Chamath Palihapitiya grew up poor, became a billionaire, but found it wasn’t enough.

As a VC, he is building the kind of real legacy he wants by investing in companies like Glooko, a mobile diabetes management company, and Treehouse, a company that trains computer engineers and helps them find jobs.

Compare his attitude to billionaire Vinod Khosla, who blocked access to a previously public beach and now is ignoring a judge’s order to return public access.

Khosla’s actions even spurred passage of a new law that can use eminent domain to force a sale of the property.

Perhaps it’s time to follow an old Roman custom that was used to keep victorious generals’ egos in check; they were required to have a person in their victory chariot who kept repeating “Remember, you are not a god.”

It’s definitely time to rewrite the adage, “money is root of all evil” to a more accurate “ego is the root of all evil.”

Flickr image credit: Jason Eppink

How much money are you trying to raise?

Are you more focused on funding or on growing your business?

Do you read about huge valuations and the resulting funding and find yourself green with envy?

According to Ron Conway, founder of SV Angel, …it’s always good to bootstrap for as long as possible, meaning it’s better to not take money from a venture capitalist or angel investor; startups should strive to be self-sustaining at first.

When fundraising it’s important to know what you really need as opposed to what you can get.

Ego trips, too, play a role in fundraising. After all, think of the bragging rights and the media frenzy that come with large investments.

But raising funds means giving up equity as Xenios Thrasyvoulou, founder of PeoplePerHour.com and SuperTasker.com in London and New York, learned the hard way.

…venture capitalists expected his company to grow five times in 12 months. Though he viewed his firm as having a healthy, sustainable growth rate, it didn’t meet those expectations, and he was forced to hire an expensive and large management team. Eventually, Thrasyvoulou regained control of his company, but he reminds other entrepreneurs that “sanity is more important than vanity.”

Of primary importance for all founders is to remember that what goes up always comes down—especially the economy.

That means not just careful fundraising, but careful spending; it’s far smarter to bank the money than to spend it on plush startup living.

Read the article and learn from those who can say, been there/done that. It’s not the same as listening to them on-stage, but it’s a lot less expensive.

Flickr image credit: Howard Lake

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

A couple of weeks ago we took a look at Jim Heskett’s HBS discussion about why servant leadership isn’t very prevalent, considering how effective it is; this week he sums those reasons up.

Servant leadership is experienced so rarely because of trends in the leadership environment, the scarcity of human qualities required, demands that the practice places on the practitioner, and the very nature of the practice itself.

It’s easy to spot the major traits that get in the way.

“Ego (that) makes it difficult to ‘want to serve'” (Randy Hoekstra), “greed” (Madeleine York), and “An unhealthy desire to control” (Judesther Marc).

There is more; ake a moment and read the summation, it’s short.

Next look at yourself in light of the expressed reasons preventing the spread of servant leadership.

Then look at your company’s culture and how well that culture fosters and recognizes those who practice servant leadership.

Now fix yourself, so you can become a model of servant leadership, and then fix whatever needs fixing in your culture so that that kind of leadership will naturally rise to the top of your organization.

A few thousand years ago a gentleman named Lao Tzu said it all quite elegantly in just 45 words.

As for the best leaders,
the people do not notice their existence.
The next best,
the people honor and praise.
The next, the people fear;
and the next, the people hate—
When the best leader’s work is done,
the people say, “We did it ourselves!”

I can’t think of a better mantra to build your management around.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here

Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School is my favorite brain at HBS Working Knowledge (if you don’t already subscribe, you should).

His postings are designed to stimulate discussion from a diverse and intelligent audience.

Most recently he asked why, since “servant leadership” has proved to be highly productive and valuable to both the organization and the person practicing it, it wasn’t seen more frequently.

(Many people like to infuse “servant leadership” with a religious theme, but that isn’t its source.)

Although Heskett was focused on CEOs, the conversation applies to everybody in a so-called leadership position, i.e., bosses.

Reading through some of the 116 comments, number 11, from Phillip Clark, Clark & Associates, caught my eye—probably because it perfectly summed up my own crotchety thoughts; he even ends his comment with one of my favorite lines.

Rather than write my own version, I thought I’d share his in its entirety.

