As both a founder and a CEO, will this kind of person be a single point of failure of the enterprise?

文/Dileep Rao Contributor

Image source: Visual China

When Jack Dorsey stepped down from his position at the helm of twitter, one of the unicorns he founded, he noted that he left because he thought the founder's concurrent CEO would limit the company's growth and could become a "single point of failure."

Is Dorsey right?

Right and wrong.

Founders and CEOs can indeed be the limiting factor behind a company's growth, especially if they can't grow with the business.

There can be many reasons for a business to fail, including funding, sales, pricing, costs, employees, and other factors, but all of these factors ultimately point to the entrepreneur. A successful entrepreneur must be good at balancing the various needs of the business and making the right decisions. This is not the case for failed entrepreneurs. More than 50% of businesses fail within the first five years of their founding, a fact that most entrepreneurs (or founders and CEOs) are the limiting factor in growing a business and that Dorsey is right about them being a "single point of failure."

But there is another side to the matter. When it comes to 94% of unicorn entrepreneurs, Dorsey is wrong. These unicorn entrepreneurs have really turned their businesses from an idea into a real unicorn and built a company like no other. Note that we're talking about a market cap and sales of $1 billion, not a valuation that can be manipulated like a venture capitalist unicorn. These companies include:

WALMART — Sam Walton has built it from a startup in rural Arkansas into one of the largest in the world without venture capital.

MICROSOFT — Bill Gates built the startup into one of the largest software companies in the world.

Apple — Steve Jobs grew from the startup's founder to an idol figure, and though he was later fired, he came back and made Apple one of the greatest companies in world history.

AMAZON — Jeff Bezos has grown from a startup to a global e-retail hegemon.

FASTENAL — Bob Kierlin built the big fastener company with a $31,000 stake without venture capital.

Best Buy — Dick Schulze started from scratch and built this great retailer for $9,000.

UnitedHealthcare — Richard Burke founded the world's largest healthcare company with a $40,000 loan without venture capital.

There are many more people like this, but not so many. Some entrepreneurs are not limiting factors or "single point obstacles", but the builders of unicorns. So, how did they overcome the hurdles to build a unicorn company?

They recognize the changing needs of businesses at each stage of growth

A business goes through many stages in the process from idea to becoming a unicorn, including idea, start-up, emergence, take-off and growth. Each stage has its own special needs. Those who don't adapt to the needs of each stage will eventually fail or be left behind. That's why entrepreneurship is a pyramid, with many people at the bottom and only a few at the top.

They develop skills and strategies to get started without venture capital and maintain control of the company

94% of unicorn entrepreneurs started without venture capital, and 76 percent avoided venture capital altogether. Aside from Silicon Valley, where most unicorn entrepreneurs have received venture capital. But even there, most people will delay funding and maintain control. Dorsey is a Silicon Valley entrepreneur. He accepted venture capital early on and did not maintain control of Twitter.

They learned the skill of leading a giant after takeoff

Dorsey seems to be very good at taking a startup off. He's done it twice — Square (the company recently renamed Block) and Twitter. Square's success shows that even after the company took off, he still had leadership skills. So why did he leave Twitter?

They focus on one company

Unicorn entrepreneurs are usually very focused — focused on a unicorn. Few people try to lead two unicorn companies at the same time. Musk is an exception. Dorsey is another. Now, Dorsey points out why focus is important. It is very difficult to lead a large company and succeed. Dorsey used to think he could lead both. Is this arrogance?

My point is that very few people can turn an idea into a unicorn, and even fewer people can make two unicorn businesses, because it's not easy to scale up. You need to find the right opportunities, develop the best strategy, fund growth, fight the pull of risk, recruit the right way, get the right incentives, get the right controls, and lead right to beat the giants at the top of the pyramid. To do this, you need innovation skills, strategic skills, financial skills, start-up skills, control skills, organizational skills, and leadership skills. Dorsey did it twice. But few people can run two giant companies at the same time and succeed in both companies. Dorsey is proving the value of focus.

Translated by Vivian School Li Yongqiang