Starting a business and leading one are two different things
19 November 2021
The majority of startups fail in the first few years. However, entrepreneurs still put life energy into new ventures, fueled by hope, excitement, intelligence and grit – because they believe in what they do and they are willing risk public failure.
It is no coincidence that new businesses fail during the early years when founders must transition between launching their business and leading it. The skills needed in those two phases are completely different, and each one is equally demanding. A founder who has difficulty leading a business greatly increases the risk of failure, which can take many forms.
To launch a business, a founder must have an almost single-minded focus on whatever the product or service is. Starting from zero, making something from nothing, founders’ lives are full of excitement, drive, high-stakes moments, and hopefully validation.
At the start, founders are a small informal group who is focused on whatever form of MVP they can make.
But leading a business is different – in order to succeed, founders must focus energy and attention on their team who is necessary to the business function. Leading a business involves creating value for employees, coordinating processes, creating intelligent job descriptions that satisfy need and reflect talent, and coming up with policies. Most importantly, leading requires telling the story of the business goals and purpose to employees and investors so that they understand what value the business has for them.
As the business grows, there are more functions than the informal beginning, more people involved, and the business desperately needs communication and policies to guide how it operates. Any group forms hierarchies, and founders have the opportunity to influence the structure of them in their business so that the hierarchies benefit the business, not harm it.
Successfully starting a business does not give someone the necessary skills to lead one. It is not a natural extension, but it is not impossible to learn how to be a great leader if the founder is conscious of the difference between the two phases and is willing to learn. We all have our limitations – knowing that we don’t know something – and founders being aware of their limitations is necessary to make the transition from launching to leading.
Learning the skill of how to solicit and use advice to become a leader is straightforward, and becoming a good leader will protect the early success of a startup and secure its future.
Share this post with someone who might be interested using the buttons below, or head back to Practical Resources.
Receive ideas like this every week: new articles on leadership and running a business you started.