Given that today is President’s Day, I thought it would be a good time to post about Founder’s Trap. Since President’s Day is at least partly about our founders, there is a bit of a tie in. What is Founder’s Trap? It is the problem that the business gets to when it needs to scale. If you are not sure what scaling is, then stay tuned here.
Michael Gerber’s book, “The E-Myth Revisited”, is targeted directly at Founder’s Trap. The storyline follows a business owner who hired employees, fired them and is spending all their time at work. This is what this series of posts is about as well. There is something very counter-intuitive here. In most businesses, to spend less time the business needs to get bigger. If it is not clear why, then let’s start with a sole proprietor who delivers a service. Let’s say an attorney. The attorney bills his or her time by the hour. If they take time off, they are not billing anyone. The only way to build a business that continues to bill while an individual attorney is still working is to have more than one attorney in the firm.
Let’s jump to a General Contractor. Here they go from being just a guy with a truck to having a crew. Then they go from one crew to multiple crews. Then they are stuck driving around from job to job all day and are limited in size by how many jobs they can visit regularly. They have to mix this with bidding, paperwork, buying materials, and other things that need to get done. The problem is that they are required for every job. This is why they can’t really take a vacation, unless they want to shut it all down. So, how do they scale up the business? They need to run jobs that do not require them to visit often. This means that there must be some other trusted party who can manage a job site and escalate issues when necessary. To put it bluntly, the company has to have the dreaded “middle management”.
So, what is Founder’s Trap? It is the inability to understand the role of outsourcing, employees and managers in allowing the Founder to do what he or she does best. Any person can only deal with so many roles within a company. Once that number has been exceeded, they either need to replace themselves or the company stalls in growth.
Why do company’s get caught there? Hiring the right people is not an easy skill set. Most people think about replicating themselves first. Think about yourself. You are better at some parts of what you do than others. Would it not be better to replace yourself on the things you are not as good at? So think creatively about the position that you are going to hire for and hire someone that complements what you do well.
You also need to focus on what I call soft skills. It is easy to measure the technical capabilities of an applicant. But how will you measure their personality and behavior. This will lend itself to who the best fit is for your individual job.
So, focus on the big picture and don’t fall into Founder’s Trap!
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