Another winner, Chris. But I would add one thing. Sometimes (not always) you need an equivalent visionary to spot and invest in an entrepreneur's idea. Not all businesses can be grown organically, like Microsoft.
From my limited experience (at least in Europe) investors frequently don't have this vision. They require forms of external validation, instead of trusting their gut.
If Steve Jobs were an investor, I swear I would camp outside his office until he let me in.
chris dixon
· 2 months ago
Good point. Mike Moritz is probably one of those visionary investors.
ShanaC
· 2 months ago
Next question. How do you identify visionaries? What makes someone visionary when you first meet them at a young age. I mean, Steve Jobs had dropped out and had been learning typesetting before starting Apple. It doesn't scream "Visionary" at the time.
chris dixon
· 2 months ago
I wish I knew. Its obviously much easier after the fact.
Mark Essel
· 2 months ago
I get the feeling being a super entrepreneur is more than just destiny. I believe it's related to a combination of character traits of which ultra marathoners exhibit one (near malevolent will).
Anyone who has the capability of datamining, pattern matching, or following a gutt instinct to these ladies and gents is likely to find themselves with a large pile of cash. Good hunting as an Angel investor and entrepreneur!
rickburnes
· 2 months ago
Chris, nice post on a great topic.
I don't see the distinction you draw so starkly. I agree that the change in value of MSFT, Apple & Sony is attributable to the departure of great leaders. But I also wonder if these leaders would have been great in different times.
Would Bill Gates be able to do similarly remarkable work if he was starting today instead of 40 years ago? The world has changed and a different set of skills is required.
Maybe he would have adapted. Maybe not.
chris dixon
· 2 months ago
Perhaps you are right. Being great is a necessary but no sufficient condition for Gates-level success.
Mike Mazya
· 2 months ago
I highly suggest reading the book outliers by Malcom Gladwell to get a very interesting counterpoint to this arguement, as there are lengthy pieces on both Bill Gates and Steve Jobs. The conclusion is that these extremely talented and gifted men had everything it takes to be great, but it was their circumstances that made them "ubermenchen." The lucky breaks that they had, and the circumstances surrounding their rise are certainly not everything, but they are most of it.
chris dixon
· 2 months ago
I read it. Like all Gladwell's books, enjoyed it very much. Great anecdotes. But totally disagree with the thesis and thought it was very poorly argued.
Of course Jobs and Gates got lucky breaks. But to have the kind of success they've had for such a long time, you need to be great also.
FictiveCameron
· 2 months ago
Interesting post.
I assume then that you would characterize either Caterina or yourself as a "super(wo)man"? How does that play out in your partnership?
The notion of supermen being the most important piece of a company's long-term greatness doesn't have great implications for the potential of acquired startups. Best case scenario they get folded into the plans of a different superman or much more commonly stagnate as the founders leave.
chris dixon
· 2 months ago
Well, I'm certainly not saying I'm superman.
Your point about startups is a good one. It's why so many acquisitions fail.
jonathanmarcus
· 2 months ago
As an ardent Collins framework supporter and practitioner, it pains me to agree with your post. Fannie and CC are indeed huge black eyes for the model.
John Malone, Larry Ellison, Michael Dell and Jeff Bezos are some other ubermen that come to mind. All of their companies outperformed the indexes for decade long periods, and its almost impossible to detach them from their companies success.
chris dixon
· 2 months ago
Totally agree. I used to believe in Collins' thesis too.
Robin
· 2 months ago
This feels like selection bias to me. I think it would be interesting to take, say, the 100 biggest companies in the world (or the 100 most admired, or the 100 fastest-growing) and then ask, for each one: Can I identify a super-leader, a charismatic genius? Or is credit more diffuse?
There's selection bias on another level. You focus on Akio's support for the Walkman. But did his gut ever lead him to support a product that totally tanked -- that cost Sony millions, even billions? I'll bet it did. Ditto Jobs, who's been a supporter of many nonstarters. They don't always get it right.
