The trend within the venture community over the last decade or so has been the notion of “founder friendly” — supporting your founders through thick and thin.
It arose out of a FOMF (Fear Of Missing Facebook): when Facebook’s Mark Zuckerberg passed over Sequoia because of Sequoia’s relationship with Zuck consiegliere Sean Parker and his previous company Plaxo. Who wants to make some hard decisions in a portfolio company going sideways when that founder might bad mouth you to the next Zuckerberg?
To be clear, there has been a history of experienced venture capitalists completely screwing over inexperienced entrepreneurs (I have no idea what happened at Plaxo). This is wrong, and comes from the zero sum world of private equity. This behavior should not be tolerated. But founder friendly has evolved one step further: it says we’ll support the founder through anything.
Well, fuck that.
We’re here to build companies and products. It is, and this may shock you, not about the founder. Just like when I’m recruiting my team, I want board members who will push me and the company forward. We’re here to build companies, not egos.
Sometimes founders aren’t the right people to scale the business. The right CEO to go from napkin sketch to product-market fit might not be the right leader to think through defining internal incentive structures, or how to scale the creation of new product lines. And I think we’re sacrificing a lot of great $10 billion, $20 billion, and $30 billion businesses because founders and venture capitalists are so stuck on the idea that it requires a founder to make an Apple, Facebook or Microsoft.
And sometimes, the founder is a massively skilled operator but morally bankrupt. Or something in the middle.
Now, this is not to say the founder CEO should be pushed around by their board of venture capitalists. For one thing, the board simply don’t have the information necessary most of the time. Operating puts you so much closer to the details, and the founder will have done so many more reps to understand their market and their company, that this intution is extraordinarily valuable.
But experiened board members have other advantages: they should know what excellence looks like across roles (even roles you’ve never met), they will have seen companies hit your phase of growth before, they will be able to see the meta-company patterns. But a board member is not a babysitter. Their role is not to be your patient friend. The job is to push you forward, much like that is your job with your own team.
Some investors take a different and important role: consigliere to help a founder get the best out of themselves. And they eschews board seats. Why? To borrow from someone else: “I can grade you, or I can teach you, but I can’t do both.” We need both.
But when you take a board seat, and you tell me you’re founder friendly, I’m going to ask you get off my board. Because I want partner in building the company. A partner who will put in the time and effort and moral backbone.
I’ve seen too many companies because of the ego of their founder and cowardice of their board, fall far short of their potential. And this bad for everyone: the founders, the board, the employees, and their customers.
So kudos Benchmark for standing up. I just wish you had done it sooner; Uber would have been a better, longer-lasting company for it.