Tag Archives: GenieBelt

Partnership vs. co-founder lead startups

I spend most of my time being an entrepreneur (GenieBelt) or supporting entrepreneurs (e.g. Treatwell, StarOfService, ChurchDesk). As part of that, there are some troublesome themes I encounter again and again, one of them is how the leadership team changes as the company starts scaling. It’s a complicated process to get right, and also a very sensitive process both at an institutional level as well as on a personal level. One of the topics I think many company builders tend to get wrong is the entitlement of co-founders. I will not get popular in some quarters writing this, but yes; I think in too many cases people with the co-founder badge feels entitled to decision making rights they should not have. Let me explain.

What is a co-founder? It’s a person that founded a company, quit their job (if they had any) and bet most or all their working time plus their reputation on a project being successful.

Everybody that took the decision to risk time and reputation on an idea should get credit for that. Without those brave people, new projects would never get off the ground. However, the profile of those that start something, is often not a good fit for the profiles needed to scale projects through the various phases – and especially not in a leading capacity. Few people have what it takes to be just right for both inception, getting to product-market-fit, initial traction, growth, internationalisation, scaling, building the corporation, etc. It’s almost the same as demanding from a football player, that he had to be able to play equally well on all positions of the field (Alexis Sanchez?). I have previously written on the entreprofessional profile that can scale from zero to big, but they are rare creatures.

One way of mitigating the experience and skill gap many co-founders have, so they can continue in a leading role, is to let people evolve into different roles as the company grows, and to build up the various teams in the company so they combined have what it takes. But even with role changes and support from new people with more relevant experience, then it is in many cases not the right thing for the company to let all co-founders maintain their position at the top of the company. The role change sometimes has to involve seeing a co-founder being lifted out of the exec team.

That process often leads to stigmatization, fights in-between founders that destroys friendships, tense relationships between investors and founders that hurts progress, etc. It’s really one of the top risks when growing successful companies, and unfortunately the origins of many broken friendships. And it is usually unnecessary.

Here’s my advice:

1: Agree as a founding team from the beginning, that you will do, what is the long term right thing for the company

2: Have open and frank discussions without too much ego on an on-going basis, about how each of you evolve in the company

3: Introduce the “Partnership” concept

Bonus info:

Ad 1: You can also decide that maintaining your positions is more important than maximizing succes of the company, but then at least be explicit about that!

Ad 2: It is much better to have small arguments along the way, than sitting on a volcano that suddenly erupts Tambora style. When everybody has climbed high up in the trees, is so difficult to get down again. The on-going alignment talks can be informal “wine & cheese” chats every quarter or in some other format – the key is to find your own personal way of setting up the process, so it facilitates an open, direct and transparent conversation full of respect without the participants being too stuck in their ego.

Ad 3: This one is very important, but it needs a bit more explanation.

My first full time job was with McKinsey. I joined McK back in the mid-90’s since I believed “company building” was about getting into a corporation, become head of a business unit and then do a management buy-out. Suddenly Mosaic and Netscape launched and Yahoo had their eye opening growth and stock listing, so I realized the digital world opened the opportunity to build significant companies from scratch, and have much more influence over your own destiny – and the tech solutions being build could have massive impact. So I left, and have now spend 20 years in the tech sector, but from McKinsey I learned a few thing that I have taken with me on my journey, and one of them is the partnership concept. I am not sure, that the way I interprets a partnerships is how McKinsey does it, but the basic introduction in a business context I had at the Firm.

For me, running companies as a partnership is the only right thing. I am sure you can do it successfully in other ways, but my personal experience professionally, personally and socially is that the partnership model works really well in a startup and scale-up situation.

A partner is a leading person in the company, who view the company as his or her own, no matter whether the person is a founder or not. The partner acts and thinks as if it is his or her company. The first priority of the partner is to the company, the second priority is to the other partners, and there is a high level of trust & transparency within the partnership. Since the partner is sitting at the high table, then a partner will always have input opportunity on major strategic decisions. The CEO is of course the ultimate decision maker, but in a partnership the CEO will try to create broad support for all key decisions in the partnership, and this happen through the partners being close on decisions, values, vision and ambition.

To sum up, the key elements for a partner are:

  1. you are a leading figure in the company
  2. you have a say in all major decisions
  3. you feel and take ownership of the companys health and prosperity
  4. you have a meaningful stake in the company
  5. there is deep trust and respect between you and the other partners

A partner lead company is where the executives act as partners, and work in a very tight, high-trust environment towards a shared goal of making a great company. High on good banter, low on bad politics.

