The Unicorn Myth: Who Can Really Lead a Start-Up?

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By: Phillip Bogdanovich

Thanks to examples like Uber and Snapchat, we are used to thinking of tech “unicorns” as companies. But the word is also used to describe individuals with the rare, wild ability to lead companies at any stage, from start-up to enterprise. The corporate leader who is universally and repeatedly successful, like Elon Musk or Warren Buffett. While we would all like to hire the next Musk of Buffett to lead our companies, we probably won’t be lucky enough to do so. So what can we look for in a start-up leader?

There is a notion in the start-up community that career executives—especially tenured CXOs with documented success at multiple large corporations—must be qualified to lead a budding start-up. This notion is crazy and misguided. The qualities and experience that make a start-up leader successful are extremely different from those that make an enterprise executive successful. Let’s explore what makes a good start-up leader—which is a new kind of unicorn in its own right.

Start-Up Management: A Skill Like Any Other

Being supremely capable of leading a company from small to medium size does not necessarily require spending single day leading a large corporation. It does require start-up experience (and natural talent, of course). It requires the ability to manage growth with limited staff and to make money without spending any. It requires a willingness to take risks that are often uncomfortable for those accustomed to the resources and established processes of large companies.

I once hired a very talented sales executive from a Fortune 500 organization who had sold over $200 million in product the previous year. On paper it looked like I could not have possibly found a better candidate. I was certain that he would be able to ramp our sales over $10 million per year in the next 12-18 months. I couldn’t have been more wrong. Out of ignorance, I overlooked the fact that he was coming from a company where he had a very large budget and tools at his disposal. I didn’t even have a definitive travel budget for him. After about six months, we parted ways. I learned a hard lesson about hiring.

The First 100 Is Harder Than the First 1000

A friend who runs a very large company once told me it was harder for him to hire his first 50 people than to hire the next 4000. It’s exceedingly difficult to find leaders who are willing to roll with the rigors and uncertainty of early-stage small team management and then grow with a company as it scales and establishes its culture and identity.

If You Can Manage 15-20, You Can Manage 1000 or More

A couple of years ago, several media outlets published articles about large, successful companies—including PepsiCo—hiring former Special Operations warriors to fill director-level positions and above, even if they lacked any relevant experience on paper. These companies weren’t crazy. Special Operations team leaders and team members thrive in high-stress, low-resource environments, and research shows that hiring a leader with the proven ability to succeed in these environments is significantly more effective than attempting to stress-inoculate an enterprise leader to run a start-up. The skills required for managing a team of 15-20 scale easily for managing large teams. The reverse is not true.

The tricky part about start-up leadership is that you have to suspend your assumptions and resist the urge to think that companies at all stages face the same challenges. There are unicorn start-up leaders out there—but you may be more likely to find them on a compound in the Middle East or grinding it out on their 5th bootstrapped startup that shows great promise, growth and culture than a wood-paneled boardroom.


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