If the company fails, this will be the height of hubris, an Icarus moment; but if we succeed, this will show great foresight: I would like to plan for my own succession, and I would like us as a company to build a succession planning system.
A brief plan.
After our seed round last year, there were two key hires I needed to make: an Executive Assistant that could evolve into a Chief of Staff, and a COO that could evolve into a CEO. Now I have both. And that leaves me with only one functional role: fundraising.
I would like to raise a Series A and take the company to profitability by Q2 2020. I want to assure that the company has a model for both making and re-investing profits, and is well capitalized.
This accomplished, once I have assured myself that we have a relentless culture, a strong roadmap, a capable leadership team, reliable core systems, and a trajectory for Series B and beyond, I want to transition.
I would like to promote my successor, and move into the Executive Chairman role. As Executive Chairman, I would still sit on the Board, remain actively involved in high-level decision-making, and guard-rail the transition. I would continue to shape the strategy, vision and culture, and invest my energy and ideas into the company. But the new CEO would be responsible for day-to-day leadership and decision-making.
My time would be freed up to work on new problems and new projects. Any new projects would remain inside the company, as Executive Chairman is an active role. Freed from running the company, I would be able to innovate with a freedom I haven’t had since the beginning.
To set a “yellow line,” I would like to transition in roughly eighteen months, by the end of next year, December 2020. This is a yellow line, because I believe that red lines are foolish. If I have to, I’ll remain in the role as long as I need to. But my intent is to “design” the CEO job, and then find someone internally or externally, preferably internally, who can do the job better than I can.
This follows the general principles of abstraction, leverage, and genius: enter the chaotic unstructured void, structure problems into solved systems, do the job, hire and train someone else to do the job, then re-enter the void; with each cycle, moving closer and closer towards your highest purpose.
Furthermore, I would like to build a succession planning system that forces the entire management team to execute similar transitions. I don’t want anyone staying in their jobs forever. I want everyone staying in their jobs for long enough to benefit from the compounding interest of working with people you know and like and trust, on a mission you care about. But I don’t want anyone to stay so long that they lose freshness of passion and purpose, and settle into a “career job.” I want to make way for new talent. If every VP role is permanently filled, then the most talented Directors will leave.
Conversely, if every VP is forced to leave, there will be a brain-drain, and that is also not in the company’s best interests. So what I would like to do, after profitability and the Series A, is to constantly promote our top VPs into General Manager roles, starting new businesses internally. Effectively, they will be mini-CEOs. There are so many adjacent opportunities to Invisible, and new opportunities that Invisible enables that weren’t possible before — that could all be networked into a common platform. And a VP that has been successful for 2–4 years is ready for a new challenge, either leading a new business unit, or supporting one.
THE MAIN MESSAGE: LEVEL UP!
“I had rather be any kind o’ thing than a fool!”
Why make this announcement now, not later; why not wait until after the round? If this proves foolish, in defense of my foolishness, I want to send a simple message to partners, in the strongest possible terms: LEVEL UP! These were the strongest terms I could find, because they put my “money where my mouth is.” Level up, so that you can take your boss’ job in 18 months, so that your boss can take your boss’ boss’ job, and so forth. Level up now, not later!
The Jedi had the right idea. Promotions at this company depend not just on your performance, but on your ability to recruit, retain and train a protegé, who can do your job as well or better than you, and who can, in turn, hire and train their own replacement. Hand-in-hand, everyone is linked in a chain of ascension.
Everyone needs a story to tell themselves about their future at this company, otherwise they will imagine a future elsewhere. The most desirable possible future should be here. And that means designing a development plan for every single partner, and giving everyone a motivating trajectory.
But it also means designing extraordinary challenges: in a meritocracy, every promotion must be earned by doing, not just staying. And the doing must be harder and harder, the higher you go. Now that humanity has gone to the Moon, we must go to Mars. Having gone to Mars, we will go to Jupiter, and so on. The more partners we have, the more resources we have, the more we have accomplished in the past, the more leverage we have in the present, the harder and harder the challenges we must set for ourselves in the present.
On the one hand, we have to make room for new talent. On the other hand, we cannot make it easy for new talent. Parents should always expect more from their children than they expected from themselves. Sons should outshine their fathers, and daughters their mothers. That is the greatest achievement of parenting. And so it should get harder every generation. The son who outshined the father must, in turn, become the father whose son outshines him.
If we get soft, then we will decline. If we stay in our roles too long, we will stagnate. We can do neither.
