Being in control versus being a control freak in a lean startup

by Jennifer Hepworth

I’ve been thinking a lot recently about the notion of control. I’m generally a person who feels most comfortable in the driving seat, having decided on a destination, figured out the best way to get there and chosen the sound track. This attitude has gotten me a lot of places, and I think a strong sense of personal responsibility for outcomes is an important quality and a Good Thing.

However.

There’s a line. On one side of the line is being in control and on the other is being a control freak. I’m not saying I’ve been there and made large and messy mistakes and learned the hard way that control-freakery must be avoided, but I’m fortunate enough to have met some very smart people with relevant things to say on the topic which will hopefully prevent me from heading down that path.

1. Great entrepreneurs know what they’re bad at, and hire awesome people to do it for them (Mike Cassidy).

In some ways, Steve Jobs was the consummate control freak (just check out Apple’s wheels within wheels org chart), and he certainly liked being in control. However, though he was clear on the engineering goals he set for his products (extend the battery life! EXTEND THE GOD DAMNED BATTERY LIFE!!!!!) he didn’t care how those goals were achieved. Despite being able to code, his gift was in marketing and design and from the very start of his career he left the engineering to other more capable people, like Steve Wozniak.

2. Take on the tasks dictated by your comparative advantage (Jeffery Bussgang)

This is subtly different advice from point 1. There’s a chance you already know what you suck at, in which case you may follow point 1. and stop reading now. However, just in case you’re one of the tiny number of people who are demonstrably great at everything, or a member of the far larger group of people who believe they’re great at everything, read on. Say you’re better than everyone in your company at identifying new product features, UX design, marketing and sales. First, I would say someone’s done a pretty crappy job at hiring. Second, I would say IT DOESN’T MATTER. It only matters where your relative strength lies. If you’re great at everything, but really really great at sales, you should devote as much of your time to this as possible, off-loading those tasks where you don’t have a comparative advantage to someone else. In a world of finite resources (in this case your time), you maximize your productivity by focusing your efforts on those areas where you’re, you know, most productive.

A few days ago we had a great class with a successful entrepreneur and class guest who readily admits to falling victim to some aspects of control-freakery (though let’s call him a Hero CEO out of respect). In 2010, with a decent sales model and a customer lifetime value easily in excess of 3x the cost of customer acquisition, he was reticent about accepting an unsolicited offer of additional funding from one of their investors to ramp up their sales force. The reason? He felt uncomfortable with the loss of control which inevitably comes as you grow your organization (in his case, to a VP of Sales). He did end up taking the funding, and the company has grown successfully a result, but the fact that decision was delayed and an opportunity could have been missed provides a salutary lesson to anyone who catches themselves trying to dip their fingers too deep into too many pies.

Easier said than done, but maybe next time I’m driving I’ll let someone else chose the radio station.

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Does “Passion” Always Make for Good Entrepreneurship?

by Om L. Lala

In a recent HBS class, a firm called “KNP,” specializing in “speaker training and executive communication,” shared their advice on presentation skills. After seeing thousands of VC pitches and interviewing hundreds of VC principals, KNP noted that despite the quantitative nature of the evaluation process, the characteristic that often ends up making the difference between getting funded and not is “passion.” Similarly, entrepreneurs often describe how their “passion” for an idea is what motivates them. But in the journey of most startups, passion can be both an asset and a liability.

Hypothesis-driven entrepreneurship is the best approach a startup can employ to make sure their business model is viable. But this process is an inherently unbiased analysis that should not be influenced by an entrepreneur’s personal attachment to his idea. As such, there can be an inherent conflict between the dispassion required for hypothesis-testing and the entrepreneur’s passion for his idea. As a startup evolves, hypothesis-testing may reveal that a) a business model is simply not viable or b) it requires a dramatic pivot that would fundamentally change the product being offered. Rationally, the entrepreneur should have an interest in determining if either of these scenarios is true for his startup. However, if an entrepreneur is so attached to his business continuing or to his original product vision, he can be blinded by his own passion. He might either not initiate necessary hypothesis testing or ignore its conclusions.