Ego and Stupidity to put it bluntly stands in the way of having more servant leadership in the workplace. Normally, I am not so blunt but after 50 years in the workforce I am becoming old and crotchety about this discussion.

Let’s look at the issue. The “I’m more important than you” leadership usually limits performance and innovation because everything goes through a single control point the leader. The leader has to be always informed, has to give permission, always has “the best ideas” and focuses only on performance goals that make him, not necessarily the company, look good. That creates a huge bottleneck on the performance of the leader’s employees.

A servant leader, focused on getting the most from his or her employees, empowers and trains their employees to do their job, without the “mother may I” albatross hanging around their neck. The servant leader sends the employees working on the project to meetings and links them with resources to do their job. That way the employees can do their job without having to go through the single choke point “the leader”. This type of leader is not loaded with meetings because his or her staff are doing the job. It no longer is about ego but performance. What really is an eye opener is seeing the servant leaders influence explode throughout an organization since they seem to be everywhere. When really it is their influence being expressed by their entire staff at multiple points in the organization at the same time. Bottom line…hire right, support effectively, expect performance….and you will get it.

As a leader…do not become the choke point in your organization. How can you tell? Are you going to too many meetings where you have to follow-up and pass information to others? Are you overworked with too many interruptions from employees? Are you demanding deadlines to meet goals instead of having work appear on your desk completed? Are your employees happy and getting promoted? If not, take a close look in the mirror.

Which kind of leader are you?

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

“The higher you go in life, the greater the capacity for self-delusion.” —George Mitchell

There’s a very contagious illness making the rounds and it reached pandemic proportions more than a decade ago.

To check if you have it take the simple quiz below.

In the privacy of your own mind how would you answer the following questions?

1. Are you usually the smartest person in the room?
2. Are you annoyed when someone doesn’t instantly “get it?”
3. Do you listen equally well to all your people?
4. Is your main networking criteria WIFM?
5. Did you succeed because of others?

If you answered yes, yes, no, yes, no then you’re already sick.

If you considered the answers obvious you have a serious case of what Pat Riley calls the “disease of me,” while the startup world knows it as “founder’s ego.”

It means you not only do things better than others, but also can do no wrong.

While there is no inoculation against it, there is a cure.

The cure requires changing your MAP and it’s free.

Hat tip to Wally Bock for a great reminder on how easy (and stupid) it is to buy into your own infallibility.

Image credit: HikingArtist

Every place I turn is commentary of some kind focusing on new changes for the New Year, but looking around it’s hard to believe in them.

In a recent Rules post I shared something I sincerely believe, it’s about progress, not perfection, but I haven’t seen a lot of progress lately anywhere in the world.

• 99% of politicians of all flavors rant on spouting their preferred ideology, with no real concern for the citizens of whatever country they represent.
• As we learned, too many financial CEOs were made of ego and greed and the skill to mislead, but it seems that attitude is spreading to companies of all sizes, as well as individuals, in a trickle-down effect.
• More and more people are willing to bend the rules and/or lie to achieve their ends.

While I accept that progress often involves several steps backwards to those taken forward, what’s happening is ridiculous.

Progress should mean a net positive after doing the math.

Or is that another of my out-of-date attitudes?

Flickr image credit: Kevin Dooley

I have to admit that a post by Penelope Trunk, founder of Brazen Careerist, about “why you shouldn’t do a startup with women (if you’re a man)” greatly annoyed me, but not for the reasons you might think.

I have no quibble with what Trunk wrote about her own experience, but I do object strenuously to the idea that it is universally applicable.

Wondering if it was only me, I sent the link to KG Charles-Harris, founder/CEO of EMANIO and founder of the M3 Foundation, whose co-founder at EMANIO is female, and he emailed back,

“Interesting.  I hadn’t thought of this until now.  This is my first startup and my experience is that having Julie as co-founder has made us survive.”

