Just before the tech bubble burst, back in 2000, I worked as a developer at dotcoms. Big paydays were luring all kinds of entrepreneurs into tech then, including people who had no prior experience. The company I worked at was run by someone who had a big vision, but knew almost nothing about programming or the web.
A typical request to my team would be something like, “Build me the next Yahoo…and have it done by tomorrow!” We took on unrealistic projects, missed deadlines and left customers disappointed. Needless to say, the company tanked. (Silver lining: in the ensuing fire sale, I ended up buying a bunch of their computers, which I used to launch the agency that ultimately created Hootsuite.)
The lesson I learned from that brief experience was priceless: for founders, domain expertise — specialized understanding and fluency in a specific field — is a key prerequisite to startup success. This sounds dead obvious. But it’s far too often overlooked. Just being a good leader or a having general business savvy isn’t enough. Entrepreneurs (successful ones, at least) really have to know their stuff.
As a business grows, the initial domain expertise of its founder becomes less critical, while generalist skills get more important.
A growing body of research backs this up. According to a new Harvard Business Review analysis, “the best leaders know a lot about the domain in which they are leading, and part of what makes them successful in a management role is technical competence.” A newly published study of hundreds of companies showed the startups most likely to succeed have technical founders who quickly hire business people.
This flies in the face of some conventional wisdom, which says a good founder can just hire his or her way out of a technical skill gap. But when you start to unpack this assumption, this theory falls apart. For starters, it’s very challenging to hire for technical roles if you don’t have the expertise to assess candidates. I knew my way around PHP and MySQL back in the day, and that let me quickly vet developers at a critical stage as Hootsuite was just getting off the ground.
Even if you do get the right technical team in the door, it’s exceedingly hard to motivate and lead them in the absence of any domain expertise. A comprehensive study of 35,000 people found that employees are “far happier when they are led by people with deep expertise in the core activity of the business.” I was able to guide and inspire my initial team of developers as we built Hootsuite precisely because I had been in their shoes.
The best founders supplement this generalist toolkit with actual specialists, sooner rather than later. They’re realistic about their business weaknesses and hire aggressively to fill gaps.
To be clear, I was never an ace programmer. But I knew enough to be dangerous — to engage credibly with employees and with clients. It’s not hard to find examples of other entrepreneurs who have made use of the same kind of subject-matter edge. Elon Musk studied applied physics before he turned his attention to SpaceX and Tesla. Steve Jobs’ real passion for design informed everything from the Apple II to the iPhone. Mark Benioff’s experience in sales helped Salesforce become an industry leader in enterprise software. None of these founders were cutting-edge technical gurus, but they were able to talk the talk and walk the walk.
Alone, of course, technical expertise isn’t enough. The best founders are also capable business generalists (No one said being an entrepreneur was easy.) They may not be experts in sales or marketing or customer service, but they know how to motivate, think strategically, and delegate. The catch is that, unlike subject-specific skills, this generalist toolkit is easier to learn as you go. The opposite, however, is rarely true.
Importantly, the best founders supplement this generalist toolkit with actual specialists, sooner rather than later. They’re realistic about their business weaknesses and hire aggressively to fill gaps. Hootsuite was still a modest team with what had been a zero-revenue product when I went out and found our first CRO and a director of business development. These were areas where my knowledge was skin deep. Bringing in the right people made all the difference, proving Steve Jobs’ maxim: “When you’re in a startup, the first 10 people will determine whether the company succeeds or not.”
It’s worth pointing out that, as a business grows, the initial domain expertise of its founder becomes less critical, while those generalist skills get more important. In fact, clinging too heavily to your “technical core” can actually be self-limiting. I saw this firsthand as we expanded from seven to nearly 1,000 employees. I couldn’t afford to “just” be a developer. I had to seriously up my game as a leader: planning, motivating, communicating, delegating, and identifying talent. These days, it’s safe to say that my coding is pretty rusty. But I’m confident that my business wouldn’t be here if I hadn’t learned a little PHP in the first place.
This post was syndicated with permission from Ryan Holmes’ Medium account.