But if we get this right: if we expect greatness from everyone, and we always evolve, we’ll create a business explosion. Any company that figures this out — how to systematically attract, incentivize, level up and reproduce leaders — will be able to grow at a faster rate than other companies. If it is in a fertile industry with a lot of leverage, it won’t run into fundamental limits like GE did, with an unwieldy conglomerate — a business of businesses that had no real synergy between them.
Let’s create a business explosion. Level up!
The second message: eliminate key man risk!
As nice as it is to think that I’m so important the business can’t survive without me, it is also a huge burden, and bad business. Good business is replacing yourself, and watching a machine run without you. That is the test of entrepreneurship: can you build something that creates value and runs without you. Until you step away, you’re never quite sure. And it’s also a test of ego: can you let go?
Systematically eliminating key man risk is an important business principle. A great business simultaneously leverages its talent as much as possible, seeks to retain its talent as long as possible, and seeks to eliminate its dependency on any one individual as long as possible. These three goals are in tension, but the paradoxes are resolve-able.
The third message: don’t burn out!
When people stay in their roles too long, they burn out. Some people have incredible stamina and incredible pride, and so they won’t quit, but they will stop being as creative and energetic as they were in the beginning. When you focus on a limited tenure in a role, and you have an end date in mind, then you get more done in a shorter amount of time, and you don’t feel like you’re in a prison. Work should increase your sense of freedom, not make you feel trapped.
Also: be a flexible team and respect the potential in everyone!
In a culture in which movement is the default, everyone is more flexible. That flexibility encourages team-work. And in an up-and-over culture, everyone expects more from everyone else, but everyone also respects everyone else more. If you’re at the bottom of the hierarchy, you’re not a squire, you’re a knight-in-training, and perhaps far more.
An essay on succession planning.
Succession planning is an ancient problem. In Common Sense, Thomas Paine makes it his principal critique of monarchy: “an ass for a lion” — a benevolent and wise king may give way to a malevolent fool of a son and heir. If instead of uttering “to the strong,” Alexander the Great had shaped his succession, Greece would have been Rome. If Charlemagne had not, like King Lear, divided his empire in three equal parts for his three sons, a new Rome would have been reborn in the dark ages. And on and on, history rhymes this lesson.
In recent business history, Steve Jobs cared about succession planning and said that “what would Steve do?” should not be the compass for decision making after his death, but that a company must always re-discover itself in the present. And yet, even with his great care, his death left Apple under a stewart, not a king — or so it seems, as Tim Cook has failed to fundamentally innovate, in a fundamental innovation company.
At Bridgewater, Ray Dalio has shown more care with succession planning than any CEO I’ve heard of. If I recall correctly, his succession has been in progress for over a decade, and great care has been taken to document, to hire, to train, to build decision-making systems, to design a “constitution” of sorts — all to fill the void.
Human projects struggle to survive in deep time: the most sturdy institutions become fragile when subjected to the chaos of decades. Shelley commemorated the futility of our great endeavors in Ozymandias, and the myth of Babel pays tribute to human arrogance as well: how glorious are we that we seek to rise to the heavens, and how foolish — for nothing we build tends to last, and we are but mortals who breathe in this brief space from dust to dust.
As arrogant as succession planning is, in contending with the gods of time and chaos, there is something of Jacob wrestling with the angel, something of the unlost glory of fallen man, something foolish, yes, but brilliant, and even humble, too — to dare to fight with forces far beyond us.
I find Dalio’s succession planning far more humble, for example, than Zuckerberg, Musk and Bezos’ perennial reigns. “You can’t replace the founder” has become something of a Silicon Valley dogma, and Zuckerberg is the ideal scenario, where a young CEO ascends to power in the flower of youth, and has decades before him to forge an empire — where youth is synonymous with stability.
Certainly, a VC replacing a founder is foolish and unlikely to end well. But a founder replacing himself is wise. There are many problems with the God-King model. The first of which, in my mind, is the disincentive to young alpha talent. An alpha of 20 is very different than an alpha of 30. There is something pregnant in the naiveté of youth, something powerful in the stallion-energy that compensates for the lack of experience. The old should make way for the young, or the young will leave to forge their own empires, and then make war on the old, in a belated but ne’er forgotten revenge. And that is indeed what is happening. The best young talent may join Google or Facebook for a brief tour, to learn from the inside what they cannot learn from without, but they soon leave.
