Steve Jobs was one of the greatest entrepreneurs of the last 100 years – and one of the happiest. His biggest mistake could have destroyed Apple. Luckily for him, he got a second chance.
Jobs’s biggest mistake was not pushing for control when he co-founded Apple. Maybe:
· He had no choice in the beginning and was willing to risk being fired from Apple.
· He wasn’t financially smart and didn’t know how to launch Apple while in control – as Walton, Gates, Dell, Bloomberg, Bezos, Zuckerberg and 94% of unicorn entrepreneurs did with their businesses.
He didn’t mind losing control because he didn’t expect anyone to fire him.
Jobs lost control because he chose the wrong business path, the one used to start and build the company, and was fired from the company he co-founded. The #1 lesson for you is to choose the right business path for your venture. Unlike Jobs, you may not get a second chance.
What is the right business path for your company – and for you? How can you find it? These are questions every entrepreneur should ask themselves.
Business Tracks for Unicorn Entrepreneurship
The 4 business tracks include:
· Track for small and medium-sized businesses (SMEs).: Most entrepreneurs fail or build small to medium businesses. These businesses can be built on existing trends or emerging trends. They are on the edge of the trend and are not the central players dominating the industry. The question for small business owners is whether they can build a unicorn – if they want to – by using the right strategy and skills. VCs are not normally interested in small-goal ventures.
· Product based unicorn job: In the sample of $85 billion entrepreneurs I financed, interviewed, or analyzed, 1% built product-based unicorns (The truth about VC). VCs are early backers in these ventures and these product-based unicorns are led by professional CEOs hired by the VCs. This number is based on a product whose potential is already apparent before the company is launched. Such products are mainly in the biotechnology and medical device industries. For example, a proven cure for cancer can attract funding to become a unicorn. Genentech followed this strategy by using VC after the technology was proven.
· Strategy based unicorn track: 5% of sampled multibillion dollar entrepreneurs were unicorn startups, where entrepreneurs launch the venture and prove the strategy’s unicorn potential before seeking VC. The VCs replace the entrepreneur with a professional CEO because the entrepreneur lacks proven leadership skills. This track requires entrepreneurs to have startup skills to develop and prove the unicorn strategy. Entrepreneurs like Pierre Omidyar (eBay) and Jobs I (when Steve Jobs co-founded Apple and was fired) fit into this category.
· Skill-based unicorn with entrepreneurs in control: These unicorns were started by billion dollar entrepreneurs and built by them – the founding entrepreneurs kept control of the venture. 18% used late VC after Leadership Aha and stayed on as CEO. 76% built their unicorn with no VC, stayed as CEO, reduced dilution and kept more of the wealth they created. VC slowing billionaire entrepreneurs include Bill Gates and Jeff Bezos. VC-avoiding UEs include Sam Walton, Michael Dell, and Michael Bloomberg.
Jobs was extremely lucky that none of the Apple CEOs between his departure from Apple and his return, he knew what to do with Apple. And when Apple was about to go bankrupt, the board asked him to return. And he went on to build one of the world’s largest companies with the iPod, the iPhone, and the iPad.
MY TAKE: You may not be as lucky as Jobs. Without financial savvy skills, your potential unicorn may not get built, or be taken over by the VCs and CEO they hire and may never become a unicorn – 94% of billion dollar entrepreneurs retained control compared to 6% who were replaced by professional CEOs. You keep very little of the wealth created by your business because you are diluted by the VCs and the CEO. Unicorn entrepreneurs who were removed as CEO kept a smaller share of the wealth created than VC-Delayers and VC-Avoiders. Learn to grow and stay in control, as 94% of Unicorn entrepreneurs did.