Growing a company brings new opportunities and a new set of leadership decisions, including when to take outside capital, who to bring onto the leadership team, how much control to give up and how to protect the business when an important relationship is at risk.
On the latest episode of Business Trends Today, Mark Abbott, Founder and CEO of Ninety, shares lessons from four decades as an entrepreneur, investor, board member, coach and company builder. As Ninety marks its 10th anniversary, Abbott also explains what other business owners can take from his experience.
"I'm not really worrying about what I share with people because my perspective is we're all gonna do things differently. We're gonna execute things differently."
Abbott said he isn’t particularly concerned about sharing his ideas with others. He recalled describing his software vision in detail to a fellow coach at a Miami Beach hotel. About a year later, one of that coach’s clients launched a similar product. When he asked to join the effort, the company told him it didn’t need him. That experience, Abbott said, reinforced his belief that execution matters as much as the original idea.
Although the other company remains in business, Abbott said its product and approach look nothing like Ninety.
Acquiring capital
Abbott knew Ninety would need outside capital to support its growth, but his experience serving on nearly three dozen boards made him cautious about giving up control. He told investors he would not raise money until the company reached a $100 million pre-money valuation. One venture capital firm eventually credited him with reaching that milestone about six months earlier than he had expected.
Building the business before raising capital helped Abbott negotiate from a stronger position and secure terms that aligned with his goals. His experience highlights that establishing business value before seeking investment can strengthen a founder’s negotiating position.
Hiring executives
According to Abbott, first- and second-time founders often make a hiring mistake after raising capital by bringing in experienced executives who aren’t the right fit for their stage. While these leaders aren’t necessarily bad, they may be accustomed to larger resources and less demanding work hours, and often try to impose their previous strategies. This mismatch is why many leaders at stage three companies don’t last. Founders, who usually have a strong vision for their product, often resist being sidelined in decision-making.
Additionally, Abbott notes that more founders now stay in the CEO role longer, and he believes many would do better to develop the skills they lack than to hand the company to a hired CEO. He pointed to Amazon, where he said early efforts to replace Jeff Bezos gave way to coaching, and to Steve Jobs, who he said came back after his exit as a more humble and open leader.
Shifting levels of leadership
Abbott noted that leadership changes occur at “the ones and threes,” specifically at 10, 30, 100, and 300 people, according to Infusionsoft’s founder. As organizations grow, they add leadership layers, making challenges more complex.
Ultimately, Abbott says leaders must grow as fast as the company does, or founders will find themselves replacing leaders the business has outgrown.
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