Founders are a finicky bunch. They tend to rely on their own judgment, and maybe the advice of an insider or two. It’s nearly impossible to penetrate that inner circle and gain their trust. Entrepreneurs mostly seem to listen to their inner voice and just wing it. That’s what they’re taught to do. The question is, is that a good thing?
The common wisdom of the day is that founders should learn to trust their instincts. Unfortunately, that doesn’t work nearly as often as we’d like to believe. When it comes to making tough decisions, those voices in our heads can be wrong as often as right. Your gut certainly doesn’t have a monopoly on wisdom.
Part of the problem is that all we hear are entrepreneurial success stories, and we assume, often incorrectly, that their instincts made all the difference. There’s little doubt that those stories are more the exception than the rule. Besides, it’s all hindsight, which is always 20-20. Here’s one such story that’s been making the rounds lately:
When Kleiner Perkins and Sequoia Capital agreed to fund Google back in 1999, the venture capital firms had one condition: founders Larry Page and Sergey Brin had to bring on an experienced CEO as sort of adult supervision. The pair reluctantly agreed. After all, this was their baby, and they were loath to turn it over to just anyone.
After interviewing dozens of candidates, the Googlers found themselves struggling with the weight of the decision. How could they possibly know who would "get" them? Who would fit the unique culture they were creating? Then they learned that former Novell CEO Eric Schmidt had been to Burning Man. That, of all things, made a difference.
Turns out the desert festival characterized by extreme temperatures, creativity and partying was a big deal with Page and Brin. The three went, they bonded and the deal was sealed. They’ve since had their ups and downs, but what began as two founders and an outsider turned into one of the most successful triumvirates in corporate history.
We can debate the somewhat questionable criteria the founders used to choose the guy who would lead their startup, but not the results. When Schmidt relinquished the company’s reins to Page and became executive chairman a decade later, the search giant was worth more than $200 billion.
And therein lies the rub.
It’s easy to say, after the fact, that the decision to hire Schmidt was inspired. But was it really? What if Page and Brin hadn’t learned that Schmidt had gone to Burning Man. What if they had hired someone else? Would they have trusted anyone else? Would things have turned out different? And how much credit does Schmidt really deserve for Google’s breakout success?
We’ll never know the answers to all those questions, but we do know that Google’s revenue and profit machine is, and has always been, its search advertising platform, AdWords, which preceded Schmidt. Gmail, Maps, Chrome, Android -- everything that followed was predicated on the success of AdWords. Everything. It’s also worth noting that Google’s value has tripled since Page took over six years ago.
While it’s a good thing that Page and Brin were able to put their egos aside and trust an outsider, it’s not at all clear that their instincts played much of a role in the choice or the outcome. On the contrary, they wanted to go it alone, but the VCs forced their hand.
Having worked with dozens of founders of companies big and small, I can tell you that becoming a trusted advisor takes time and tenacity. There’s simply no way to predict how things will turn out. You either fit their mold or you don’t. Entrepreneurs can be very black and white that way. Far too many trust only themselves, to a fault.
I’ve watched many become blinded by their own vision and make short-sighted decisions. Sometimes they’re too close to the situation and succumb to narrow-minded beliefs or limited experience. Other times they become trapped in their own comfort zone and take the path of least resistance. I’ve seen it all.
Don’t get me wrong; I’m not saying it’s easy to know who to trust or under what circumstances. I don’t pretend to have all the answers. There are no paint-by-numbers rules for this sort of thing. If there were, we wouldn’t have nearly as many failed startups as we do.
What I can tell you is this: If you’re reasonably smart, self-aware and have more humility than hubris, you’ll have a decent chance of making the right call at the right time. If not, I would take generic advice like “trust your gut” with a big grain a salt.