Did you know there are different types of founders? Do you know what type you are? Did you know that there are different strategies for each type of founder? Where many founders get it wrong is they fail to recognize these differences.
When they read an article about some overnight success or some clever strategy that worked for another founder-now-billionaire, they jump to that strategy.
But this just doesn’t work because it fails to account for the type of founder you are, and you’ve got a ⅔ chance that the strategy won’t work for you the way it worked for them (if indeed it did work for them, but that’s a whole different matter).
What do you mean by “type” of founder?
In his book, Do Scale, Les McKeown identifies the three types of founders, each with their own unique mode of building a company: growing, flipping, or scaling. Understanding these three types and identifying your type will save you a ton of grief as you decide how to build your business and when to exit that business.
It is crucially important to know your type, understand your strengths, and acknowledge your weaknesses. Only then can you choose those strategies that align with your skills and mitigate the impact of your weaknesses.
The three types of founders (and business/nonprofit leaders) are growers, flippers, and scalers.
These founders set out to build a business organically. They are often more tortoise than hair in their strategy (though this is no reflection of their daily drive or working speed). They set out to build a great business for the long run. Company size is of secondary concern. They are out to build something they are proud of. They hire people they know, trust, and want to work with. They can be loyal to a fault.
McKeown likens this type of founder to someone who is building their family home.
A great example of this type is your local coffee shop owner. They love their coffee, they love their community, and they are perfectly content to keep it that way.
Growers focus on the homeliness of the business. They pay attention to every detail, ensuring that it reflects who they are as a person. They have personal relationships with all the key clients (or regulars). They have a long-term focus on improving and enjoying what they have.
Growers are great at building lasting relationships and lovely businesses. Still, they are not intuitively good at recognizing a deal and flipping it, nor are they great at systematization or letting go of control (especially concerning decision-making).
So when a grower sees a strategy being used by a flipper and attempt to use it, they will quickly find themselves over their heads. Don’t believe me, watch one hour of basically any show on HGTV, and you’ll get exactly what I mean.
If they try to transform their coffee shop into the next Starbucks, they are likely to hate what it means to lead an organization at that level. This is why you see many small chain restaurants (or other local businesses) start to fail at the third or fourth location.
These founders are opportunists. Their passion comes from seeing and seizing opportunities. They are quick to get in and quick to get out and thrive on variety.
McKeown likens them to the investors who spot distressed properties, tidy them up, and sell them quickly for a profit.
A great example of this type is Gary Vaynerchuk. He has said getting a great spread on a baseball card deal is just as exciting to him as getting paid six-figures for a speaking gig, if not more.
Flippers focus on the spread. They look for arbitrage and try to find what looks worse than it is and can be sold for more (even for more than it is worth). They have a short-term focus on improving the desirability of what they have.
Flippers are great at spotting opportunities outside of their current work. Still, they can struggle and even fight against continuing to cultivate what they already have or slow down long enough to build the support structures needed for scale.
If a flipper succumbs to the pressure to settle down or gets a deal wrong and chooses to try out a safer strategy, they are likely to struggle. It’s just not in their DNA to grow a business. They’ll be clawing at the door on day two.
The harder pill for a flipper to swallow is that they are typically better off exiting early. This can be hard if you see the businesses repeatedly go onto greater success after you’ve sold. But the truth is, they likely succeeded after you because a scaler bought them.
While everyone talks about scaling, it has been my experience that very few founders really do it. I love McKeown’s definition of what it means to scale:
“Scalability is the ability over time to sustainably grow your organization to whatever size your industry or sector will allow, in whichever market segment(s) you choose to engage.”
I have found that some founders are actually wired this way. We tend not to see them because they start their business quietly. And rather than celebrating themselves in the spotlight, you will find them hard at work behind the scenes building a lasting enterprise they hope will outlive them.
In continuing his use of property analogies, McKeown likens “scalers” to a developer who acquires or builds an entire block of houses.
Scalers focus on value. They look for ways to build a lasting enterprise that outgrow them while they are alive and outlast them once they’re gone. They are visionaries, builders, and systematizers, all wrapped up in one.
Scalers are excellent builders. They can see and coordinate all the moving parts in the most complex of organizations. However, they can miss the trees for the forest and can struggle to execute opportunistically, and may get bored or lose focus when spending too much time at the front line.
Scalers have a lot going for them in the business world, but that doesn’t mean that every strategy will work for them. They will likely find it more difficult than their grower or flipper friends to get new businesses off the ground. They will struggle to function as opportunistically as a flipper or to create the natural charm inside and outside a grower’s company.
They will, however, win just about every time they play the game by their rules. When they stay focused and stay strategic, they really can sustainably grow their organization to whatever size their industry or sector will allow, in whichever market segment(s) they choose to engage.
How do you apply this to your situation?
First, take a moment to examine what type of founder you are. And be honest with yourself because it may very well not be the type of founder you want to be. You can develop your abilities in other types, but that will always be accomplished best by focusing first on achieving success in your natural type. Only then can you start to branch out into other strategies.
- If you are a grower, you will make your most significant and lasting impact when you focus on building a business you love and loving the people you do it with and for.
- If you are a flipper, you will make your most significant and lasting impact when you spot opportunities and turn them around quickly, leaving each project exceedingly better than you found it.
- If you are a scaler, you will make your most significant and lasting impact when you take your time and focus on building a bigger, better business from the foundation up to the top floor.
By now, I’d imagine you have a pretty good handle on your type and how well you are playing to your strengths. If you’d like someone to come alongside you and help you unlock your potential and create greater success for you, your team, and your business, give me a call. I would be honored to help!
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