Steve Jobs was one of the greatest entrepreneurs of the past 100 years – and one of the luckiest. His biggest mistake could have destroyed Apple. Luckily for him, he got a second chance.
Jobs’ biggest mistake was not insisting on control when he co-founded Apple. Maybe:
· He had no choice at first and was ready to risk being fired from Apple.
· He wasn’t financially smart and didn’t know how to launch Apple while still being in control – like Walton, Gates, Dell, Bloomberg, Bezos, Zuckerberg and 94% of unicorn entrepreneurs have done 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, which is the path used to start and build the company and was fired from the company he co-founded. Lesson #1 for you is choosing the right business path for your business. Unlike jobs, you may not get a second chance.
What is the right business path for your business – and for you? How can you find it? These are questions every entrepreneur should ask themselves.
Business Tracks for Unicorn-Entrepreneurship
The 4 business lines include:
· Small and Medium Enterprises (SME) course: Most entrepreneurs either fail or start small and medium-sized businesses. These businesses can be built on existing trends or on emerging trends. They are on the fringes of the trend and are not the central players dominating the industry. The question for small business entrepreneurs is whether they can build a unicorn – if they choose – using the right strategy and skills. VCs are not normally interested in companies with small goals.
· Product Based Unicorn Track: In the sample of 85 billion-dollar entrepreneurs I funded, interviewed, or analyzed, 1% built product-based unicorns (The Truth About VC). VCs are the primary financiers of these companies and these product-based unicorns are led by professional CEOs hired by VCs. This track is based on a product whose potential is obvious even before the launch of the adventure. These products are primarily intended for the biotechnology and medical device industries. For example, a proven cancer cure 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 billion-dollar entrepreneurs in the sample were unicorn builders, where entrepreneurs launch the business and prove the unicorn potential of the strategy before seeking venture capital. VCs replace the entrepreneur with a professional CEO because the entrepreneur has no proven track record of leadership. 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-created Apple and was fired) fall into this category.
· Skill-based unicorn with contractors in control: These unicorns are started by billionaire entrepreneurs and built by them – the founding entrepreneurs have kept control of the company. 18% used late VC after Leadership Aha and remained as CEO. 76% built their unicorn without a VC, remained CEO, reduced dilution, and retained more of the wealth they created. Billion-dollar entrepreneurs holding off venture capital include Bill Gates and Jeff Bezos. EUs avoiding VCs include Sam Walton, Michael Dell, and Michael Bloomberg.
Jobs was extremely lucky that none of Apple’s CEOs between leaving Apple and returning knew what to do with Apple. And when Apple was about to fail, the board asked him to come back. And he went on to build one of the biggest companies in the world with the iPod, iPhone and iPad.
MY OPINION: You may not be as lucky as Jobs. Without smart financial skills, your potential unicorn may not be built, or it may be taken over by VCs and the CEO they hire and may never become a unicorn – 94% of billion-dollar entrepreneurs kept the control versus 6% who have been replaced by professional CEOs. You will keep very little of the wealth created by your company because you will be diluted by the VCs and the CEO. Unicorn entrepreneurs who were removed from their CEO positions retained a smaller share of the wealth created than VC-Delayers and VC-Avoiders. Learn to grow and stay in control like 94% of Unicorn-Entrepreneurs did.