This phenomenon seems to have been at work in the case of Steve Carpenter and Cake. Steve started his business because he was passionate about “applications of social networking for adult consumers” and wanted to relate it to things he cared about. Very late in the evolution of his startup, well after A-2 financing, Steve was forced to realize that social networking did not have a place in a viable Cake business model. In his words, “It turned out that active investors wanted ideas, but they didn’t necessarily want to share them because they viewed the stock market as a zero-sum game.” Why was such a fundamental and important realization made so late? Clearly, Steve was extremely intelligent. But perhaps his original passion for and attachment to the idea of creating a social-networking-based business prevented him from rationally investigating and testing his business model earlier. While some products need to be launched before they can truly be tested, a basic factor like willingness to share investment strategies could have easily been examined through a variety of survey methods.

Reflecting on my own experience, whenever I dismiss an idea I have or decide against a startup position, my most frequent reasoning is “I’m not passionate enough about this product.” But it may be much more sensible to first ask myself whether I am passionate enough about hypothesis-driven entrepreneurship itself, because it is the insistence on conducting rigorous tests and fully accepting their results that is the biggest determinant of success. It is far too easy to let attachment to an original vision inadvertently undermine one’s prospects for success.

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Identifying the “Right” Startup for You

by Jeff Buening

I’ve spent the better part of 2 years now at HBS developing a sense for what it takes to succeed as an entrepreneur. Whether through attending speaker series, joining tech/start-up clubs, pursuing start-up ideas of my own, or extensive coursework I’ve taken (The Entrepreneurial Manager, Social Entrepreneurship in the Biz Sector, Entrepreneurship and Global Capitalism, Entrepreneurial Finance, Launching Tech Ventures, Digital Marketing Strategy, etc.), I’ve covered countless data points and case studies on startups that have both succeeded and failed. And I’ve been fortunate enough to listen firsthand in class to many of these entrepreneurs discuss and diagnose the reasons for their successes and failures.

One topic that consistently pops up unprompted is how and why the entrepreneur decided to start her particular business and, in some cases, leave that startup to pursue the next one – effectively, it’s the decision criteria an entrepreneur applies to start (and stay in) a particular business. Many times, these criteria come in the form of industry focus, nature of the target customer, product-market fit, ability to cheaply test and iterate the product, etc. The nature of these criteria typically varies across a wide spectrum of factors, ranging from personal interests to more tried-and-true pragmatic business needs. In every case, the discussion leaves me pondering the appropriate decision criteria I should apply to my own startup ideas. In essence, what are the critical components that a start-up must meet in order for me to pursue it?

I’ve been actively brainstorming and pressure testing numerous startup ideas of my own since coming to business school. Needless to say, I’ve spent countless hours banging my head against the wall trying to come up with the perfect idea. That process in itself has been somewhat rewarding in that it’s helped me better identify problems and needs in the marketplace that could benefit from business; but it’s also forced me to think about my criteria in a more formal and organized way. I’ve effectively developed a handful of criteria in my head over the past two years, and I’ve been fortunate enough to come up with two separate startup ideas that I’ve been able to pursue, but I’ve yet to notate my criteria down on paper… So why not use this blog as that avenue?

Listed below are some of the specific criteria I currently maintain for evaluating whether to pursue a startup idea… I separate the factors between ‘must-have (MH)’ and ‘nice-to-have (NH)’, as well as classifying them by type of type of factor. I encourage all readers of this blog to comment with additions, challenges, edits, etc.

Personal/General:

• The business is not exploitative or slimy in its customer value proposition (MH)
• The business ultimately serves a broader social need that makes a very positive impact on some sector of the world (NH)
• The company enables me to get my hands dirty doing, building, and managing a lot of different things across the business/ops/mgt functions (NH initially – MH long-term potential)
• It creates something disruptive/innovative/Not yet done – as opposed to incrementally improve an already existing product (MH)
• It solves a complex, difficult (and potentially messy) problem in the world that requires a lot of time & sweat equity and creates barriers to entry (NH)

Market

• Huge potential customer base (MH)
• Huge $ market $10B+ - (NH)
• Limited competition (NH)

Business Model

• For-profit (MH)
• Can scale through existing distribution channels on the web, etc – Not dependent on strategic partner (NH)
• Viral component (NH)
• Easy to test cheaply, early, and often (MH)
• Recurring revenue model (NH)
• Negative Working Capital model (NH)
• Low upfront capital requirements (NH)
• Limited ‘network’ dependence (NH)
• Cash-flow generation from the outset (NH)

Stage/Team/People:

• Funding - Seed or Series A (NH)
• Revenue – from 0-$10M (NH)
• Between 5-50 employees (NH)
• Talented, & social people with strong experience, connections, and intentions (MH)

Industry:

