Jonathan Lowenhar: uncertainty

Transcript context

…Also, a little bit more graceful of an answer there is also our CEOs want urgency and passion and excitement from their teams. They want them working enormously hard for below market comp more often than not with this promise of equity that might return value five or 10 or 12 years later. They want them to bring all of that emotion, but they're supposed to figure out how to surgically cut off the emotions that are inconvenient. That's the robot CEO who believes that we can just have several robots working for us and you just press a button and they do a thing. Second one is a pleaser CEO. This is the person who is far more concerned with being liked than running a business, so they can't tell anyone hard news. They can't break ties, they want a consensus on everything, and that's not possible. If you have a group of thoughtful people working for you, they're going to fight, they're going to debate and you want them to. Then at some point you have to call it and say, "No, we're going left not right." Or, "The two of you need to go get in a room and deal with something." Or, "Hey, the way you just showed up is not the way I want you to show up." The pleaser CEO won't do any of that. They will simply hide and pray It goes away and it won't go away. Next one is a perfectionist CEO. I'd like to say that these are the CEOs with the most beautiful product to be delivered minutes before they file for bankruptcy. This is the person who is far more concerned with being right and believing that there's always a right answer than just moving forward. It creates two problems in a business. One is you're just slow and the other one is you'll never take any bets because you will build a team that realizes the CEO is not allowed to be wrong, so you can't disagree, you can't use intuition, you can't use gut. Everything has to be utterly factual and that is simply not possible. In early-stage startups, you have more questions than you do answers. Everything is circumstantial. It's not like watching CSI entrepreneurship and you get to see a video to say, "Oh, look, the guy did it." No, we have a bunch of little data points you have to come to a conclusion. The next one is the angry CEO. I had a founder of mine a bunch of years ago and we were seeing a pattern across the leadership team and he and I get on the phone one morning and I said, "I have a theory for you. It might be a story, I might be wrong, but I want to share." He said, " Okay." I said, "I think you wake up in the morning angry and you don't know it, and then you get to the office and you beat the crap out of the first employee that crosses paths with you over something utterly unrelated because you're angry. You realize that a few hours later and you apologize and your team hasn't quit yet because they believe you're a good human who doesn't have good self-control." Then I shared with him, "And you just had your first child. ew hours later and you apologize and your team hasn't quit yet because they believe you're a good human who doesn't have good self-control." Then I shared with him, "And you just had your first child. My guess is because I'm not a psychologist, I'm not a therapist, that you are modeling something that's happened in your life. Is this something you want to change?" His answer is yes, and I said, "Great. I have good news and bad news. The good news is because you said yes, we can do something about it, and the bad news is I don't know what to fucking do. That's not my job." The point being, no one wants to work for the angry person. I don't care what the equity potential is worth, no one wants to work for that person, and the moment they see greener pastures elsewhere, they're leaving. The next one is the one that drives me particularly crazy, it's the laissez-faire CEO, who insanely believes that I can just hire great people and utterly ignore them and let markets take care of themselves and they will do all the right things. I have never met anyone, Lenny, that didn't benefit from good management and the laissez-faire CEO believes that management is not required, and so what they ultimately find is they have really, really good people doing utterly disconnected things and goals are not achieved. Every CEO we can reductively reduce to one of two characters. They're either comfortable with the brake or comfortable with the accelerator. The challenge with those who are comfortable with the brake, what I mean by that is they don't want to spend any money, so they're driving this beautiful sports car and they're just leaning on the brake the whole time. Yes, they won't run any money, and yes, they will also get lapped by everyone else and miss the opportunity. Where their opportunity is, is where can you take bets? Where can you actually downshift that car in such a way where you give yourself a chance in the market? Separate, those who ride the accelerator, we've all met this one. They're going to run out of money really fast, and this connects to one of our other challenging CEO types, the ready, fire, aim. Most CEOs are really bad at planning and that's because there's this little-known secret in the Bay area, most CEOs have never run a business before. Planning doesn't have to be some heavy bureaucratic multi-month exercise that begins in August and ends in February, but a little bit of bottoms up planning to say, what are we trying to achieve? How do we quantify it? What resources are required? What humans are going to do what? How do we shorten feedback loops so we know in a week, in a month and two months, whether we're on the right trajectory? The ready, fire, aim CEO says, "I don't want to do any of that because they're improvisational and they just want to take bets and they want to take shots," and that's what got the company started, and that's also what will have the company go bankrupt. The micromanager one is the opposite of laissez-faire. They believe that no matter how many employees they have, they can do the job better. The challenge with this one is it is massively disrespectful to those who work for you. opposite of laissez-faire. They believe that no matter how many employees they have, they can do the job better. The challenge with this one is it is massively disrespectful to those who work for you. We think that, and this is a bit insulting, that everyone that works for a founder can be fit into one or two chunks. They're either an adult or a child. I have a three-year-old, my little girl is amazing. I'm utterly in love. If she doesn't have a lot of structure and a lot of supervision, she's going to run into things, man. Into things, off things, through things, but adults don't need to be given utter instruction and watched all the time. In fact, it needs to be the opposite. We agree on what success is, what resources are, and you let them go and they'll come back to you when they have questions. The micromanager CEO doesn't see the difference between those two humans. They don't trust anybody and that's actually the thing under the thing under the thing, so they want to do everyone's work and that will succeed right up into the point everyone quits.…

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