Is It Important for a Startup to Have a Visionary Leader?
WavePlay’s Guest Blog
Featuring the Ideas of Bill Reichert
Managing Director at Garage Technology Ventures
By Bill Reichert. Previously published on Quora.
It is much more important to have a team of leaders with a clear vision than to have a "visionary leader." Indeed, contrary to the popular mythology, the concept of a visionary leader is antithetical to the requirements for a successful startup. The implication in the question is that everyone else is a follower who buys into the leader's vision. But the reality of startup success is that founding teams need several leaders. While there may be an individual who is granted relatively higher responsibility, no individual can provide leadership across all the domains of expertise required to make a startup a success. That's why you need a team of leaders, with each individual taking on leadership responsibility across different specific domains, while still working together effectively as a collaborative team.
The concept of leadership is one of the most misunderstood and abused concepts in group organization. It is misunderstood as supporting hierarchical structures and decision processes. It is abused when individuals are anointed as leaders and take that to mean they have the knowledge and authority to disregard the contributions and capabilities of others.
The concept of a visionary is another misunderstood and abused concept when it comes to innovation and entrepreneurship. The mythology of entrepreneurship has ingrained the image of the visionary entrepreneur as the driver of innovation — the individual who sees the future and says, Why not? But the true history of entrepreneurial innovation is much more complicated and almost always involves a bunch of individuals bumping into each other and bouncing ideas off one another and then finally coming together around a shared vision. Usually that vision evolves as the team learns more about what is possible and what the market really values.
Companies started by "visionary leaders" tend to lack the flexibility and organizational strength to adjust to dynamic markets and changing technologies. Visionary leaders tend to be inventors — or worse, narcissists — not entrepreneurs. Inventors are focused on getting the world to embrace their vision, rather than being focused on solving a problem or exploiting an opportunity. Real entrepreneurs are focused on building a sustainable business using the best ideas, wherever they might come from. History tells us that some of the greatest entrepreneurs are happy to steal ideas from others. :-)
Entrepreneurial teams have a clear vision of what they are trying to accomplish, and that vision is shared — it is not the exclusive property of an individual founder.
So if you are an entrepreneur and you think you are a visionary, put a lid on it. If you think you have a vision, find others who share it, and build a team. If no one on that team has anything to add to make that vision even better, then you have the wrong team. If you are surrounded by people who say you are a visionary, then either they are useless sycophants, or they are lying to you. If they add skills and perspectives that you don't have, then maybe you have a team that can build a great company.
WavePlay’s June/July 2013 Guest Blog
Featuring the Ideas of Sean JacobsohnVenture Partner at Emergence Capital Partners
By Sean Jacobsohn. Previously published by Forbes
As demand for SaaS technologies grows exponentially, many startups are looking to business development as a way to increase sales in a cost-effective manner. The problem is, “business development” means something different to each person, and it’s very difficult to identify the best strategy to serve each startup’s specific needs and goals. In reality, there is no perfect formula. Over the last decade, I have managed business development in four SaaS companies: Elance, WageWorks, Cornerstone OnDemand, and YouSendIt. Each company required a different combination of partnerships to expand our reach and achieve our goals. Devising a smart business development strategy requires thoughtful planning and you must be willing to take some substantial, but smart, risks in order to reap the rewards.
Based on my experience at SaaS companies, and now as an investor at Emergence Capital Partners, I have pulled together suggestions about how to overcome the most common business development hurdles that emerge for early stage SaaS companies.
Hurdle #1: Finding the “right” partners for an early stage SaaS company.
Solution: In the early years, start-ups typically get the most out of revenue-enhancing deals such as partnerships with distributors, resellers, channel partners, and affiliates. These partnerships are based on the same model that had such great success in the installed software industry. However, it can be tough to find partners that are familiar with SaaS business models. Questions you might ask a partner to determine “fit” are: have you had success reselling another third party SaaS product and does our product fill an important gap in your product suite?
Hurdle #2: Most startup entrepreneurs have little or no experience formulating deals.
Solution: The typical CEO or company founder is a product guru—a technological visionary with a concept that makes business tasks run smoother, more efficiently and at lower cost. When a company has reached $1 million of annual bookings, it is typically time to hire a senior business development leader to start building partnerships. And, when structuring deals, it is helpful to require account managers and other enablement resources so that both sides have the firepower they need to successfully sell and support the relationship. Building in methods to measure success are also important to help keep the program on track and extract the most value from the relationship.
Hurdle #3: Many companies focus on what’s in it for them, versus the mutual benefit.
Solution: When you’re a young and hungry startup, it’s easy to get caught up in fanatically and selfishly pursuing your own goals. But, successful business development requires also considering your partners’ goals and priorities. You must forge a symbiotic win-win relationship in order to even attract a partner, let alone have success. Consider both sides of the equation, not just what’s in it for you.
Hurdle #4: It can be difficult to prioritize among various business development opportunities.
Solution: While it is good to have lots of interest in partnerships, it can definitely make running a business development program difficult when you’re already being pulled in so many directions. Early deals are also often the most time and resource intensive because there’s no model to use, which makes prioritizing even more important. Consider starting with partners that have already established a successful programs to leverage their existing expertise and experience, at least until you’re through the hyper-growth phase. Look for partners who have large customer bases and sell to the same buyer, and who are willing to quota their sales team on selling your product. Once you have a team of experts in place to devise and execute on your own strategy, then you can move into partnerships on less familiar ground.
Learn from the Leaders
One way to help you refine your strategy is by studying the partnership sequencing of leading SaaS companies. Take the time to read the historical press releases of leading companies such as Box, Axcient and Xero, You will see that Box focused on partners that already offer B2B SaaS solutions and secured partnerships with Insight, the #3 reseller of SharePoint and Microsoft’s #1 reseller overall and Softchoice, the #4 SharePoint reseller and #1 Microsoft reseller in Canada. Axcient has business development down to a science as well, with its extensive network of some 27,000 resellers generating most of its revenue. And, New Zealand-based startup Xero has figured out how to leverage business development internationally, by partnering with one of the largest payroll providers in the U.S., which earned it not only a stamp of approval from a massive player in the space but also a significant foot in the door with those existing customers.
Explore this subject further by reading Sean Jacobson’s white paper here.