The patchwork of legend that our society has created about entrepreneurship and founders is fascinating in part because of how inaccurately it describes most people behind successful startups. Assumptions about how irreplaceable and critical to every operational aspect of the company they are, the nature of their personality and appetite for risk, and even their likely age and experience run counter to the simple truth, which is that there is no one type of person most suited to starting and growing a successful company.
This is true whether we’re talking about local service companies that grow over time into a robust enterprises, or a massively disruptive organization built on innovation with explosive growth.
This is good news for anyone that feels drawn to the adventure of becoming a founder, which at its core, is an expression of the creative spirit that lives for bringing forth something out of nothing, and knowing that the world is different than it would have been but for their efforts.
Deep vs. Wide Knowledge
But people do have distinct traits, and one of the more important categorizations for entrepreneurs is the difference between the “expert” and the “generalist”, and both types have advantages and challenges when it comes to founding a business.
While there is some evidence that, given certain conditions, founders with deep technical skills (the “expert”) have advantages over founder with broader business skills (the “generalist”), this is by no means a disqualifying finding for the generalist. Rather than draw false conclusions about who is more or less likely to succeed in the long run, we should instead consider how to best manage the implications of these distinctions.
We’ve seen that one of the most tangible differences between the generalist and the expert, especially in the early stages of a company’s growth, is how they manage the incredibly diverse set of tasks and responsibilities that are required to get a company off the ground.
The number of roles that a founder needs to cover is something that most people are unprepared for. In the first few months of a company’s existence, founders discover that they need to be strategists, marketers, IT experts, copywriters, sales people, designers, accountants, coaches and much more, in addition to executing the core functions of the company.
The generalist more naturally embraces this set of diverse responsibilities, while the expert struggles with it, often becoming increasingly frustrated at the limited opportunity to do the work that they set out to do in the first place.
The Value of Your Time
This is where things get interesting. How does a founder make the decision to stop designing marketing collateral and outsource it to a designer? When does it make sense to stop following up with every lead or customer yourself and bring on an assistant or salesperson to do it? At what point should you pay for legal advice rather than spend time trying to figure it out on your own?
Conceptually, the answer is clear. When the opportunity cost of your own time exceeds the cost of getting someone else to do it, it’s time to delegate.
Of course, it’s never quite that simple. The value of your own time is not an easy thing to measure, and varies based on several factors, such as how likely it is that you can capture that value in revenue and whether you have the flexibility to expand the time you have available to apply to the business (easier for some than others).
What is true, however, is that the expert is more likely to make the mistake of outsourcing or hiring too early, which is problematic if it burns scarce cash at a time where every dollar counts. Equally, the generalist has a tendency to wait too long to delegate responsibilities and roles to others, which can harm the growth potential of the company by preventing the core work of the organization from getting done.
This speaks to the one expertise that all founders need to cultivate, regardless of whether they have deep technical skills or broad business skills. Resource allocation – including the allocation of one’s own time to certain tasks and roles – is the meta-skill of the entrepreneur. Knowing how to apply available cash, people, partners, technology and expertise to their highest and best use, is ultimately the key to unlocking the full potential of a startup, and the earlier this skill is learned and deliberately applied, the better.
Founders are Self-Made, Not Born
There are trade-offs and uncertainty everywhere, and founders will constantly need to make their best calls from day-to-day and year-to-year on how to manage the complex set of resources that are their responsibility. But this is something that can be learned, which is why we need to thoroughly reject the notion that some people are naturally more suited to being a founder than others.
As Alexander Pope wrote “… and all our knowledge, ourselves to know,” which reminds us that there are many paths to success, but by better understanding how we work and what makes us who we are, we’ll be better able to make our opportunities work best for us.
