The Case for Hiring a Re-Founder Before You Pull the Plug on Your Startup
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Oftentimes, startup entrepreneurs are simply too close to their businesses to get a clear, non-biased look at what may be holding it back from ultimate success. Maybe they lack the required skills or business experience required to identify or correct problems inside their product, process or team.
More often that not, as a new entrepreneur “you just don’t know, what you don’t know.” When the problems become material enough to potentially put the company out of business, maybe it is time to hire what I call a RE-founder to help put it back on the right course.
What is a re-founder?
Founders and co-founders are the people who formed the business in the very beginning of the company. It was often their business idea that they birthed from a piece of paper, into an up-and-running product and business. Think what Mark Zuckerberg is to Facebook or Jeff Bezos is to Amazon or Bill Gates is to Microsoft.
But, nine times out of ten, a startup is not successful in achieving mass customer adoption of their product or service, which then requires some important decisions. Is the problem so bad they need to close up shop? Or, do they need to reset their sights from building a big venture-backed company to just building a small lifestyle business?
Potentially, they need a new strategy and leadership to pivot the company to a direction with better odds of scalable success. They may need to hire a RE-founder of the company.
The re-founder will be responsible for doing a critically-needed, unbiased strategic planning process to thoroughly understand the company’s core strengths, weaknesses, opportunities and threats. They will produce a long-term vision and action plan for the company to, hopefully, pivot the business to new success.
Related: You Can't Lead Your Business Forever
Where to find a re-founder.
Finding a re-founder is quite similar to the Where to Find a Co-Founder process I wrote in the past. The only differences this time around: (1) you are looking for more of a turnaround expert to help you solve your known pain points; and (2) you are looking to reinvent an existing business, including any or all of the people, product or process.
Instead of starting with a blank page, you have to rework what you have. Think of it like building a foundation and framing for a new 4,000 square foot two-story single family home, then realizing you need to re-architect it to a 4,000 square foot four-family apartment building. You need someone that is good with implementing change within the organization.
How to work with a re-founder.
Taking on a re-founder will require a material shift in the way you, the founder, have been operating to date. Be prepared to get in the “back seat” and go along for the ride.
Don’t weigh down the newcomer with legacy thinking or sacred cows. Let them do the job you are engaging them to do, to fix the business. This is a hard, but necessary, process for most entrepreneurs. You enjoy controling every aspect of your business, but be honest with yourself about why the business is struggling. You will most likely have a better outcome (and more equity value) if you simply get out of the way of the new expert who you chose.
If your startup is going to fail, better that it fail fast so you don’t waste a lot of unnecessary capital. Once you have hit that fail point, you have a second option to consider. Instead of simply shuttering the doors, maybe it is as simple as handing the keys to a proven executive. Take a crack at fixing your business before you close it down. Never underestimate the power of a fresh set of eyes to see the solution to your woes.
If, after a critical assessment of your business, you think you need a re-founder, find one because by the, time is clearly of the essence.