• Consumer web/tech company that does the following:
• Solves an annoying problem, makes life easier, and/or makes something valuable more affordable, accessible, and achievable (MH)
• Solves a problem/need that I personally have as a consumer (NH)
• Relates to a field/service/product that I am naturally passionate about (NH)
• Pure play web/tech service or Web/tech-enabled service (MH)
• Potential sub-categories:
• Digital Media, Travel, Health, Sports/Athletics, Education, Food/Dining, Local Deals, etc. (NH)

Location:

• Fairly flexible but aiming for one of the below locations - in no particular order (NH):
• SF/Bay Area, LA, Chicago, NYC, Somewhere abroad

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Screw being scalable

by Jake Cusack



I do economic development and occasionally investment work in a number of frontier markets and conflict zones: Afghanistan, Iraq, the West Bank, North Africa, et cetera. I enjoy this work. But, as I have oft said to others, I am exploring a variety of tech-enabled solutions and platform to bring scale to it. After all – my deluded subconscious might think -- if I can only make as much money as hours I work, how will I afford the private jet that could allow me to spend time 5% more efficiently? Where will I get that crucial "leverage" so I can continue to make money without actually doing anything?


Wait, here are some good things in life that you cannot scale: Giving personal advice to a friend. Playing with kids. A great bartender at a local bar. A sustainable artisan NGO in Afghanistan, that only survives because of the intimate approval of the local community. A genius, tailored piece of enterprise software. Doing an inconvenient favor. A ski run in fresh powder. Teaching through the socratic method. Making something with your hands. Your time. Your life. 


Four years ago I left the military because I thought private sector development in conflict zones was the missing piece of our national security. Now I get paid quite well to fly around the world to interesting places and work on exactly this. If you told me this is where I'd be when I first showed up at Harvard I would have been pretty pleased. But now, I'm always scheming on the ways to go bigger. I think -- if only I could come up with an idea that would require at least $2M of seed funding before I could even test it! Business school truly is transformational.

I love the massive egoism present in the thought that the truly bright among us must be involved in something scalable -- because after all there is only one of me, and how will the world cope if I'm only dispensing my time and influence on a few small projects and on my close friends.

I do not think there is deep validation from the size of a funding round or number of subscribers. The search for scale means constant comparison, condemnation to inadequateness, against other people’s big numbers. Conversion metrics do not provide proof of soul: evil things can go the most viral of all.

The digital age brings efficiency and easy reach. But an idea that refuses to scale is not necessarily a waste of time – and just because you can go global, does not mean you should.

Postscript: I initially titled this post with stronger words. But I'm a bit worried it will come back to haunt me when I launch my scalable software-as-service frontier market investment analytics platform in three months.

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More Advice from Class of 1999 MBA Entrepreneurs

by Tom Eisenmann

I recently wrote some former students from the HBS MBA classes of 1999 and 2000, asking what advice they'd give to current students considering an entrepreneurial path. In a prior post, I shared their responses to the question, "Do you have any regrets about founding a firm upon graduation?" Below, I present their advice to current students.

In 2000, Rod Harl co-founded GiftwareExchange, an online B2B marketplace that connected gift stores with product suppliers. The business never gained traction, and after several career twists and turns, Rod is now President of Alene Candles, a business he and a partner purchased in 2008 that manufactures custom candles. Rod shared this advice:

Ample low-cost funding can compensate for founders’ weaknesses. In such periods I might endorse aggressively pursuing new businesses regardless of your experience or the quality of your idea. Playing musical chairs, you can make a lot of money. But outside those periods, entrepreneurship is about creating value for your customers before yourself.

HBS doesn't teach about handling failures, which represent a very large proportion of outcomes. Be aware of the personal risks associated with starting a business. Many of my classmates attached themselves so strongly to their startups that it cost them their life savings, marriages, or years of their professional lives. This should not dissuade a true entrepreneur, but it is rarely discussed. 

When Guy Miasnik co-founded AtHoc in 1999, the company provided a browser toolbar that presented alerts and updates from online content companies — akin to today's RSS. After some early pivots, AtHoc identified an attractive opportunity in emergency mass notification systems. Guy, still AtHoc's CEO, shared this advice about founding a firm:

The decision is not so much a matter of timing or financial upside. It is about the passion to create something new, to shape the world in ways you believe it should be, and to lead those around you — co-founders, investors, employees, customers, business partners, and media — to accept and adopt your vision. It is about incredibly positive thinking despite many rational negatives. It is about willingness to work extremely hard; to be relentless and persistent while still being flexible as you listen and learn.

