How to Start Building #6: The Evolution of an Entrepreneur

What's up, everyone. This is Alex Lieberman, co-founder and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. So you're listening to the sixth episode of our How to Start Building mini-series that is focused on how to turn your business ideas into a reality. If you're not caught up, go back and listen to the five previous episodes that are all part of the series this week. Today, I am talking about The Evolution of an Entrepreneur. This is for anyone that's building a new product or a business, either as a standalone startup or as a side project or a business within a larger company, let's hop into it.

The two chapters of entrepreneurship

If you're going to be an entrepreneur or an intrepreneur, you have signed up to be a builder. You will always be a builder, but assuming you find success, what you are building changes, and that means the skills you need to build successfully and the interests you have to stay engaged with what you're building needs to change as well. And so I generally bucket the job of the entrepreneur or the intrepreneur in two ways, or, you know, two parts of the life cycle: Chapter 1 of an entrepreneur is what I call the Doer in Chief and Chapter 2 of an entrepreneur is what I call the Delegator in Chief. What you will find when building anything, and I definitely found this in building Morning Brew, is that the skills and interests of the Doer in Chief and the Delegator in Chief are not only very different, but they're often at odds or experience tension with one another. And in order to do a good job as a Delegator in Chief, Chapter 2, you need to unlearn many of the priorities and skills that were essential for you to be successful as the Doer in Chief. For some entrepreneurs, they both enjoy and are great at evolving from Doer to Delegator and for others, they are either unable to or don't have an interest in that evolution. So now what I want to do is break down how the focus, the skills and the resources for these two very distinct mindsets are part of the entrepreneurial evolution differ and also how, you know, when you need to function in one versus the other.

Doer in Chief

There are three phases of a business that happen while you are Doer in Chief. The first phase is building the product. The second phase is building the team. And the third phase is building the culture. A Doer in Chief or the entrepreneur's first job is building a product that solves a problem and that a group of people love. Period. End of story. That is the only focus. And then the second and third phase of a Doer in Chief’s role of building the team and building the culture is simply creating the machine that is sustainable and efficient to continue to solve the problem for your passionate customer base.

In the early days of Morning Brew, I was obsessed with our product. It's all I thought about. I continue to ask myself day in and day out, how do we put out the best daily business read for our generation bar, none? And I knew it had to be so good that our readers would come to us rather than go to existing publications that had far more history and credibility. As Doer in Chief, I went from writer to editor, to quasi-editor and chief in the early years of the business. And beyond my focus on the product I spent most of my time convincing people to come work at the business, investors to put money into the business, and advertisers to spend money getting in front of our audience.

So your focus as Doer in Chief is willing your product into existence and making your product into a viable business, which is why I think the two most important skills of any early stage entrepreneur or intrepreneur who is functioning as Doer in Chief is one, being a product and customer obsessive, and two, being an exceptional storyteller. Without being obsessed with the product and your customer, you will never find product-market fit. Without being a great storyteller, you will never convince people to take a chance on you, whether that's employees, investors, or customers, and you will also never be able to repeatedly hammer home the vision and the values of the business to create this cultural foundation upon which the entire future of the company rests.

Delegator in Chief

But then something happens when you get to somewhere between 20 and 40 employees. That's when it happened for us. It really is different for every company, but there are signs that your job as founder needs to evolve from Doer in Chief to Delegator in Chief. One sign is that you feel settled that the jobs of the Doer in Chief have been accomplished. Your product has found product-market fit, meaning customers are buying the product as fast as you can make it, customers are organically telling other customers about it, and there's a feeling of momentum that you need to hire to keep up with how fast the business is moving. You've hired a core team to successfully service the product and improve it. You've established a vision and values that have allowed your team to feel like family and motivate everyone to push towards a common goal. You've effectively raised your first one or two rounds of funding that have given you enough runway to think about growing the business or expanding the product versus constantly worrying about keeping the lights on. That's the affirmative sign that it's time to evolve. There's also the sign of challenges that emerge for the first time that require your attention in a different way. There's a feeling of being on a hamster wheel, where you feel like you're in the weeds of the business, but in order to grow, your business requires you to leave the trenches and plan ahead.

Or that you've reached a point where there are, say three layers within the business, you, your direct reports, and then their direct reports. And there isn't the right process of communication. That's leading to unintended consequences within the business. 

