“Here we go again, I thought”, as I listened to the board member tell me how frustrated he was with the founder of one of their venture firm’s most promising investments. Sadly, I knew the call was likely too late to prevent an inevitable cascade of emotional and financial consequences.
Working as an executive coach in Silicon Valley with venture capital firms and the companies where they have placed their investments means being at the confluence of high-stakes financial and career risk. When brilliant, creative, and ambitious individuals are successful, new products and services are launched into the world, rewarding all involved. However, there are more ways for things to go wrong than right, a…
“Here we go again, I thought”, as I listened to the board member tell me how frustrated he was with the founder of one of their venture firm’s most promising investments. Sadly, I knew the call was likely too late to prevent an inevitable cascade of emotional and financial consequences.
Working as an executive coach in Silicon Valley with venture capital firms and the companies where they have placed their investments means being at the confluence of high-stakes financial and career risk. When brilliant, creative, and ambitious individuals are successful, new products and services are launched into the world, rewarding all involved. However, there are more ways for things to go wrong than right, and one of the most painful comes down to entrepreneurial psychology when the founder’s identity is misaligned with the needs of the company.
How Identity Shapes What Founders See and Do
As an individual contributor in a company, a manager/leader of others, or as a start-up founder, you’re obliged to understand the requirements of your role and ensure that how you see yourself, your identity, meets the demands of that role. Our identity acts as a filter to prioritize what we pay attention to and what we ignore; what is critically important and what is of little interest. Our identities evolve as our life evolves. When we become a parent, that new identity changes our priorities and what we pay attention to. If we don’t change our identity as life evolves, then we can’t fulfill the requirements of new roles.
Start-up entrepreneurs possess traits of confidence, perseverance, passion, comfort with risk, and a bias for action. They have a creative intellect and are motivated by achievement and making a difference in the world. Their identity as an *innovator *reflects these personality characteristics. If you ask them to complete the sentence, “I am ________. They will fill in the blank with visionary, inventor, creative, etc.
Being an innovator is aligned with the role requirements to start an entrepreneurial company. Anyone who engages in intense, sustained effort trying to find solutions to difficult challenges, who pushes beyond conventional wisdom, and who doesn’t back down or give up, will write their narrative story with themselves as the visionary protagonist.
The Critical Shift from Innovator to Business Builder
When a start-up founder is successful, and their new product fulfills a market need, their company moves from the creative, innovative stage to becoming a real company. It needs functions like finance, manufacturing, supply chain, HR, legal, and a myriad of other divisions. The founder/CEO’s role begins to evolve. They are no longer primarily the *innovator *of a new product; they are now becoming the builder of a company.
That need for role evolution was the reason behind the frustrated call from the venture investor. “We need a Chief Revenue Officer, and the CEO has been slow to fill that critical role. He keeps telling us that his attention must be focused on further product refinements. We can’t get through to him that it’s time to lean into building a sales pipeline and other functions. I’m afraid it’s time we replaced him with a real CEO.”
As a CEO, you have complete freedom in how you spend your time. I’ve found that few CEOs are clear about what their highest and best use is — what only they can do in their role. If you see yourself as an innovator and think that innovation is your job, then that’s how you spend your time. But if you are the CEO of a rapidly growing enterprise, is that what the company needs you to do? The VC investor on the other end of my phone call clearly didn’t think so. He was telling me the company needed revenue, and that the CEO’s role was to hire talented senior leaders in sales and other functions. He was saying the company’s current success meant that it was time for the CEO to build out the functions necessary for an operating company.
Why Changing Your Founder Identity Feels So Emotionally Difficult
When building a company from scratch, no start-up founder is fully prepared for the emotional journey ahead, especially when their foundational identity begins to hold the company back. It is particularly destabilizing and confusing to have successfully created an innovative product that the market desires and then have your board tell you to shift your focus from your product to hiring sales, product, and supply chain leaders – areas you know nothing about. Sticking with what you know, where your passion leads you, where you’ve been successful, and who you are (your identity) seems unquestionably correct to you.
However, wouldn’t it be better for investor board members to advise first-time founders in advance that their CEO role will change when their product becomes successful? That they will need to evolve from innovator to business builder and eventually to leader? Engaging in conversations about what is expected of the CEO at different stages of the company’s growth cycle would allow the founder time to consider the personal changes that the entrepreneurial journey entails. Can they feel a passion for building a company? Can they accept that they will no longer be fully invested in being an innovator? Will they be gratified being a leader of others who are achieving? Can they embrace a new identity and let go of the old one? Having this discussion up front would lessen the conflict that embroils all too many founders and their boards.
Career Essential Reads
When founders struggle as their company grows, it is rarely an issue of intelligence, talent, or work ethic. More often, it is a misalignment between how they see themselves and what their role now requires. Without the self-awareness to recognize when the identity that fueled their early success has become what’s holding them back, founders risk experiencing a psychological crisis at the same moment their companies are thriving. Developing the ability to reflect, question, and intentionally evolve their identity can allow founders to realign themselves with the needs of their company before success brings personal failure.