As you go down the entrepreneurial path, you should build skills in two areas. The first is sales. Getting a customer to buy your product means you’ve learned how to gain trust, convey value, and extract commitment. The second is product management. 

As you embark on this path, don’t forget your family. Your partner’s buy-in to an entrepreneurial life style is crucial, and your family will help you keep things in perspective in good times and bad.

In 1999, Joel Silver launched SalesDriver.com, which provided incentive programs for sales reps. After Joel sold SalesDriver in 2001 to a larger marketing services firm, he served as President of Indigo Books & Music, a leading Canadian retail chain founded by other entrepreneurs in 1996. Joel offered this advice to current students:

Entrepreneurship is life changing. It is exhausting. Every decision is yours. There is no "down" time. It takes smarts and tenacity. It will test every relationship you have.

Be conservative and raise more money than you think you need. 

Know your customer cold. Customer insight — not being first with technology — will carry you to success. 

You will meet a lot of smart people who will give you advice. Take it. But don't assume anybody, despite their pedigree, knows your business better than you do. 

You will attract people who want to be part of a great team and work really hard. That is the best currency you have.

Dispense money from an eye dropper. Find the ugliest, cheapest space. Go to Goodwill for furniture. Use chipped coffee cups. You will gain investors’ respect. 

Just ship! Your first product needs to do one thing well, but it can suck in other ways. Version 2 will be good. Version 3 needs to be great

In 1999, Nikitas Koutoupes, co-founded eBricks.com, an online B2B marketplace for construction supplies which was absorbed through a series of mergers into Sword CTSpace. Nikitas, now a Managing Director at Insight Venture Partners, shared this advice: "Ambition and humility are not mutually exclusive. You don’t know what you don’t know, so hire well."

In 1999, Sasha Novakovich co-founded GetConnected.com, which provided advice for consumers shopping for voice, internet access, and video services. GetConnected successfully morphed its business model from a destination site into a private label service for brick-and-mortar giants like BestBuy, then sold its technology to a rival after eight years in operation. Sasha, now planning her next move, said, "Make sure that you have the best possible founding team: people with relevant, non-overlapping skills and experiences, who you trust and respect. Make sure there is a clear reporting structure and division of responsibility. A great team can take an okay idea and turn it into something phenomenal. A weak team can kill a phenomenal opportunity."

Returning to Argentina after graduation in 1999, Alex Abad co-founded Certant, which provided website development services. The firm failed in the recession that followed, and Alex is now the founder of Advanced Organic Materials. He said, "Entrepreneurship is a long and sometimes painful process. To succeed you need to have a passion. This has been the difference between my two startups. The second company I started is a chemical manufacturing company. I am a Chemical Engineer. Now, I enjoy everything I do."

In 2000, Richard de Silva co-founded Siteburst, which hosted and distributed online video for content companies. The service failed after online video emerged more slowly than expected, and Richard is now a partner at Highland Capital. He offered the following advice to aspiring MBA entrepreneurs:  "It’s important to be honest with yourself. If you feel compelled to start a business because it seems fashionable or you have seen others having fun, you should join a young company or a fast-growing bigger company and develop functional expertise — until you feel compelled by a market need."

One former student, who asked to remain anonymous, launched a failed consumer Internet venture that was truly ten years ahead of its time: a successful variant of his idea exists today. He offered this advice to current MBAs debating whether to launch a firm upon graduation:

Recruiters like to see big names on your resume: Google, Facebook, Amazon, eBay. Getting a job at these companies is a lot easier while you are at HBS than it will be after you graduate. Today these companies are courting you. A year from now you may be explaining what you ‘learned’ from your failed startup experience. 

Back in the web 1.0 era, the goal was to raise a huge first round and spend it quickly, acquiring users via large portal deals and banner ads. In the web 2.0 era, product is marketing. Now, with low technology costs, the goal is to do a lean start-up and get breakout user traction before raising serious VC money. After all, great products sell themselves, right? Just look at foursquare and Twitter. It’s easy!

In fact, one could argue that it is harder today than it was back in 1999. Back then, you had a fighting chance to get to scale using your VC war chest. Today, you’re expected to have product pixie dust that magically spawns a million users through spontaneous virality based on your insanely great product. 

