You're an entrepreneur. You identify a problem, devise a solution, and then launch a business to deliver that solution to the marketplace. And as the company grows, you continue to exercise control over every aspect of it because it is your idea and your solution, so there is no one better to ensure the company's vision than you, its creator.
Until you’re not.
Many startup founders desire to maintain control as the primary means to achieving their goals with their business. One of those goals, of course, is solving the problem on which the company is built. However, many of the other goals are much more personal. Things like personal pride and wealth, for example, come to mind. Thanks to people like Jobs, Gates, and Zuckerberg, almost every first-time entrepreneur aspires to build something big by controlling everything and gaining fame and a fortune when the company goes public.
It rarely happens.
Pride and personal recognition have fanned the flames of more crashing businesses than the successful companies those goals have fueled. Control is the problem for founders who, like Yertle in Dr. Seuss’s Yertle the Turtle, desire “to be king of all they can see” (Geisel, 1958). A king might see the wealth in the distance, but eventually, somebody sneezes, the king loses control, and everything comes tumbling down.
Being a king and building wealth are not mutually inclusive. Some research suggests that if you focus on maintaining control of your business, you may become king, but it is unlikely you will ever create significant wealth. And if you focus on building wealth, you will inevitably give up control (Wasserman, 2012). It is rare for an entrepreneur to maintain control and achieve wealth.
Here’s why: Like it or not, your business will inevitably outpace your skills, abilities, and expertise. If you believe controlling all aspects of the company will ensure your success, you’ll unlikely recognize when your company has outgrown you. You might be the king, but you’ll likely have little else. Plus, investors don't like kings all that much, particularly once you're out of the startup phase.
Whereas if you give up control, delegate to those individuals with expertise in their designated areas of your business. At the same time, if you focus on building the company's financial value, you will be more likely to create wealth. Investors like delegation. It allows you, and everyone else in the company, to focus on those individual strengths that build wealth. Even Jobs, Gates, and Zuckerberg eventually learned the only way to create real wealth was to give up control.
Which is more important to you, wealth or control? Now that you know, how will you structure your business to achieve your goals?
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References
Geisel, T. (. (1958). Yertle The Turtle. New York: Random House.
Wasserman, N. (2012). The Founder's Dilemma. Princeton: Princeton University Press.