I'll tell you how we knew it was time for the role of CEO to evolve from Doer in Chief to Delegator in Chief at Morning Brew. It was 2019. We had our daily newsletter of over 1 million subscribers. We clearly had product-market fit. We clearly had a business. We clearly had a core team to continue to grow that business. And we clearly had a culture that was motivating the core team. But our ambitions were bigger than this one product. And as we went to think about launching more products and evolve Morning Brew from a business that was a newsletter to a newsletter business or a media brand, we realized we didn't have the foresight, the planning, the process, or the personnel to make that happen. We were constantly reacting to the day-to-day of the current business versus thinking about where the business was going to go. It was clear that the role of the CEO had to evolve for the business to become a true organization. And in this new phase of the business, the Delegator in Chief had to focus on a few things. It was no longer about being in the weeds of the product or storytelling to investors. It was about delegating responsibility, so that 50% of the CEO's time could be spent thinking and strategizing, whereas in the early days, probably 5% of time was spent actually thinking. And the focus now turned to creating a long-term strategy so that we can proactively hire, bringing on a senior leadership team so that there was actually subject matter expertise in each part of the business and therefore delegation wasn't a concern, and focus on nurturing the culture and opening up channels of communication so the business could run like a well-oiled machine with everyone pointed to the same North Star. This was at the point in the business where actually my co-founder Austin, who was COO at the time, where his abilities were already way more closely aligned with the role of Delegator in Chief, given his skills and interests than mine were. Austin shepherded this transition in the business by first implementing a business operating system, which is called EOS, we found out about it in a book called Traction, and it was all about setting strategy, building a leadership team, and creating a cadence of meetings that allowed you to proactively build the business rather than react to the day-to-day of what was happening. Like I said earlier, the second phase of being an entrepreneur is being a Delegator in Chief and different from Doer in Chief, where you are focused on product, culture, and core team, your focus shifts to strategy and organization building. The skills are no longer about product or customer obsessiveness and storytelling. It's about thinking over doing, laying strategy, building and managing a leadership team, and nurturing the culture. The best way to illustrate the job of Delegator in Chief or the late-stage CEO is a quote by Steve Jobs from when he was working at Pixar. During a management meeting, Jobs said, quote, when I'm at my best, 50% of my time is unscheduled.

That's the time I used to think, drop in on the people I want to speak with and let my curiosity roam. It's my time to be creative. Without this free time, I would never be able to stay ahead of the company and to lead a company, you've always got to be two steps ahead. There's no way to lead a company from behind. Reaching the point of having a lot of unscheduled think time is probably the clearest sign of success for a phase two CEO or a Delegator in Chief. Another good way to know that you've successfully scaled into this new CEO role is based on when you find out about new products or product updates. So the CEO of Weebly, which is a web hosting service, says often the first time I find out about a product feature is reading about it in our blog. It shocks most founders to hear this, but I know I've done my job well because I've yet to see a feature that was built poorly. You should aspire to build a team that's so good, you don't have to be involved in product details. And so that is the evolution of an entrepreneur or an intrepreneur over the life of a new business, whether that be a startup or a new line of business within a larger company. As I mentioned, you never stop building. You're always building, but what changes is what you're building, the skills you need to build it, and if your interests align with the new things that you must build. You go from builder of product, to builder of team, to builder of culture, to builder strategy, to builder of organization. You go from Doer in Chief to Delegator in Chief. 

Now I'd love to hear from you. This show has grown like absolute wildfire these last few months, and we have so many new listeners. Please reach out to me and tell me a little bit about yourself and why it is that you listen to Founder’s Journal. What is the value that you get from it that makes it worth your time? Shoot me an email to alex@morningbrew.com or DM me on Twitter @businessbarista. Finally, if you enjoyed the episode, please, please, please pound the subscribe button. Whether you listen on Apple, Spotify, or another podcast player. Hitting subscribe is the best way for you to find out about new content, but also is the number one way for the show to grow. 

With that, our show is produced and engineered by Dan Bouza. Our associate producer is Bella Hutchens. Brian Henry is our executive producer. Alan Haburchak  is Morning Brew’s director of audio. Holly Van Leuven is our fact checker. And I'm your host, Alex Lieberman. Thanks again for listening, and I'll catch you next episode.