Founder to CEO: Chief Visionary
How does the Visionary role change as the business begins to scale?
Most startup founders are, at least to some degree, visionary. How does that change when the business begins to scale?
I think the easiest way to understand the transition is to consider what it looks like to be the visionary for the company in three different phases: a) while the business is still a startup searching for a profitable, scalable business model, b) when the business finds that business model and begins to scale, and c) beyond that transition as the business grows and matures.
Startup Visionary
Most startups are founded by people with a vision to create something that doesn’t yet exist in the world. Sometimes that’s as simple as “I think there needs to be a Pan Asian restaurant in this part of town.” Other times, it’s based on a more revolutionary vision of how the world is changing, such as “there needs to be an easy way to help local artists participate in the Web3 revolution.”
That initial vision is a form of hypothesis, and over the course of developing the startup, that hypothesis will be tested and refined. For most startups that achieve scalability, although there will be adjustments made in how to capture the opportunity, the initial vision will continue to be a driving force for the business throughout the the startup phase. The founder is typically passionate about this vision and his visionary role is to push the company towards making that vision a reality.
Transitioning Visionary
As compelling as the startup vision may be, as the business transitions out of startup mode and begins to seriously invest in scaling up to reach the full potential of that vision, the visionary role begins to change.
Most successful startups are intensely focused on a specific solution to a specific problem for a specific market. However, the full potential opportunity available to the scaling business will be much broader. The capabilities and resources that the company is building as they scale could potentially be applied to go after many different types of problems/solutions for many different markets. Without a well-defined vision, this can be disastrous.
Let me give you an example. BayPackets was a client of ours when I was at TeleChoice in the early 2000s. The company had proven the scalability of their business model, raised venture capital funding, and had begun to scale. Ken Epps, BayPackets’ CEO called with good news and a challenge.
The good news was that BayPackets achieved early traction with three of the largest telecom players in the industry as well as several second tier players. The challenge was that, as an early stage company with limited resources, BayPackets could not meet the needs of all three industry giants. Each potential customer had latched onto the value of a particular capability BayPackets had developed in building their initial offering, but each of those capabilities would require much more work to become the new solution that each industry giant actually wanted. And of course, each potential customer wanted something quite different from the others.
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If BayPackets had tried to meet the needs of all three companies at this stage in scaling up the business, they likely would’ve failed to successfully meet the needs of any of the three. Confusion and internal conflict would’ve been prevalent within the company, likely driving away their most valuable employees, making matters even worse.
I flew to California and began working with Ken and his team. We used the “Strategy Lab” process and “Strategy Sieve” discussed in my previous article. Looking at the diagram below, we explored the capabilities that each of the three customers were interested in within the context of the market opportunity for the company, what they were really good at and could establish market leadership around, and what the company leadership was passionate about. We determined that the future of the company was to build out the feature development capability (which Customer B desired). This was really unique and had the potential to eventually create tremendous value in many markets. That capability was also naturally aligned with offering the new features that Customer C wanted. However, the call record processing capability wanted by Customer A was an important part of the product, but it wasn’t the foundation of the future of the company.
Setting this direction forward made it clear what types of expertise to continue to hire and develop, how to refine their elevator pitch and marketing materials, and who might be key partners. Without this direction, the company would have continued to pull in all three directions, probably causing unproductive chaos, conflict, and compromise.
Building upon this focus, BayPackets was able to successfully land Customers B and C, and grow from that early success to serve top tier wireline, wireless, and cable operators in the U.S., Europe, Latin America, and Asia. They were even able, later in their development, to serve Customer A. In 2006, GenBand acquired BayPackets for its technology and customer base for a sum reportedly just under $100 million.
Growing/Maturing Visionary
Once the initial vision for the company is set, and everyone in the company is working towards that vision, the nature of the CEO as visionary transitions again. From this point forward, changes to the vision should be very infrequent and only for very good reasons.
That doesn’t mean that the CEO and his team stops challenging the vision. Instead those challenges become very structured and systematic. Specifically, the CEO should oversee regular and ongoing monitoring of global and industry trends and events, with a very specific eye towards how those changes might impact the business. This process is described at length in my earlier article about Global, Industry, and Business Vision.
In addition to a methodical examination of the ongoing current business, as the company matures, a visionary CEO can also begin to envision additional markets and solutions that the company could pursue. For a highly visionary CEO, these ideas may need to be tempered somewhat by a leadership team and Board of Directors who make sure that the company pursues those with high potential that won’t unnecessarily compromise the performance of the core business. But a good CEO won’t settle for merely being satisfied with the status quo.
The Power of Vision
The King James Version of the Bible translates the first part of Proverbs 29:18 as “Where there is no vision, the people perish”. The word vision here refers to revelation from God, and without God’s leading, the people of God do whatever they want, without guidance or constraint. This not only leads to physical danger, but also spiritual death. The second half of the verse provides the contrast: “but he that keepeth the law, happy is he.” As Psalm 119:45 says “And I will walk at liberty: for I seek thy precepts.” We know that when we operate within the boundaries of God’s constraints, we have tremendous freedom and we know that God will bless us (in His way and in His timing).
Similarly, when we provide vision for the people that God has given us to lead, then our people will know how to direct their efforts, knowing that their efforts will complement, not conflict with others, and trusting that we are leading them towards success.
Even more so, if the vision we provide is compelling, we motivate our teams to achieve great things for a great purpose. In Drive, his best-selling book on motivation, author Daniel Pink identified Purpose, Autonomy, and Mastery as the things that truly motivate people in their work. If our people know and believe in the purpose for their work, and they are given a fair amount of freedom in how they work towards that purpose, and they have the opportunity to grow in their ability to do their work, then they will be motivated to put all their effort into doing the work well.
Which, of course, is key to making our vision a reality.