If anything, what allows organizations to defy the cycle of rise and fall that you describe seems to be the capacity to SURVIVE mistakes, or better yet, learn from them -- and I, for one, am skeptical of the claim that this capacity depends on a single person.
jonathanmarcus
· 2 months ago
Jim Collins' team has already done the exhaustive research you are suggesting Robin. Much of their methodology focused on isolating and removing all selection bias.
chris dixon
· 2 months ago
Sure they've had failures. Betamax and Lisa come to mind. But on average they have incredible track records. I think the big question for, say, Google, is whether they can have a second act and whether they have such a "great person" (or 2?) who can figure it out.
angusdavis
· 2 months ago
Pretty sure Google has more than a single act...
1) Search = $14 billion/year in US 2) AdSense (for publishers, not search ads) = ~$7 billion/year in US 3) Google Maps (as yet not monetized at high levels, but completely crushed what was at the time a market leader in mapquest)
Another question on Google would be, let's say they do become a 5-trick pony some day, who is the superman? Larry? Eric? Marissa?
chris dixon
· 2 months ago
I'd argue AdSense is a (clever) extension to search business. Not clear if Maps is going to be a big business.
Yes, I wonder the same thing about who (if anyone) it might be.
William Mougayar
· 2 months ago
But a great leader should leave behind them a great company. A company's culture is its most sustainable value. I'm not sure that MS' value would be different if BG was still running it. Steve Ballmer also had a hand in MS' rise, so it's not telling to just dissociate the 2 periods as such.
chris dixon
· 2 months ago
I guess I'm arguing against that view. I think the culture only lasts for so long after you lose a great leader.
William Mougayar
· 2 months ago
I think I understood that, but was trying to say that it shouldn't be that way. The mark of a great leader should be the legacy they leave behind them, in a permanent way. When I worked at HP from 82-95, the HP Way was thriving although the 2 founders were not involved.
rdeichert
· 2 months ago
Chris - I think maybe you're equating grand slams with great. There are many great companies that haven't had extraordinary success like Apple or Sony. Not everyone is going to be Google or go out of business.
I would check out his new book, How the Mighty Fall, he addresses some of your concerns.
Bottom line, many of Jim Collin's principles are critical, but are enhanced if a company has an amazing visionary leader.
Ben Atlas
· 2 months ago
There is implication in this post and some of the comments that greatness is sort of a genetic condition. Therefore you should be able to spot it, or ponder how greatness will interact win a new set of circumstances. Instead I lean toward the "black swan" view of the anomalies. They are an unpredictable convergence of many factors. And in fact I would argue that most of these factors are like waves that lift great people up to the historic podium. Not the other way around.
chris dixon
· 2 months ago
I think you can spot great talent, but not these very special people. I agree you also need a wave. I think genius is a necessary but not sufficient condition for greatness.
Ben Atlas
· 2 months ago
I have seen many geniuses. You can spot them with ease. But the skill you are referring to is the skill of translating ideas into actual innovations. That talent is very hard to spot, virtually impossible.
Tyler Willis
· 2 months ago
It sounds like something Marc Andreessen wrote awhile back about picking investments based on market forces instead of the ability of the entrepreneur or the soundness of the idea.
If I remember correctly, basically the latter two were binary "good-enough" type rankings and the market opportunity was what drove his investment decisions.
Could be remembering that wrong, but his blog has been taken down so I can't check it.
Mark Essel
· 2 months ago
Is it magical, genetic, or some act of will beyond our comprehension that makes these super leaders tic?
chris dixon
· 2 months ago
all of the above?
Donald Livingston
· 2 months ago
I agree. There is a saying attributed to Pasteur, "Fortune favors the prepared mind." There is little doubt that Gates and Jobs had favorable circumstances, but hard work, wit, and intelligence are needed to take advantage when fortune smiles on you.
randfish
· 2 months ago
Chris - long time reader, first time commenter :-)
How do you think about this principle as it applies to the many small and mid-size "successful" businesses in the technology and startup world. Did Mint.com/Farecast/SurveyMonkey/Flickr have semi-Supermen? Is the concept that all businesses need this superman at the top to achieve success or that the ratio of "super-ness" is in proportion to the business' achievements? Or is this principle only ascribed to the very top of the top - where billion dollar companies are changing the world?
chris dixon
· 2 months ago
Hey Rand - Good question. My intution says that at a minimum someone needs to do more than one great thing to show their superness. What is so amazing about, say, Steve Jobs is he really had huge, separate hits multiple times (Apple 2, Mac, iPod, iPhone).
