I heard myself say this yesterday at a Board meeting. It sounded kind of silly coming out of my mouth, but after thinking about it, I thought I'd expand a bit on it.
The hardest job in management is the "first time CEO". I have absolutely no data on this, but I suspect that at least 75% of first time CEO's fail at some level. Many get fired. Many go down with the ship when it sinks. Some quit. Many sell their businesses before they've realized their full potential because they just can't figure out how to do the job right.
But in venture capitalism, among the most pure forms of capitalism there is, failure isn't all bad. Because, as i said yesterday, "you are only a first time CEO once". Most talented business people come up the learning curve quickly. And the next time, they don't make the same mistakes. They move faster. They listen better. They spend less. They hire better. The list goes on and on.
So, what does this mean for VCs? It means back serial entrpreneurs who have done it before. But if you can't do that, and are backing a first time CEO, recognize the risks of that. Mentor, coach, and pay a lot more attention.
What does this mean for entrepreneurs and managers? It means that the first time you run a business, you should admit what you are up against. Don't let ego get in the way. Ask for help from your board and get coaching and mentoring. And recognize that you may fail at some level. And don't let the fear of failure get in the way. Because failure isn't fatal. It may well be a required rite of passage.