I want to run companies with partners, and I am not worried about whether those people are founders or not. Yes, founders should be respected for their initial decision and risk willingness (and they typically have significant ownership stakes), but that does not mean they should monopolize decision making and the top positions of the company for ever. If you from the beginning agree, that you are leading a partnership and not a co-founder team, then you are much more open to supplementing your team later on with new talent. Very talented and experienced people have many opportunities, and they would often shy away from working in a company that defines it self as being “founder lead”, because you then risk being squeezed between founders that feels entitled to take the final decisions, even though they might not have the best skill set or experience to take decisions.

A “partner lead” company will not keep founders sacred just because they are founders. There will always be some level of veneration for founders, and when moving people around there will probably also often be more flexibility, but optimally a company focused on getting things right in the long run will prioritize having the right people in the right places. Not necessarily easy to evaluate who should rightfully sit where, but too often co-founders are obviously sitting in positions that are not helpful for them, the company or anyone else. Many founders also don’t want to be stuck in an exec position, but would rather be in different roles that suit their temper and personality better.

In my ConTech startup GenieBelt we are partner lead. We have a couple of co-founders that are in key positions in the company, they thrive and do important stuff in their roles, but are not executives. And of the five executives & partners, we are three that were also co-founders and two partners who joined six and 12 months after our formal company creation. But we very rarely talk about who are co-founders, we present our selve as partners, and we talk internally mainly about our partnership – not who were where April 2013. It is not relevant for execution today. The two partners joining post-founding, the product shark Bob and our dear leader Ulrik, would not have joined our Band of Brothers, if they had felt they would be subject to “co-founder’ism”. And without Bob & Ulrik, GenieBelt would not be in the great place we are today.

For those that want neither a partner lead or a co-founder lead company, then there is also the option of having a “board lead” company. But this I can not at all recommend for startups or even scale-ups. A small, smart board that understands it’s role with mutual respect and trust is a great thing for a scale-up, but you still want the strategy and culture to be firmly in the hands of the people actually running the company.

 

Why the Apple iWatch might be targeting your home

I normally doesn’t comment on various tech hype issues on this blog, but I will make an exception with the Apple iWatch because it is related to something I have spend a bit of time on, and where I have a personal interest: the intelligent home (& car) of the future.

There has been a lot of hype re this watch, and commentators/bloggers/journalists has pointed out it has emphasis on social communication and fitness with a bit of payment thrown in, while others has talked about it being a luxury fashion object. Well, I’m sure all of that is right, and those arguments will help to give iWatch an initial momentum the first couple of years, but I also think there is a much bigger category Apple ultimately wants to target in the 5-10 year perspective. Everybody agree, that Apple is not just launching a watch but a device that will be a platform for a future, massive business. Fitness is not a big business in the eyes of Apple, payments is pretty big, but even bigger is the category “everything-I-put-in-my-home”.

I am getting quite a good insight into the world of Construction, professionally through Geniebelt, and privately because I’m doing a bit of work on my farm. Especially the latter has made me look at how we will change the way we live in and interact with our home. For 100 years (or so …) we have gradually been adding all kinds of electric gadgets to our homes, everything from lighting bulps and practical machines (the refrigerator probably being the most important one) to entertaimnent products (TV, radio, etc.) to modern day machines connected to the internet (PC, iPad, etc.).

Now all the craze is about the internet of things, whereby we will connect everything to the internet, so we can get loads of data on our environment, machinery and home in order to live a more convenient life. How awesome, imagine that all the gadgets in your home talked to you, and you could manage them all. Control lighting in all of the house with the touch of a finger, increase ventilation/temperature a bit before getting out of bed, turn off the TV when the kids forgot to when sitting in the next room, open the door when the repair man needs to get in but you are shopping, change the music from 1Direction to Pink Floyd, start the coffee machine while still moving the lawn, turning off the alarm before going downstairs in the morning, etc, etc. – endless use cases.

I am obviously not the first to spot this trend, but the question I have asked my self the last year is, how should I manage all these connected devices and sensors? The first answer would be “your smartphone”. Well, yes – and no! When I’m at work, I sit with my iPhone (just got my new iPhone 6, love it) and it is always within reach, just in case some very important person called me to say very important things. However, when I’m home, then I’m home and don’t want to be a slave of the phone. It might be on another floor than me, and definitely in another room. So, it is not convenient for me to use my phone to manage all my home gadgetry – it’s no better than getting up from the couch and walk to the light switch/try to find the TV remote controller/go to the Spotify speaker/etc.

But, if I had a watch on my arm, that would all be very different. I would in most cases be ok to wear a watch at home, very different than running around constantly with the in-size-ever-increasing smart phones. I think ultimately this is a key use case that Apple is gunning for. The interface needed to manage pretty much any device and sensor can be fitted to an iWatch. Look at the remote control for the Apple TV – isn’t that already perfectly designed to the iWatch?