Very cool to see you here - I've been an avid reader of SEOMoz for years.
randfish
· 2 months ago
Thanks for the kind words!
I agree that to show the "super-ness" you're describing takes multiple remarkable acts. I guess my question is - does the degree or quantity of "super-ness" relate proportionally to the company's growth + ability? Do the two metrics scale together?
chris dixon
· 2 months ago
Hmm, not sure. Seems like there is some correlation but not 1 to 1.
jasoncrawford
· 2 months ago
In *Built to Last*, Collins and Porras studied companies that had had sustained performance over multiple generations of leaders. So they can't have been the product of a single leader. In contrast, some of the companies in their control group did start off with a single charismatic leader, who had no succession plan. Those companies didn't do as well. See, e.g., their discussion of Motorola vs. Zenith.
The article you linked to, about Collins' "portfolio", is not talking about *Built to Last*, but actually about *Good to Great*. Those companies all did outperform the market for a sustained period, but I don't think Collins ever claimed that they had all put in place the "Built to Last" measures that would keep that performance going for generations.
erangalp
· 2 months ago
Collins does allude to those "supermen" in his book. His theory is that when those "supermen" step down from their role, the company is not able to maintain its excellence for a lack of sustained company culture. Companies headed by "supermen" become too dependent on the outstanding abilities of one person, and develop no lasting culture, as you've demonstrated with the Bill Gates case.
I thought collins' analysis was very interesting. The companies he calls "great" are those that show sustained success compared to the market median over a long period of time (25 years), outliving short periods of any specific genius leader. Only time will tell if Apple can become great over such a long period, or will it descend back to mediocrity after Jobs steps down.
Kishore
· 2 months ago
Though it seems a little counter intuitive, we do observe that countries have done well in democracy and companies under a dictator.
Companies that stood for a single vision got somewhere and the ones that took decisions democratically based on multiple visions more often got nowhere. I strongly believe in the roles such leaders have in building great companies.
I am not sure whether Gates or any others can do it again, but the second coming of Steve Jobs does make him extra special.
antrod
· 2 months ago
This is a great piece, but in the case of both SJ and Morita, there is another component Chris— the founder power they have in the company that comes from the fact that they were the guys who gave the initial vision. I once heard SJ talking to a group of us at the D conference basically say as much— when he came back to Apple and started canceling projects left and right, most of the old guard (who has now become critical to the company's rebirth) went along with it because he was SJ and not some "suit" who had no idea how much blood, sweat, and tears had gone into what he was canceling.
Even at HP, the mention of Bill&Dave and the time that they came back out of retirement to fix the company carries with it a level of respect (and frankly latitude) that no one else has gotten since.
That said, I completely agree that most of us are too uncomfortable to admit that there are leaders and visionaries who are just that much better than the rest of us mortals.
chris dixon
· 2 months ago
True, being founders gives them a lot of respect, but I think there are other ways to gain respect. Jach Welch seemed to be respected among the troops even though he wasn't a founder.
antrod
· 2 months ago
Same with Mark Hurd but in both cases, these are great incremental managers. You don't get the kind of wealth creation from the work that they do, say relative to a Jobs or a Morita. It takes all kinds.
Ankesh Kothari
· 2 months ago
Very interesting post and comments!
Can't think of any company that has had successes after successes with different leaders at the helm. Maybe GE comes closest.
But maybe the lessons can be learnt from religion. The successful religions were started by 1 superman - but they built inherent momentum which makes them grow bigger and bigger - no matter who becomes the chief of the entire religion in the future. In fact, they grow despite the leaders. The Pope is no longer influential in growing Christianity. Who knows who is the chief of Buddhism? (except Tibetan Buddhism who has the Dalai Lamas.) Same for Islam? Hinduism? But these religions keep on growing...
