Young Upstarts

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Making The Transition from Entrepreneur To Leader

by John Vrionis, partner at Lightspeed Venture Partners

Businessman sitting at table

Lightspeed is in the business of encouraging entrepreneurship. This past summer, the Lightspeed Summer Fellowships program invited selected guests to provide a unique perspective into the world of entrepreneurship. The program provides aspiring entrepreneurs the resources and mentoring they need to build their companies and develop their skills. It is my privilege to work with the next generation’s best and brightest in the early stages of their careers.

Billy Bosworth is the CEO of DataStax; he leads the company’s global strategy and direction, and oversees day-to-day operations. Bosworth’s presentation offered a multi-faceted, in-depth view of what it means to be a leader.

Many of his thoughts are reflected in the following article:

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In the tech world, many new entrepreneurs have never before held leadership positions. They have brilliant ideas, they’ve researched their market, they’ve pulled together teams to turn their ideas into products and bring them to market. Yet many have no real understanding of how to grow, manage and lead a business.

While leadership partly rests on personality, aptitude and drive, it also rests on ways of thinking and of skills that can be learned. For example, entrepreneurs typically pitch multiple VCs before finding a backer. Rejections can be disheartening. According to Bosworth, “DataStax ended up pitching to 39 VCs; 38 said, ‘No thanks,’ but after a while I did not settle for that as an answer. When I pushed deeper, they told me: ‘we’re not quite sure what you’re doing, we don’t know where you fit in the ecosystem, and we don’t know how you’re positioned.’ That was something with which I could work. You will do well if you pursue such negative feedback.”

Such feedback helps entrepreneurs understand what VCs are looking for, determine where they went wrong and improve their presentations accordingly.

Teambuilding

Once funding is secured, entrepreneurs need to build a team, bringing in people with not only the right personalities but also the right skill sets. One mistake fledgling companies make is to ask the wrong person to do a particular job. For example, a hard-core technologist may not be comfortable pitching decks; that’s a job better suited to a more extroverted, charismatic personality. Playing into people’s strength is an important facet of leadership, as is building a team that provides the right feedback. It’s also important, particularly in the early stages, to hire people who can remain committed to the company through the ups and downs that startups experience.

Leadership vs. Authority

To be effective, leaders need to understand the difference between leadership and authority. Authority is a one-way street; you tell people what to do and expect them to do it. You can make people do things, even if they’re not motivated, but you’re not leading them.

Leadership is about communication and motivation, about letting people know why you’re asking them to do things, and it is the number-one problem in small companies. If people understand why you’re doing something, they’ll usually get motivated. And leaders need to be willing to have differences of opinion with employees. “It’s perfectly acceptable to have different opinions,” said Bosworth. “Conflicts are part of a healthy company, but they need to be done with respect and some structure. Otherwise, they devolve into dysfunction.”

Types of Leadership

As your company grows, you’ll need people – mentors, VCs and others – to help you figure out how to lead the people who can help you implement that growth. Here are a few questions you should ask those mentors.

  • What is your leadership style?
  • What is your leadership structure?
  • What are your core leadership principles?
  • How do you implement them?

The answers are important to team building because they will help determine your corporate culture. It may seem that in an industry where the vast majority of employees are individual contributors, not everyone can be a leader. DataStax, however, has created a structure that lets it think about leadership along four axes.

  • Thought leaders demonstrate mastery, create cutting-edge strategic thinking, and advance your domain or even your entire industry. Leaders like this, as well as people who are very self-aware, are important in any organization.
  • Self-leaders are aware of their capabilities and can manage themselves. “People who can’t assess themselves have a hard time in crisis situations and when dealing with other people,” said Bosworth. “If everybody was good at self-leadership, about 95 percent of our problems would go away.”
  • People leaders have organizations under them or an implicit power structure that lets them tell others what to do.
  • Results leaders figure out ways to attain high performance and produce results in even the most difficult situations.

Understanding these leadership types can help you assemble the right team to solve a specific problem. If you have to get a product out the door in two months, for example, you want to make sure the team includes results leaders. If you’re looking to revolutionize a product sector, you need to include thought leaders.

Understanding Authority

Authority poses its own set of issues. “I have a strong personality, and when I once suggested having pizza for lunch, I got pizza for 15 days.” said Bosworth. “I wanted pizza that day; I didn’t say it was the law of the land.” But scenarios like this happen over and over again on technology decisions, people decisions – all kinds of decisions.

This realization led Bosworth to create three levels of authority for employees.

  • Level 1 authority is autonomous and final. Even if someone who was charged with finding a solution comes back with one that Bosworth doesn’t like, he has to swallow it if that person has Level 1 authority for that decision.
  • Level 2 authority is contingent. For example, someone may have the authority to develop a plan, but not to execute it. Bosworth will review the plan and decide if it needs more work, but he is clear that he will ultimately approve it before it gets executed.
  • Level 3 authority is for situations where a person is given the task of simply framing a brainstorming discussion, and that’s it. “I don’t want people wasting their time trying to create a grand strategy for things only to be demoralized when I rip it apart,” said Bosworth.

Goal Setting and Motivation

Setting goals for people can be a huge problem. How to set a goal is not always obvious, not every goal will scale, and sometimes people will hit goals, but badly. Perhaps the person or group tasked with achieving a goal doesn’t have the right skill set, perhaps they aren’t motivated, or perhaps the goal was unrealistic.

As a manager, it is helpful to keep in mind advice from business guru Peter Drucker, who advised managers to spend the majority of your time accentuating people’s positives and very little time trying to fix their weaknesses.

If someone is highly motivated but lacks the necessary skills, you can throttle back, provide training, and reach a point where both skill and motivation are high. If skill is high but motivation low, find out why it’s low. Perhaps the person believes something that isn’t true, for example that they are expected to perform the task outside of work hours, when you really want them to prioritize it during the day. Having conversations about goals helps managers understand if people have the skills and the motivation to reach them, and will make achieving goals easier.

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John Vrionis

John Vrionis (@jvrionis) is a partner at Lightspeed Venture Partners who focuses primarily on early stage enterprise and consumer technology investments. In addition, John is the founder of Lightspeed’s Summer Fellowship Program. John holds an MBA from Stanford University Graduate School of Business, an MS in Computer Science from the University of Chicago and a BA from Harvard University.

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