8 Ways Founder Decision Making Is Unique
Updated: Feb 28, 2022
Founders, those of us committed to creating a lifetime of value by building organizations greater than ourselves, are our own special class of decision makers with options only available to us.
But, because Founders are a relatively rare bird, the bulk of decision making, management, and leadership literature doesn’t speak to us–and could even lead us astray. By understanding what makes Founder decision making unique, you can avoid falling into the trap of “common knowledge” that doesn’t apply to your unique position.
Here are the 8 reasons Founder decision making is unique:
1. Founders Aren’t Codependent on the Venture
Every role in a venture depends on the existence of the venture itself except one. Without a venture, there isn’t a CEO, no customers, no investors. There are no accelerators, no incubators for a not-a-venture.
But a Founder is a Founder even when not actively building. Because the role of a Founder is life-long, each venture, each relationship, each lesson, each job builds the knowledge, skills, and experience a Founder needs to ultimately create a lifetime of value.
This difference is critical. CEOs, investors, accelerators, and incubators logically place venture survival as their singular priority. “Grind at all costs” is their philosophy…but it’s the Founder who pays.
The Founder alone can adopt a perspective extending beyond the current venture. While we pour our souls into our businesses, Founders can…and should…make decisions with this broader perspective in mind.
2. Most Decisions are New for the Venture and the Founder
If you’re doing something that’s never been done before, the best practice hasn’t been discovered yet. If you’re trying to discover product-market fit for a new product or a new market, there’s no guidebook with the right answer. What you are doing is new, so many of the decisions are too.
In a corporate environment, there are other people who have made similar decisions, maybe even in the same company, to help you. Employees advance in authority as they grow in experience.
Founders are Founders on Day 1.
But, there are few programs where Founders develop their skills over time. There is no Founder guild where Founders systematically rise in responsibility as their skills develop.
Because most decisions are new and venues where Founders can share their experience are few, we often find ourselves isolated and without experience when we need it the most.
3. Professional Decisions are Personal Too
If you are working for a large corporation, the routine decisions you make at work have a limited spill-over into your personal life. Many people bring their work home with them–especially in today’s world, but the decision to close the Omaha office or delay shipping the next version of a product is not a personal one.
For the Founder, however, the venture they are building is more like a member of the family…for better or worse. Decisions about marketing, suppliers, employees, investors, and a million details don’t get left “at the office”. The “office” is wherever we are, and the decisions that have to be made are ours, all the time, everywhere.
4. The Distance from Decide to Do is Only Limited by Resources
In the bureaucracies we love to hate, decisions don’t move quickly. There are processes to follow, stakeholders to persuade, supervisors to convince. Even though I may decide what to do today, the doing of it is still in the distance.
Slowing actions and decisions is a feature of bureaucracies designed to maintain stability and predictability.
Startups, however, are not built for stability or predictability. They are built to change with the agility to seize opportunities.
So, Founders can act quickly. But, this quick action carries risks. A rash decision that would have been buffered in a big corporation becomes policy the moment a Founder speaks it.
5. Many Founder Decisions Carry High-Consequences
The earlier a venture is in its life-cycle, the more decisions there are with long-term consequences. Whether to bootstrap or seek investors is a very early decision that will shape the trajectory of the venture for most of its life. Whether to adopt a B2B or B2C model is another early, high-consequence decision.
In the military briefing room or the corporate boardroom, high-consequence decisions are made after an exhaustive analysis of alternatives, statistics, simulations, and opinions from an army of advisors and consultants. But, Founders often have only themselves, their judgment, their personal experience, and whatever they can learn from other Founders who have walked this road before.
6. Change is an Expectation, not a Threat
Everyone hates change. They hate it more if they have to change.
This can’t be true in a startup. No startup is born fully-formed. Start-ups are built to grow…to adapt…in short, to change.
This is a unique advantage Founders can access. Where most other organizations have strong social inertia built in, startups don’t. There may be plenty of process-friction associated with Founder decisions, but social friction can be much lower. Generally, people working in a startup have an expectation of change. Startups that don’t change die.
7. Founders Get to Define Their Value
Sure, many people start businesses with the idea of big returns. The entrepreneur success stories we most often hear end with yachts, Bored Apes, and Lambos for all our friends.
But, Founders know there are easier, more reliable paths to respectable wealth than startups. In many cases, the money Founders pursue is the scorecard of mastery. The real pursuit is often the satisfaction of succeeding at something most are afraid to even start. Money is just the way society keeps score.
Founders, however, find other goals more important than money alone. The word that comes up for many Founders is impact. We want to leave our positive mark on lives, communities, and our families.
Many of us left “real jobs” because the value those organizations pursued didn’t align well with how we want to spend our lives. Being the best roofing company in the tri-State area is someone’s goal, but it isn’t mine…and it is probably not yours.
Being able to define the value you are pursuing gives you a different set of possible solutions than you would have if you were simply trying to make someone else’s dreams come true.
8. Founders Can Create Constraints to Simplify Decision Making
If you work anywhere…anywhere…and aren’t the Founder, you are the recipient of constraints.
The CEO is constrained by the Board of Directors. Employees are constrained by their supervisors.
You don’t normally get to choose which problems–or how much of a problem you are going to solve.
“You know what Boss? I’m not going to work on that thing you asked me to do. I think we should be working on this instead.”
A few companies may relish this free-wheeling spirit, but most would respond with an additional constraint, probably one impacting your paycheck.
But, Founders are different.
Founders hold the ultimate constraint in a venture they control. They can close the venture and move on to something else. And, sometimes they must.
But, short of ending a venture, the ability to create constraints is a powerful decision tool to wield, and it is available on Day 1.
What are you selling? The answer isn’t “everything”.
Who are you selling to? The answer can’t be “everyone”.
Where are you selling? The answer can’t be “everywhere”.
As a Founder in a new venture, you can’t solve a problem that big. Selling everyone everything everywhere is too complex for you (or anyone) to manage.
So, you make choices. In other words, you impose constraints.
“We will sell this thing, to these people, in this sales channel.”
Ahh…now you have a problem that starts to cast off some complexity and become merely complicated…or even simple.
“We will sell umbrellas, to business women, on the street when it’s raining.”
A super-simple problem with some obvious solutions.
…but maybe not the biggest revenue generator you can imagine.
When Founders use this powerful constraint-imposing tool, they trade complexity for revenue potential. Once you can solve this simple problem, you can start adding complications and complexity back in. You can decide to solve other, bigger, more profitable problems.
No one else in an organization can wield this power. It’s yours. Use it wisely.
The decisions a Founder has to make are simultaneously varied, impactful, frustrating, and invigorating. Simply copying the management techniques that work for established businesses often isn’t the best solution. Being a Founder is its own trade with skills unique to those who practice it. The first step in growing your Founder skills is understanding where conventional wisdom ends and your personal journey begins.
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