So... just thinking out loud here... 1. The product has to become way bigger than the superman. 2. There has to be inherent momentum. 3. The solution has to be unchanging more-or-less over long periods of time.
I think point 3 is where companies suffer and religions don't - in having longevity after the superman. 10 commandments will never change... People will always have this curiousness about what purpose we serve - and no scientific answer seems to be forthcoming - so religions fulfill a psychological purpose and don't really need to change much to keep on fulfilling this purpose.
But the environment the company is in is bound to change drastically as technological innovation becomes faster and faster. Companies have to adapt constantly to keep on fulfilling their purpose. So how can you find evergreen solutions in ever growing fields?
theflyingchange
· 2 months ago
Given that most of us aren't at the Jobs or Gates level, is there a prescription implicit in the post?
chris dixon
· 2 months ago
Not really. Maybe has implications for public stock market investing. And if you can find/partner with a person like that.
meanlittlechimp
· 2 months ago
Chris,
I agree with your superman theory for the most part, but I don't think Jobs or Gates would have necessarily accomplished what they did, if they were born 30 years earlier.
My hunch, is there are many other talented (non-actualized "supermen"); who could have developed into one with slightly different circumstances or environments.
Mark Essel
· 1 month ago
Loved this post the first time I read it 10/10 for your third popular post. It's related to my current investment strategy, only partner or buy into businesses where you know and trust the leadership team.
chris dixon
· 1 month ago
thanks mark! for this and all your comments...
Mark Essel
· 1 month ago
Anytime Chris. You can see I love batch processing information :D
All Comments
From my limited experience (at least in Europe) investors frequently don't have this vision. They require forms of external validation, instead of trusting their gut.
If Steve Jobs were an investor, I swear I would camp outside his office until he let me in.
Anyone who has the capability of datamining, pattern matching, or following a gutt instinct to these ladies and gents is likely to find themselves with a large pile of cash. Good hunting as an Angel investor and entrepreneur!
I don't see the distinction you draw so starkly. I agree that the change in value of MSFT, Apple & Sony is attributable to the departure of great leaders. But I also wonder if these leaders would have been great in different times.
Would Bill Gates be able to do similarly remarkable work if he was starting today instead of 40 years ago? The world has changed and a different set of skills is required.
Maybe he would have adapted. Maybe not.
Of course Jobs and Gates got lucky breaks. But to have the kind of success they've had for such a long time, you need to be great also.
I assume then that you would characterize either Caterina or yourself as a "super(wo)man"? How does that play out in your partnership?
The notion of supermen being the most important piece of a company's long-term greatness doesn't have great implications for the potential of acquired startups. Best case scenario they get folded into the plans of a different superman or much more commonly stagnate as the founders leave.
Your point about startups is a good one. It's why so many acquisitions fail.
John Malone, Larry Ellison, Michael Dell and Jeff Bezos are some other ubermen that come to mind. All of their companies outperformed the indexes for decade long periods, and its almost impossible to detach them from their companies success.
There's selection bias on another level. You focus on Akio's support for the Walkman. But did his gut ever lead him to support a product that totally tanked -- that cost Sony millions, even billions? I'll bet it did. Ditto Jobs, who's been a supporter of many nonstarters. They don't always get it right.
If anything, what allows organizations to defy the cycle of rise and fall that you describe seems to be the capacity to SURVIVE mistakes, or better yet, learn from them -- and I, for one, am skeptical of the claim that this capacity depends on a single person.
1) Search = $14 billion/year in US
2) AdSense (for publishers, not search ads) = ~$7 billion/year in US
3) Google Maps (as yet not monetized at high levels, but completely crushed what was at the time a market leader in mapquest)
Another question on Google would be, let's say they do become a 5-trick pony some day, who is the superman? Larry? Eric? Marissa?
Yes, I wonder the same thing about who (if anyone) it might be.
