A politician had an interesting observation that “all a man needed was a horse, a gun, and the open land, and he could conquer the world.” (StarTribune, 12/7/14, page OP4).
I don’t mean to agree or disagree with his assessment of what a man (or woman) needs to conquer the world in this century. But this statement is relevant to entrepreneurial leadership. My interviews with very successful entrepreneurs suggest that there are at least three kinds of entrepreneurial leaders. The politician seems to have nailed one of them (at least metaphorically) – the Cowboy Leadership method.
Cowboy leadership, in my definition, is our common stereotype of the lone entrepreneur riding the range and building his (or her) business. Cowboy leadership brings up memories of John Wayne and Gary Cooper. This type of entrepreneur is involved in all the key aspects of the business, which means that the business grows to the size that is manageable by one person (with a team of supporting actors, such as a CFO, chief tech officer, etc.). Many of the hundred-million dollar entrepreneurs in the sample of hundred-million dollar and billion-dollar entrepreneurs grew the business until they reached the limit of their own entrepreneurial capacity. This size was usually less than a billion dollars in revenues.
But there are exceptions to every rule. In the natural resource industry, many entrepreneurs have grown beyond the billion-dollar threshold with one person still in control. In natural resources, the more one has, the more one can dominate and drive out competitors. This was Rockefeller’s secret. So to become huge in this style, you need to control a key resource. Another exception is when a market is open for domination with a new trend and no one else is staking their claim (more cowboy language). Sam Walton was able to dominate retail in rural America without any major challenges. This excellent base served as the foundation for a global empire. In general, with Cowboy leadership, you grow to the level of your expertise. So build your expertise.
The second leadership method is the Silicon Valley style of leadership. Silicon Valley is the home of many new ventures. A few become billion-dollar companies – measured by sales and valuation. Interestingly, a large number of these billion-dollar companies are built by entrepreneurs who delayed getting VC and learned how to grow with the business. By delaying VC, they kept control of the business and of the wealth they created. They had a team, but they were in control. To delay getting VC, many of these Silicon Valley leaders, like Bill Gates (although he was in Seattle, he got his VC funding from a Silicon Valley VC), and Mark Zuckerberg, were skilled in key aspects of the new, emerging technology. So the next time you see an emerging technology, learn all you can about the industry and enter it. Then delay getting VC until you can stay in control. Then grow with the venture to learn how to manage each new stage of the venture.
The third leadership method is the Minnesota style of Emperor-Entrepreneurship. Minnesota does not have the natural resources of Texas (although it has one of the most beautiful, livable areas in the U.S), or the high-tech magic of Silicon Valley (although it had it in the 1970s). What Minnesota has built are great companies by Emperor-Entrepreneurs. This means that the great entrepreneurs of Minnesota, including Dick Schulze (Best Buy), Earl Bakken (Medtronic), Glen Taylor (Taylor Companies and the Minnesota Timberwolves), and Bob Kierlin (Fastenal) built huge companies by learning how to train and build great managers under them – the kings – and then gave these managers the freedom and motivation to build their kingdom, and the emperor’s empire.
I think the Emperor-Entrepreneurship style is more relevant to the world than the other two, because much of the world does not have the abundance of oil that Texas has, or the high-tech magic that Silicon Valley has. So it has to rely on its people.
MY TAKE: Kings rule kingdoms. Emperors rule kings. If you want to grow beyond your capacity to oversee and rule on a daily or frequent basis, you need to know how to build leaders under you. If you don’t, you will be stuck in the cowboy style, where your kingdom will be limited to what you can manage, or the VC-style, which is capital-intensive.
This article was written by Dileep Rao from Forbes and was legally licensed through the NewsCred publisher network.