The story goes like this:
The whip smart but irascible founder develops a real-time social media platform restricted to monosyllables like “Wow” and “Epic.” Soon, millions of middle schoolers adopt the service (primarily to comment on Justin Bieber), and not long after normal people who think like middle schoolers are using the service too. The founder has hired a bunch of employees who are only barely out of middle school themselves. Bean bags, Golden Retrievers, and keg parties seem to be major components of the company’s strategy. At the board meeting (which they hold off-site since one of the VCs is allergic to dogs) one of the expensive suits from Sand Hill road brings up the topic:
“So, ah…Eric. It’s been pretty remarkable what you’ve done in growing the company to where it is.”
[Eric smiles weakly and mouths ‘thank you’]
“…However…I think it’s time we think long-term about the company’s prospects and maybe …. You know … consider what we might be able to accomplish if we brought in [these words hit Eric like darts] more experienced leadership.”
Presumably, the experienced CEO will come in and bring order (and money) out of the chaos. He will, of course, “know what to do” in thousands of sticky situations involving people, processes, product, and other things that begin with “p.”
There’s just one problem with the new CEO:
It’s been a long time since he was in middle school.
The One Thing That’s Important
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The customer is the company. Not just at first. Customers are irreducible. Unless you have customers, you don’t have a company. You can strip away everything else and the patient is still breathing, but cut out customers and the company ceases to be a company.
As Peter Drucker pointed out half a century ago:
“There are no results within the organization. All the results are on the outside. The only business results, for instance, are produced by a customer […]”(The Effective Executive).
Customer in Chief
The role of the founder is to be the first customer.
When you’re first starting out, you are living in a shadow world isolated from reality by thick clouds of consultant-produced haze. It may be months before you can sell an actual product to an actual customer and cut through the haze (and hopefully the consultants) into objective reality. But until then, what is to guide you?
This is the founder’s great moment. He knows where to go because he is (himself) the customer. He has been living, up until now, with the aching absence (like a phantom limb) of a product that he will give birth.
This product is being built for him. Like Neo, he is the first to feel that there is something wrong with the universe, and until the product is built, the splinter in his mind cannot be removed.
It was like this for Marc Andreessen when he started Netscape. Ben Horowitz writes:
“My friend Marc Andreessen invented the web browser and it is as though he invented it exclusively for his own personal use. Marc absorbs more information than anyone I’ve ever known or even heard about. […]. He had to invent the browser, because otherwise there wouldn’t have been nearly enough information for him to absorb.”
It was like this for Drew Houston starting Dropbox:
“He planned to work during the four-hour ride from Boston but forgot his USB memory stick, leaving him with a laptop and no code to mess with. Frustrated, he immediately started building technology to synch files over the Web.”
It was the same for my company. Bomgar started because my friend Joel Bomgar didn’t want to drive anymore to fix computer problems. Building a remote support product removed the splinter. The fact that thousands of other IT workers wanted it too was an addendum.
And does anyone really believe that Facebook could have been created by an adult?
The founder doesn’t know much about business, but what he does know is the only thing that’s really important. The customer.
What’s Good for the Goose…
People act like a startup and a business are two different things. They are not. Customers are at the heart of both, and forgetting this (as many stuffy multi-product, multi-national corporate dinosaurs do) is a recipe for self-destruction or (worse) mediocrity, with thousands of locked-in, but disgruntled customers.
The problem with bringing in a new hot shot CEO is that he (by virtue of his experience not in spite of it) has an almost impossible time being the customer. He can’t force himself to like Justin Bieber, and “Epic” is a poem by Homer. He may succeed in turning the successful startup into a stodgy corporate eminence . . . but who really wants that?