I'm not sure that MS' value would be different if BG was still running it. Steve Ballmer also had a hand in MS' rise, so it's not telling to just dissociate the 2 periods as such.
that way. The mark of a great leader should be the legacy they leave
behind them, in a permanent way. When I worked at HP from 82-95, the
HP Way was thriving although the 2 founders were not involved.
I would check out his new book, How the Mighty Fall, he addresses some of your concerns.
Bottom line, many of Jim Collin's principles are critical, but are enhanced if a company has an amazing visionary leader.
If I remember correctly, basically the latter two were binary "good-enough" type rankings and the market opportunity was what drove his investment decisions.
Could be remembering that wrong, but his blog has been taken down so I can't check it.
How do you think about this principle as it applies to the many small and mid-size "successful" businesses in the technology and startup world. Did Mint.com/Farecast/SurveyMonkey/Flickr have semi-Supermen? Is the concept that all businesses need this superman at the top to achieve success or that the ratio of "super-ness" is in proportion to the business' achievements? Or is this principle only ascribed to the very top of the top - where billion dollar companies are changing the world?
Very cool to see you here - I've been an avid reader of SEOMoz for years.
I agree that to show the "super-ness" you're describing takes multiple remarkable acts. I guess my question is - does the degree or quantity of "super-ness" relate proportionally to the company's growth + ability? Do the two metrics scale together?
The article you linked to, about Collins' "portfolio", is not talking about *Built to Last*, but actually about *Good to Great*. Those companies all did outperform the market for a sustained period, but I don't think Collins ever claimed that they had all put in place the "Built to Last" measures that would keep that performance going for generations.
I thought collins' analysis was very interesting. The companies he calls "great" are those that show sustained success compared to the market median over a long period of time (25 years), outliving short periods of any specific genius leader. Only time will tell if Apple can become great over such a long period, or will it descend back to mediocrity after Jobs steps down.
Companies that stood for a single vision got somewhere and the ones that took decisions democratically based on multiple visions more often got nowhere. I strongly believe in the roles such leaders have in building great companies.
I am not sure whether Gates or any others can do it again, but the second coming of Steve Jobs does make him extra special.
Even at HP, the mention of Bill&Dave and the time that they came back out of retirement to fix the company carries with it a level of respect (and frankly latitude) that no one else has gotten since.
That said, I completely agree that most of us are too uncomfortable to admit that there are leaders and visionaries who are just that much better than the rest of us mortals.
You don't get the kind of wealth creation from the work that they do, say
relative to a Jobs or a Morita.
It takes all kinds.
Can't think of any company that has had successes after successes with different leaders at the helm. Maybe GE comes closest.
But maybe the lessons can be learnt from religion. The successful religions were started by 1 superman - but they built inherent momentum which makes them grow bigger and bigger - no matter who becomes the chief of the entire religion in the future. In fact, they grow despite the leaders. The Pope is no longer influential in growing Christianity. Who knows who is the chief of Buddhism? (except Tibetan Buddhism who has the Dalai Lamas.) Same for Islam? Hinduism? But these religions keep on growing...
So... just thinking out loud here...
1. The product has to become way bigger than the superman.
2. There has to be inherent momentum.
3. The solution has to be unchanging more-or-less over long periods of time.
I think point 3 is where companies suffer and religions don't - in having longevity after the superman. 10 commandments will never change... People will always have this curiousness about what purpose we serve - and no scientific answer seems to be forthcoming - so religions fulfill a psychological purpose and don't really need to change much to keep on fulfilling this purpose.
But the environment the company is in is bound to change drastically as technological innovation becomes faster and faster. Companies have to adapt constantly to keep on fulfilling their purpose. So how can you find evergreen solutions in ever growing fields?
I agree with your superman theory for the most part, but I don't think Jobs or Gates would have necessarily accomplished what they did, if they were born 30 years earlier.
My hunch, is there are many other talented (non-actualized "supermen"); who could have developed into one with slightly different circumstances or environments.
I read it 10/10 for your third popular post. It's related to my current investment strategy, only partner or buy into businesses where you know and trust the leadership team.