Like 21st century Florence, the vital energy that built these companies will someday be ancient history, and only the structures and administrators and tourists will remain to tell the tale of past glory. What a great city that wishes to remain a great city must do, is make way for young talent, and make way for change. You cannot build taller than St. Paul’s in London, and so New York is a greater city than London, because London is baked, whereas New York is still under-construction. New York still wills itself to power, still invites the young and ambitious of the world to fashion the city in their own image, to make their fortunes and empires here.
In Nietzsche, man is the “as-yet-undetermined” being, and that is the glory of man: man is a bridge, a becoming. The true man is always seeking and challenging: challenging himself, others, and all great powers — so that their resistance may make him great, and that wrestling with them may teach him what friends cannot; seeking to transcend himself, seeking new meaning, seeking higher truth, seeking a more arresting beauty, seeking a greater purpose; building a greater civilization; becoming superman.
Is a great company different than a great individual? The company is an abstract person, a meta-individual, and it is my belief that a great company should do all of these things. It should set no limits for itself. Having achieved a goal, it should set for itself a higher goal. Having expanded once, it should expand ten times. Individuals are mortal, but a company is amortal, and can be something greater than any of us ever dreamed — all of our art and invention should be invested in companies, just as all our books are stored in libraries, because companies are capable of preserving value through time. If only! If only a company had continuity! If only a company’s leadership could peacefully transfer power to new generations, without any civil wars or acts of suicide. If only a rational romanticism may always obtain at the helm. If only!
Revolutions destroy value, but so does an excess of conservation: the balance of nature thrives on death and rebirth. Everything that evolves must shed the old and bring in the new and be dynamic and grow. There cannot be stagnant energy.
“The founding moment is always now.” This has been one of our mantras over the last three years, and a promise I intend to make fully good on. A cap table should tell the story not just of the past, but of the present and future. If a new hire cannot hope to someday be the CEO, to someday be a billionaire too — they will start their own company. But the ultimate company must have the ultimate team, and that would be a team of future CEOs. The more leadership potential you can cram into a company, the more powerful the business explosion that will result.
The ultimate business must always be exploding! How do I design a never-ending business explosion? There are a lot of practical answers to this question. Systems can be built to manage risk and unify strategy, frameworks can be used to improve decision-making, ideas and information in brains that can be documented on paper, forms that can be filled out and tests administered, checks and balances can be placed on power, and more.
The real barrier to designing a never-ending business explosion isn’t practical, but spiritual. Power corrupts: it is very rare for someone in power to relinquish power. So Cincinnatus and Washington are the myths that matter. Both handed back power. The Roman empire was in a constant state of expansion because they designed incentives for generals to conquer new territories, take a percentage of profit on the conquest for a limited period of time, become incredibly wealthy, then retire to Rome. The system fell apart when one general became too powerful and took power permanently: Caesar was the anti-Cincinnatus; the political anti-Christ of the Republic. Under the Caesars, generals had less upward mobility. The American empire has been in a constant state of expansion for almost 250 years, because ambitious people are free to take huge risks, create huge value for clients and then extract huge rewards. But the reason this is possible is because our political system allows it; and the reason that is possible is because Washington, the political Christ of the Republic, chose not to become king, and in so doing, made this a land of many kings.
Every company is a type of government, and the form of government in most companies is a dictatorship. Dictatorships have incredible advantages and can out-perform for periods of time. But in the long-run they are too fragile to survive. A better form of government is a constitutional monarchy, of sorts, that allows for most power to be decentralized in sub-monarchs, who run their own territories. The most able sub-monarch replaces the monarch every few years, the former monarch retires to run a new sub-monarchy, and every sub-monarch is also replaced every few years by their ablest lieutenant, so that they can run a sub-monarchy. Over time there are more and more sub-monarchies, until there are no more territories left to conquer. In a world in which there are practically unlimited business territories left to conquer, the real challenge becomes the integration of sub-monarchies to create imperial network effects — which is what GE’s unwieldy conglomerate failed to do. This is the challenge of the monarch, and why the monarch has authority over the whole feudal system: create a system where talent moves up-and-over, instead of up-and-out, and make sure that there are strong network effects between the businesses.
Many Caesars, one company.
This is my son, mine own Telemachus,
To whom I leave the sceptre and the isle, —
Well-loved of me, discerning to fulfil+
This labour, by slow prudence to make mild
A rugged people, and thro’ soft degrees
Subdue them to the useful and the good.
Most blameless is he, centred in the sphere
Of common duties, decent not to fail
In offices of tenderness, and pay
Meet adoration to my household gods,
When I am gone. He works his work, I mine.