By Jerry Haar
I’ve seen it time and time again. A startup or early stage company with a truly innovative technology or service and ample funding begins to take off, ascends rapidly, then levels off, declines and crashes. According to Harvard Business school senior lecturer Shikhar Ghosh, more than 95 percent of venture-backed startups fail. It doesn’t have to be. Among the startup companies I am intimately familiar with, including two award-winning South Florida healthcare firms, the principal reason a number are struggling, declining and destined to fail is poor leadership. The reality is that entrepreneurs make poor leaders, for the most part.
Leadership is more about behavior than it is about specific skills or knowledge, asserts Martin Zwilling, CEO and founder of Startup Professionals Inc. This is especially true for startups and later-stage firms in the technology sector where the founder/leader is in almost all cases a “left-brained” person (more logical, analytical and objective) than a person who is “right-brained” (more intuitive, thoughtful and subjective).
As a consultant, researcher, and investor, I have observed four traits of poor leadership that can derail even the most promising new ventures.
1. A disinterest in managing. The passion to create is the key driver for entrepreneurs. Transforming an idea into a product or service that resonates with consumers is indescribably satisfying. The creative process — think Howard Roark in Fountainhead — must reign supreme. Creators generally have little interest in leading and managing, believing erroneously that “a product will sell itself.”