so they get personally good at it and never rely on a third-party to do it for them. The great ones are willing to spend money to make money by focusing on things that are strategic. But they make their capital last by implementing tight financial controls and understanding the margins on every aspect of their business even during the startup phase. As the business grows, they continually seek out and eliminate activities that don’t directly contribute to creating competitive advantage. The very best raise capital when they don’t need it.
10. Finally, the successful entrepreneurs I know and admire the most have a highly refined sense of ethics. More than just being just trustworthy, they see their businesses as extensions of themselves. They create a culture of being above board and they lead by creating win-win business relationships as example. The truly exceptional entrepreneurs I know also have another intangible quality that goes beyond just ethics. It can be best described as a kind of code of honor. As there is no rule book for this, I’m sure that in each case it comes from a personal code of behavior. Nevertheless, it is there, and it permeates the relationships with their customers, employees and stakeholders.
The beauty of our high technology industry is that we can rest assured that even in the down-times, innovation and the entrepreneurial spirit remains constant. The next generation of entrepreneurs is busily creating the future right now. The best of them share many of the qualities above. These are special people with special talents. I am grateful for them.
A Managing Director with The Chasm Group since 1995, Michael Tanner provides advisory and consulting services in the areas of market development strategy, building competitive advantage, positioning and new business planning. His clients are in the IT infrastructure, B2B and communications technology markets. Michael is also a regular keynoter at both public seminars and corporate events in the US and Europe where he speaks on topics of strategy, competitive advantage and managing for shareholder value.
 
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