Thursday Oct 4, 2012 by Eric Paley - Managing Partner, Founder Collective
One of my favorite founders in Boston is Jason Jacobs of Runkeeper. Every time I see Jason, I mention to him how impressed I am with what I'm hearing about the progress of Runkeeper. Without fail, Jason graciously thanks me for the encouragement and then shares the many challenges they are facing how much work there is to do to achieve his vision.
When I was starting out as a first time venture-backed CEO, I was way more insecure than Jason. I was afraid to talk about the challenges with my team or board, for fear of seeming incompetent or dampening enthusiasm for the company. Instead I harbored the challenges internally and always talked about how well things were going, until someone would point out the inconsistency of how far behind plan we were. In reality, overselling the progress is what made me look incompetent. I really wasn’t effective as a leader until I started focusing with everyone around me on the problems, while using the vision to build enthusiasm for the company.
Now that I have a portfolio of terrific founders, I have consistently seen this as the operating mode of the very best ones and particularly of successful repeat entrepreneurs and great operational CEOs. Ask the typical entrepreneur how things are going and they feign a smile and say “terrific.” Most founders feel the need to constantly convince their investors and everyone in the ecosystem that the company is doing extremely well; that the operational plan is well within hand, and the company is consistently outpacing it’s own aspirations. This is not a characteristic of great entrepreneurs.
My best portfolio founders spend their board meetings telling the investors what is wrong with the business and how they are trying to solve those problems. They don’t feel that they need to oversell the progress, because the ambition of the vision is the reason that they are so passionate and the reason that all of their constituents are committed to the venture. The good news is either in the numbers or it isn’t in the numbers. Hand waiving undermines credibility. By putting the challenges on the table great leaders demonstrate how on top of the issues they are. Most board members hear the bad news and think that at least they have someone excellent who is completely on top of solving the problems.
I have way more confidence in those that spend their time unearthing and focusing on the problems than those who pretend they don’t exist. Sharing the challenging realities doesn’t demonstrate incompetence; instead it demonstrates the exact opposite. Keep everyone energized by the big vision, but don't oversell the progress in achieving it.
Eric Paley is a Managing Partner at Founder Collective. You can find this blog post, as well as additional content on his blog called Anything's Possible. You can also follow Eric (@epaley) on Twitter by clicking here.