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When First-Time Founders Become Managers

Leadership
New Manager of Manager
Internal Communication

24 August, 2020

Brian Hough, CTO at Beam Dental, taps into his experience of both reporting to first-time founders and managing them.

Problem

All of our three founders were not only first-time founders but none of them have ever worked in any other company before. They started their company while they were in college and it grew from there. As a consequence, they accumulated a significant subject matter expertise relevant to the industry but had a very scarce experience of how to manage a company’s day-to-day operations or how to deal with all the challenges that are coming up with the next level of scale. Most importantly, they often didn’t know what they didn’t know.
 

While working at my current company I have had the founders both as peers, have reported to a founder, and have had a founder who was reporting to me. I had to create structures at all three levels in order to help coach them as executives but I also used that opportunity to learn and absorb their subject matter expertise of the dental industry.
 

Actions taken

The first thing I did was to set up a two-way feedback mechanism. Instead of having traditional one-on-ones where people would come in and we would discuss what they were doing well or not doing well, I have tailor-made one-on-ones specifically for the founders where they were able to give upward feedback to me on a more regular basis than through traditional one-on-ones. Those encounters helped me better understand the dental insurance industry (that I was unfamiliar with before joining the company) and how I could efficiently build engineering teams that would serve the business.
 

The very next thing was to establish a clear accountability framework. One of the key challenges with inexperienced founders was that they didn’t know what good looks like. They knew to some extent what it felt like but they didn’t always understand what was the amount of effort something would take and they didn’t necessarily know when something was completed or was successful. Prior to any major initiative -- whether I was reporting to them or they to me -- I would outline exactly what accountability looked like so that everyone was aligned from the very beginning.
 

Finally, I would overleverage skip-level one-on-ones. Our founders have been best friends for the better part of their life and I decided to provide them with a mechanism to talk to each other and raise issues they wouldn’t be comfortable raising with me. In this particular case, I was reporting to a CEO who was one of the founders, and I made sure that he had skip-level one-on-one with people who were reporting to me or were peers of mine and as well as through 360-degree feedback. If they would have issues they were not comfortable sharing with me, they could share them with him and two of us could discuss it later. First-time founders would often struggle to engage with someone because they were used to being on the top of the hierarchy and were, therefore, either uncomfortable giving upward feedback or simply haven’t done it before.
 

Lessons learned

  • Founders often don’t know what they don’t know. But, they also have the most unique subject matter expertise and setting up the system that will allow you to leverage them for their subject matter expertise will spare you from re-learning lessons they’ve learned.
  • You should acknowledge their scarcity of experience and refrain from assuming they know some things. When you need something from them, don’t take for granted that they know what you need.
  • Don’t be afraid to ask them, Have you done this before? or Do you have a framework for tackling this particular task? It will be much easier if you ask upfront. Though everyone has their own strengths and weaknesses and mistakes naturally happen, with first-time founders mistakes will happen in different areas than what you would expect. They're going to happen a lot more on the execution side and a lot less on the ideas side. They tend to know the company and product really well, but they don't always know how to get their ideas to fruition especially as the company scales.

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