So what would I do if I were graduating this year? Taking these two points together, I would take a job at Facebook, and do my start-up on the side. At Facebook — or Twitter or Zynga or a similar company — you will learn about product management, and you will meet the developers and UX people you’ll need to know if your start-up takes off. You can build your business at night and on the weekends, and see if it gets traction. And if it doesn’t take off, so what? You work at Facebook. You’re a stud. When you are ready to move on, recruiters will be calling you, and magically you’re on the HR buy side again!

To be clear, I’m not saying don’t start your business. Life is short. I’m just saying you should think about doing it in this less risky way.

Finally, Craig Carroll co-founded eGrad, which provided on online channel for established brands to market goods and services to college graduates. After morphing eGrad's model and selling the company to a larger student marketing firm, Craig is now founder and CEO of Rezolve Group, which provides services that help families secure financial aid for college. Craig shared this advice:

As a founder, you don’t have much control over exit timing. You take on responsibilities to investors, employees, and clients. If things aren’t going well or you aren’t enjoying it, you just can’t just extricate yourself. Understand the ramifications for your personal and family life. 

There are real benefits to being entrepreneurial when you are young. It is easier to deal with the stresses while you still have energy and no children. Sure, you may be less experienced, but energy, optimism and a touch of naivety can more than make up for that.

There is no formal career path. You truly make your own destiny, but I have seen many friends struggle with the transition from a failed venture and the uncertainty of “What do I do next?” 

The best entrepreneurs have an indomitable spirit and are resilient in the face of adversity. Every new venture really is a rollercoaster of successes and setbacks that test your emotional fortitude. Aspiring entrepreneurs need to ask themselves if their personality and mental strength is really suited to this.

The HBS definition of entrepreneurship as “the pursuit of opportunities beyond resources currently controlled” is more than just a platitude. For me, it sums up perfectly what I do day-to-day. You need to be inventive, creative, opportunistic, persuasive because you rarely have enough resources. Embracing this definition helps me in my role. 

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What Type of Lean Entrepreneur are You?

by Rick Hansen

This post is influenced by some news of the past week as well as a few of the case studies of LTV.  LTV teaches important concepts and principles for implementation, but perhaps lost in all the cases is the amazing variety of personalities whom we’ve covered.  Having worked with a few types of entrepreneurs in the tech space in the past (and having my attention piqued by events of the past week, when the start-up I was supposed to write an HBS case for was abruptly acquired), I think it is also appropriate to spend some time figuring out the different types of start-ups that fit our career vision. 

The Sell-out

I know, the name sounds bad.  But the negative connotation isn’t really fair.  In the end, start-ups hope to create value through new and innovative ideas.  At some point, there are economies of scale to be had which are usually best exploited by larger, more established firms. 

As an MBA, you better know whether you are working for the Sell-out, because as the company becomes more successful your job may change overnight, or may be eliminated entirely.  This week I had this happen to my field study when the company I was profiling was unexpectedly acquired.  (Silver lining: using LTV principles in practice to pivot my field study.)  Sell-outs are often myopic on technology or IP development, rather than on customer needs or PMF.  Often there isn’t even a product released at all, or at least only something to showcase the technological capabilities.  In other words, unless you are one of the patent holders, beware the start-up that isn’t worried about PMF or working toward figuring out how to make a product people or companies want and marketing it. 

The Believer

I was struck by the foursquare case.  I really was.  And not just because my wife (an RC) is mayor of HBS, Aldrich, and Spangler Hall.  I was amazed at how dedicated founders are to the idea (at least according to the case), even more so than the company.  As an investor, I would have found this statement in the case from Crowley crazy:

And if we can’t monetize, at least we pushed the world forward a little…  That’s my aspiration, to change the world.  If this turns out to be an amazingly big, profitable business at the same time, well, that’s an added bonus.

But that statement would not sound crazy to the Believer.  The believer is an entrepreneur who follows through on an idea with tunnel-like vision and enthusiasm.  The believer can be their own best and worst enemy.  They are dogged and unwavering in their conviction.  This can often lead a start-up through hard times when funding is scarce.  It can help in persevering the chasm, the most difficult time in bringing the product to market.  However, this type of entrepreneur often finds iteration more difficult (and pivoting almost impossible) because they are so convinced that their product is great, and that people should buy the product while not focusing if they will buy the product.  Believers can be great to work with, but long-term carrier viability is a concern.

The Serial Entrepreneur

The Serial Entrepreneur is a special and rare breed; one that many MBAs aspire to become.  Here’s why being a serial entrepreneur is cool: it means you didn’t just catch lightening in a bottle one lucky time.  It means that you can create new ideas over and over.  It means you have some clairvoyance into how technology and markets evolve.  It means you are Steve Jobs. 

