Most entrepreneurs want to 'be their own boss' but a wise helping hand can be a big asset.
Great entrepreneurs tend to be terrible employees. We don’t want a job, we want an adventure. A mission. A fundamental purpose. Unsurprisingly, one of the most common reasons for twenty-somethings to launch their own venture is because they want to ‘be their own boss’. So it might come as something of a shock to realise that the first thing you must do when you become your own boss is to immediately recruit one for yourself. If you are serious about growing a business to any real scale, you absolutely need to hire a chairman.
Learn the hard lessons the easy way
I’ve often likened entrepreneurs to jazz musicians. Both are fundamentally creative, curious and rebellious and have every chance of ending up penniless. There is a great quote about jazz: ‘you can’t teach it but you can learn it’. This applies to start-ups in equal measure. Of course, you can teach music in the same way that you can teach somebody to write a business plan. But igniting the improvisation required for jazz or sparking the idea required for a new venture are things that must come from inside. So how do you learn? By being around the right people and being mentored by those who have trodden the path that you are about to follow.
I co-founded ByBox in Silicon Valley in January 2000. We made a lot of mistakes and limped back to the UK. Soon after, we did a friends, family and business angel funding round, which brought us enough money to keep the lights on. And a new chairman – Stephen Bullock – a successful entrepreneur-turned-angel. In the years that followed we covered almost all of the areas that any business hell-bent on growth will experience. Nine acquisitions – ranging from spin-outs of FTSE 100 giants to owner-managed private companies to buying failed businesses from the receiver. We invested heavily both in new ideas and new territories: some worked, others didn’t. But we grew every year and ultimately drove our start-up to a valuation at exit north of £100m.
It isn’t that a chairman can stop you from making mistakes; entrepreneurship is far too difficult for that. The point is that the right chairman will counsel, cajole and critique your decision making and will support you when you need it most. And if you are prepared to park your ego, you will learn the hardest lessons simply by listening to a chairman who has actually done it before.
Chemistry is key
Recruiting a chairman can be tricky. It is easy to feel intimidated by big personalities with glittering CVs and bulging reputations. You must cut through that and answer one simple question: do you actually get on with each other? As with all recruitment, the old adage holds true: if in doubt, don’t. It doesn’t matter how impressive a person’s LinkedIn profile is or how much money they have made in the past. As long as they pass the hygiene factor of having been through the entrepreneurial journey themselves, what matters most is that you can trust them instinctively.
You might think this is wishy-washy nonsense. But if you are truly ambitious for your business then you will push things too hard at times. You must be able to have really difficult and occasionally embarrassing conversations with your chairman. You will feel stupid for getting things wrong. You will curse your bad luck when the market moves against you. You will feel bitter towards rivals who might engage in dubious tactics. You have to be able to vent at – and then listen to – your chairman. That will only happen if you trust each other and actually get on.
Beyond that, your chairman must be able to stand up to you. That might sound obvious, but entrepreneurs are often forceful and charismatic characters who can take some controlling at times. Don’t fool yourself into thinking that your life will be easier if you have a pushover as a boss. You don’t want somebody who will pick a fight for the sake of it. But your chairman must be capable of putting in your place and saving you from yourself.
Don't change your Chairman just for the sake of it
Best practice in large corporates dictates that non-execs should be cycled-out every three years or so. That’s fine for situations where the company is fundamentally stable and fresh thinking might be key to good governance. Start-ups are the polar opposite. They are gloriously unstable, where even the time between board meetings will result in umpteen changes in strategic direction.
So if, like me, you find a chairman who has done it all before, who you trust and like and who will stand up to you when required – then count your lucky stars. Pour your guts into your venture but always give your chairman a good listening to. And one day you might look back with pride at delivering a hefty return to the people who backed you in the first place.
Stuart Miller is the CEO and co-founder of ByBox, and former chairman of the Small Business Charter. He is also a Fellow of the Chartered Association of Business Schools.
This article was written by Stuart Miller and first published by Management Today on 11 August 2016.