From Apple’s perspective, the calculation goes like this: we are the most valuable company in the history of mankind, so how can we grow even bigger in a meaningful way? They need to address absolutely huge markets in order to move the needle, so putting together a cunning plan to be the platform for the intelligent home of the future sounds about right. And throw in the ability to also operate your car using an Apple platform plus some payments etc. and they are pretty much only missing energy, weapons and drugs.

This is a very long term vision for Apple, and it does take the power and stamina of a company like Apple to pursue such a vision. It will take a long time and lots of investments before Philips Hue lighting systems, Samsung smart fridges, Danfoss thermostats, Nilan ventilation , big Sony’s full-monty-system or small Form’s smart sensor and a few thousand other companies accept Apple is the gatekeeper to their products and services. But the watch idea is solid, and it makes sense to get started early on, and avoid positioning the watch right now as the interface to your home, because that position would disappoint consumers. The key thing for Apple is to 1) start building a general use case for the iWatch, while 2) working hard on getting a lot of partners onto their platform – something they tend to be pretty good at. Gradually the brand and use case is being build with a position in the upper end of the market at first, apps are being developed by the relevant suppliers and Apple is building momentum as the platform to integrate all the stuff you want to interact – including all the devices in our home, which as an aber-dabei will be much more than people realise today, e.g. the intelligent toilet to check your healt status. And in the beginning it is anyway mainly affluent people who are going to invest in this stuff for the house, so price points at $500 and up makes sense.

I think – and hope – that this is an integral part of the real plan behind Apple’s big push behind a product category, which in it self is tiny compared to phones & computers. This is not about watches, fitness or luxury products, it’s the first major assault from Apple’s side in the future battle to run your house and all its smart devices. This will be fun and interesting to watch. And “no”, I don’t own any Apple shares.

http://firsthomenews.co.uk/wp-content/uploads/2015/02/Things-to-Consider-Creating-a-Good-Living-Room-Interior-Design-Nice-View.jpg

 

GenieBelt – the Genie to help Construction, now with funding

We, the construction genies from GenieBelt, just raised an angel round of $½ Million, yehaa! That’s not a lot of money compared to some bigger funding rounds I have done in the past, but it’s exactly what we need and the feeling is as good as when I did £40 Million rounds. And what will the money be spend on?

screensaver_1920x1200 GenieBeltLovesConstruction

Together with a few other guys I founded a new company about half a year ago. A company which has high ambitions of helping the small- and medium sized businesses in the construction industry to improve the way they handle construction projects. Digital tools has been used in many years in construction, and also among the SME’s, but what we are building will be different than anything else the industry has seen. Here’s a bit of background.

Back in February I met up with my old mate, Peter Bang. Peter and I studied economics together many (many-many, too many-many) years ago and also had a stint abroad as well, where we broadened our horizon in business, British ale beer, and snooker. Peter left Uni and has stayed loyal to the same company ever since, which is a very rare thing these days, but that is probably also because it’s a very successful company, Velux. They make building materials and is especially renowned as a world leader in roof windows, i.e. Peter knows a bit about the construction industry.

We ended up talking about how his recent experience from refurbishing his house had been less than good, and since I was planning to refurbish my farm, we came to the conclusion that someone should build a work-flow management system that could help construction managers to better run small and medium sized projects. Mobile, cloud, super slick UI and all that – done deal, easy peasy, next!

I started doing research in the area, which – despite my fascination with big construction machines and power tools – is not that familiar to me, but then (the usual story) I started meeting a couple of people that had a much more personal angle on the Construction industry, and also supported the idea, i.e. Nikolaj/CTO and Joachim/everything-commercial.But the big event that took this forward was meeting Gari who just happens to have a construction engineering background and was putting together the pieces of his own start-up with two other guys (Francisco & Kacper). Their project was as a starting point more narrow than what I was considering (they still won Venture Cup twice though), but Gari and his team did have a longer term plan. And so it began …

2013-09-05 08.56.50

It’s been half a year now, and our 10-12 man team is now running full speed ahead. We just recently partnered up with a guy who knows more about our space than most: Bob, who is the co-founder and CEO of a company that some years ago tried to do partly what we are doing now, but the technology was not quite ready, and he never had the kind of resources we are deploying now. Bob has taken our UX capabilities to new highs, stellar person.

Some of our team members are in London and Poland, but the main part is sitting in Copenhagen, where I’m spending a couple of days a week at our office, and it’s nice again to be involved at the very early stages of company building. That is always a very humbling experience.

“So again; what exactly is the product”? you might think – we will get back on that. Right now the entire team is chasing our product vision, by doing use case research, UX’ing and developing so we are moving quickly ahead. Some time in by summer 2014 we can show version 1, and we plan to amaze you. Building companies based on new stuff is not easy, but the team, the idea and the market is there.

NB: thanks to the angels which have supported us so far, e.g. Ditlev, Claus, Troels, Mat & Giorgio – we will do our utmost to make you look good!