Todd Sampson

Dad, Sailor, Tech Entrepreneur

Sailing San Francisco Bay on our Columbia 43.
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Tuesday, 12.16.08

Leadership, Management and Acquisitions

I have been a big Seth Godin fan for years.  While I often find that I enjoy his blog and online videos more than his books, his new one Tribes: We Need You to Lead Us really hits it out of the park.  Among the many insights I gleamed from the book — which you can download for free on Audible or for less than a dollar on iTunes — was his in-depth take on leading vs. managing.

I know, I know.  We have all heard it a million times:  “Leadership is figuring out what to do” and “Management is making sure it gets done right”.  But I didn’t see it as clearly, or how it applied to my work at Yahoo!, until hearing Seth’s great take on the subject.  (I highly recommend checking out the book since I would do a great injustice trying to summarize his message here.)

Viewed through this new lens:  Acquiring companies are looking for managers, not leaders, for the startups they acquire.

And this leads to a major problem: Most entrepreneurs aren’t managers.

Entrepreneurs may have some management skills they have picked up over the years, but to become truly successful in a startup they had to really become leaders.  And leaders hate, I mean really hate, being shoved into a pure management role; even one where they occasionally give guidance on their areas of expertise.  Yet this is exactly what large companies want when they acquire a small startup.  (Larger acquisitions are likely to have many *managers* already and are slotted into an acquiring organization at a much higher level — where they have greater autonomy.)

So, what is the solution?  I have to admit I am not entirely sure.  But I am starting to think that most startup people, by which I mean founders, don’t belong in a management role in any capacity inside a large organization — even running the acquired startup that they created.  I know this sounds a bit harsh.  And I am sure that you can keep the people that worked for the founders on the project.  But I think that you need to bring in professional management, especially people that know the internal politics of the organization, to run the acquired entity.  Let the MBAs that really know how to color within the lines do their thing.

So, what’s an acquiring company to do with the founders?  I think the best options are to set the founders free to start their next venture or, perhaps, give them a different role within the company — such as advisor, evangelist, R&D, or startup liaison.

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by Todd Sampson · Tags: Business · Tech Industry

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