For those students who took Entrepreneurial Finance in their second year at Harvard Business School, you probably remember hearing the name Jeff Parker quite a bit.  I was in Joe Lassiter’s class, and we had the pleasant experience to have Jeff speak in class.  He was very candid about knowing where he fit in the enterprise creation cycle: he created news ideas to pass off.  He was not in the business to manage and nurture and medium to large business.  He got too bored.  His attention span was too short.  He always wanted to be on the next exciting adventure. 

I actually think this is the sweet spot for an MBA.  Serial entrepreneurs will have a lot of projects because as soon as one sells or fails [fast], they are off to the next venture.  There will be a lot of career iteration and chances to learn a variety of entrepreneurial skills. 

The Dabbler

This is the weekend warrior; the business plan competition participant; the person who doesn’t miss a Hack Day challenge, sometimes traveling to different cities.  This probably covers 90% of business school students in some form.  Low risk because you can work on the project in spare time, but also low value or low likelihood of success because there is a noticeable lack of full dedication.  Remember, lean start-up doesn’t mean cheap start-up.

If there are any other types of entrepreneurs, I’d love to hear some additions.  I think figuring out where you fit in is a key to finding what type of company you want to land in post-MBA.  It will also determine what types of companies you will found in the future. 

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Rich vs. King in the Lean Startup

by Albert Chung

In the HBS MBA elective Founders’ Dilemmas we often talk about the rich vs. king tradeoff where founders often start out wanting to be “Rich and Regal” but quickly find themselves having to make choices that require a tradeoff between getting rich and maintaining control (see Prof. Noam Wasserman’s blog post about the Rich vs. King tradeoff).

Personally, I have a difficult time with the tradeoff as giving up control does not necessarily ensure getting rich, whereas retaining control does guarantee that you will be King and the only variable is how large (or small) your kingdom will be. Perhaps this is why Mark Pincus advises entrepreneurs: “All that matters is that you have control of the company. Don’t give up control.  If you’re going to give up control, go home.” In fact, when I look at the startups that have truly made a large impact on our generation, almost all are situations where the founding CEO remained “King” well beyond finding product market fit. Below are some notable examples:

• Jeff Bezos at Amazon.com
• Larry Ellison at Oracle
• Mark Zuckerberg at Facebook
• Mark Pincus at Zynga
• Michael Dell at Dell
• Marc Benioff at Salesforce.com
• Andrew Mason at Groupon
• Jeremy Stoppelman at Yelp
• Dennis Crowley at Foursquare
• Jack Dorsey and Evan Williams at Twitter (although co-founder issues ultimately led to Jack Dorsey’s departure)
• Bill Gates at Microsoft (eventually hired Steve Ballmer)
• Larry Page and Sergey Brin at Google (eventually hired Eric Schmidt)
• Jerry Yang and David Filo at Yahoo! (yes, they were successful at one point)

Now, I also understand that it’s dangerous to look at exceptions rather than the rule for decision making frameworks since most of us are likely the rule. Despite this fact, however, if we want to have a shot at really impacting the world, we need to study the companies that have done so and how they did it. Other than eBay (hiring Meg Whitman) and to some extent Google and Microsoft (which actually both achieved PMF well before bringing in their respective CEOs), there aren’t many cases of wildly successful startups bringing on professional CEOs.

So, for those of us who do want to be king, we should begin by examining lean startup principles as they provide the perfect framework to ultimately retain control. Reducing waste, getting feedback from users, iterating quickly and searching for product market fit early on all lead entrepreneurs down the path of limiting fund raising (and thus dilution) until they achieve PMF and need to step on the accelerator.

I would also argue that in a lean startup, a founding CEO who has been able to achieve PMF is the right person to lead the company post PMF. We can all agree that pre PMF, the founding CEO is obviously the correct person for the job given the level of innovation, product familiarity and employee loyalty necessary to iterate quickly and pivot if necessary. However, I would also argue that innovation is of paramount importance post PMF and is a skill that I believe most professional CEOs do not have. Startups nowadays (particularly technology-based ones) are facing extremely low barriers to entry and increased competition and there are very few businesses where a CEO’s only job is to create organizational structure and processes.

Once you give up control, you can never get it back, so you’re aiming to be Rich and King, it is important to retain control and you can do so by following lean startup principles.

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