There are 2 types of lead entrepreneurs. The Founder and the CEO-Founder.
The Founder has often spent her whole life in the industry in which she starts her own business. Even if she is young, she starts it using technology she is familiar with, she understands the interests of her customers due to deep expert insights and works with people she trusts. Examples include the founders of Oracle and Google or Inditex (Zara, Bershka etc.).
The Oracle and Inditex founders were both 40+ years old industry veterans when they started their business. They knew everything about their customers’ needs in detail, the technology and sociological aspects of the industry. They had a passion and built sustainable businesses that resemble their life time work. The Google founders, even though they were not that old when they started, were the biggest tech nerds you could imagine who knew everything about the problem of searching for knowledge and had a lot of tech insights which helped them solving it. They hate the admin side of doing business, having transactional relationships with partners and other CEO related activities to that day and work both in functional IT departments of the company.
The CEO Founder knows the business game. She understands that anyone with a business that grows in revenue, employee count, reputation and value created for stakeholders, will lift off, if she keeps her head and a strong team long enough in the game, figures stuff out and does not get bankrupt. Few people have enough persistence and conviction to do just that. Examples include Mark Cuban (Broadcast.com), Richard Branson (Virgin Airlines) or the Samwer Brothers (Rocket Internet). These people knew nothing about the technology or products they built or had experienced their customers’ needs for a long time before they started. Mark Cuban did have no IT or Film industry background, Richard Branson did not work as an engineer or as a pilot before he started Virgin and the Samwer Brothers did not work in food delivery or home supplies industry before they started Hello Fresh and Home24. They understand basic human needs for entertainment, travel and shopping and know that investors seek for profitable opportunities. Moreover, they realize that very few people understand every technology in depth, know all laws or all business scaling issues. They understand that you can buy expertise and figure out a few things along the way, as long as your business has a perspective. What they play is a purely strategic game that is sometimes criticized as not being sustainable. It is not played by many people successfully because it is exhausting to work in a field in which you sometimes have as much questions as your customers in the beginning and the pressure of dealing with so much uncertainty as a founder is tough.
Let’s assume a management master student (e.g. BIM) would want to start a business today that involved new technology or information systems in the fields of IoT or AI customer support for instance.
As far as my judgment allows it, 95% of them would fall into the 2nd category of founders.
There are thousands of people worldwide that try this approach. They deal with the operations, the financials, the legal aspects, the marketing side of business and after a while, they realize how hard the competition is and how little profit is left at the end, subtracting all admin expenses.
But what is the competitive advantage that helps you win this game and capture enough market traction to be able to overcome the financial trouble of the first couple of months/years?
The answer is: Information
What all these management student separates is the amount of industry knowledge they have and how quickly they learn. You need to have information about all kinds of industry players, talented engineers, niche technology and trends before anybody else does. If you leverage the access to critical players and resources you can offer a superior product and get most of the stakeholders’ attention.
What is especially critical: You need to know these things, even before the authors and journalist of famous technology/innovation magazines such as TechCrunch or t3n do and write articles about them. Because as we learned again from our dear friend Michael Porter: If your competition has access to the same opportunities as you do and leverages them, you will not gain a competitive advantage. But how can you overcome this race for information and resource access?
Tech-Facebook Communities!
Having worked in an early stage, new tech, new market start-up, a large portion of my work was to browse and be active in these groups. The amount of information and mutual support in these communities of which I have selected and stated a few below, is incredible. You can ask tech-related questions regarding the latest cutting-edge products and services, search for developers or designers and be at the frontier of the latest movements. I have literally seen Tech Crunch, t3n and other tech-magazine authors write articles about discussions that took place in these FB communities or people who lead the groups or contribute to them weeks later. This means if you scan these groups and interact with members regularly, you will have information and contacts before the early majority. Many community members also helped each other improving their investor pitches or find suitable employees for their start-ups in private chats that emerged from the group activities. If you combine your business skills of managing resources, people and attention with the insights from these groups, you will have a strategic advantage!
Selected Tech Communities:
1. Young Creators Group https://www.facebook.com/groups/youngcreatorsgroup/?fref=ts
2. Bots https://www.facebook.com/groups/chatbot/?fref=ts
3. Artificial Intelligence & Deep Learning https://www.facebook.com/groups/DeepNetGroup/?fref=ts
4. London Tech Startups https://www.facebook.com/groups/londontechstartups/?fref=ts
References:
https://pitchbook.com/news/articles/founder-vs-ceo-who-creates-more-value
