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Reprinted from informationarbitrage.com. See original post here.
By Roger Ehrenberg
I’m a Midwestern guy and I was raised to be polite. And while 18 years in the markets put some dents in the veneer, I will say that being blunt, straight-forward and honest is a quality I appreciate in others. There was a very good post titled On Honesty in Startupland, where this notion of being able to receive tough feedback (hopefully delivered in a respectful way) versus hearing sugarcoated BS is important for growth. I firmly agree. This post was largely written from the perspective of an outsider giving feedback to an insider, e.g., an investor, consumer or another tech entrepreneur offering feedback to a founder. However, equally as important is the dynamic working in the other direction, from the founder out towards investors and others. And this is where I’ve seen some mistakes made that are a direct function of inexperience and/or a latent desire to please rather than to lead.
For instance, there are times when a founder just needs to tell their investors “This is the way I want it done.” It can relate to business strategy, financing dynamics or any other issue that impacts the company and where a clear decision is required. This is not to say that input shouldn’t be solicited and feedback taken: it absolutely should be. But the buck ultimately has to stop with the CEO, and if the CEO cedes effective leadership to the Board it will create both an unhealthy dynamic and an untenable situation as more real-time decisions need to be made. And truth be told, what the CEO thinks is right may not agree with what the Board thinks is right. And this is ok, as long as people are heard and their views are respected. But the CEO needs to lead. Period.
I have found that many first-time entrepreneurs grapple with this issue. They’ve never taken angel or venture money. They have a huge sense of obligation to leverage the syndicate they’ve assembled. They also are somewhat cowed by the amount of experience and force of personality sitting around the table. It requires a high degree of self-confidence and esteem to really lead in the face of people with years more experience than you. However, they invested in you because of your vision and your capacity to drive the business. They want to see you step up and lead. But there are times when they can’t help themselves and become overly controlling (which is in the DNA of many successful people) unless actively managed by the CEO.
They key take-away is as follows: don’t confuse the desire to please with the obligation to listen. A good CEO takes in lots of feedback from smart people, is a keen listener and extracts the best insights from each. But just because feedback was offered doesn’t mean it needs to be taken. Be respectful but be firm. And by all means, be a leader.
Roger Ehrenberg is the founder and Managing Partner of IA Ventures. Roger currently sits on the boards of BankSimple, Kinetic Global Markets, Metamarkets, Recorded Future, and The Trade Desk, and is a Board observer of SavingStar. Formerly, he served on the boards of Alphacet, Buddy Media, Global Bay Mobile Technologies, Magnetic, Selerity and Stocktwits. For his complete bio, click here.
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