I also sent it to Matt Weeks, Chief Marketing & Revenue Officer, Actio.tv and who occasionally writes for the Friday entrepreneur feature If the Shoe Fits,

“Some of the best women I’ve worked with were direct, authentic, professional, and had very similar styles as the men.  The open question is– were they adapting and modeling the men in the workplace to fit-in (having observed that crying and throwing tantrums was not likely to lead to advancement)….? or were they hard-wired to have the same style and temperament as men,and that was a key to their success…?   Most female workers are not about drama or making chaos or making their female-ness a centerpiece of the workplace dynamic or culture.  In fact having diversity in a fast-moving team with a variety of perspectives has led to better insight, better strategy and better product creation in my direct experience.  Great teams are better for the diversity of perspective, not hopelessly paralyzed and unable to focus. It depends how experienced they are in managing divergent views and coalescing around a single course of action.  That said, some men with whom I have worked indulged their male-ness,and narcissism, creating their own flavor of drama and chaos. This doesn’t even begin to figure-in the gender and sexual orientation component, which could flip the equation again.  And then flip it again.”

I also looked in the mirror and had to admit that I have been know to inject drama and chaos in my interactions, but those occasions had nothing to do with my gender.

They happened at that moment because I ran out of rope and they were over almost immediately because I reached deep or out and found more rope.

Personally, I have a hard time understanding monthly mood swings since I never experienced them, nor am I particularly comfortable with prolonged exposure to highly emotional people no matter their gender or orientation.

When I was young there seemed to be fewer choices, women got upset, got emotional and cried, whereas men got upset, got drunk and hit the wall or whatever was handy—I have done both—I wonder what that makes me?

The take-away is that your MAP will dictate the amount of drama and chaos acceptable in any culture you establish or that you are willing to personally endure.

Please join me tomorrow for a look at the power and pitfalls of influence.

Flickr image credit: scriptingnews

Did you know that when Roman generals rode through the streets for their victory parade they were required to have a person in the chariot who kept repeating “Remember, you are not a god.”

Twitter, Facebook, TechCrunch, blogs and other media are the modern version of the victory parade.

What we are missing is someone to remind them, “You are not infallible; you are not a god.”

Flickr image credit: BBM Explorer

Many of the news reports and stories I read leave me with the same unanswered question, ‘why’?

Why do people with everything do such incredibly stupid things?

Why do they risk losing it all—and often do?

To paraphrase a question, what’s in it for them?

And more importantly, what can be done about it?

Bill George, Professor of Management Practice and Henry B. Arthur Fellow of Ethics at Harvard Business School wrote an article on the subject. Focused on positional leaders in a variety of circumstances it considers “Why Leaders Lose Their Way,” but his solution, while correct, is old and tired. Not to mention that he’s preaching to the choir—those who listen are on the right path already and those who should won’t.

While George’s approach offers nothing new, Dave Balter, founder of BzzAgent, provides a much more compelling story that should provide a wake-up call to anyone who’s ego is on the way to, or has already gotten, out of hand.

Interestingly, there is a ‘why’ on the other side of the coin, too, but it’s one that goes unnoticed, buried in positive actions and the (well earned) praise sung by the media.

I’m referring to the actions of people such as Angelina Jolie, Bono and now, Matt Damon. If you aren’t aware of the role he’s created for himself, read about it. It surpasses by far anything else he’s taken on before.

Image credit:  MykReeve on flickr

Do you watch Shark Tank, the American equivalent of Dragons’ Den in the UK?

For those who don’t, it’s a reality show with entrepreneurs pitching investors on their companies.

Last Friday James Michell, founder of Pure Ayre, was one of the entrepreneurs.

If I had been shown just a clip of him I would have thought it was a put on.

Michell bumbled every question, giving minimum information and forcing the sharks to drag it out of him. He had burned through his seed money, but was responsible for nothing.

Several of the sharks were interested—in the product, not in Michell.

Each offered to buy the entire company as well as pay royalties, but only if he relinquished all involvement with the company.

Michell is a caricature of the entrepreneur who knows it all and can do no wrong—just ask him.

“I was incredibly insulted. They thought the only problem was me. They were making all these assumptions and they weren’t there. It was awful.”

Michell has a severe case of founder ego and it bodes ill for the friends and family that invested in the company.

The video is no longer available (at least 20 min of searching can’t find it), but see a critique here.

Flickr image credit: http://www.flickr.com/photos/75001512@N00/3369027984/