Founders and evolution

Fred Wilson has an interesting post today – The Founder Factor where he shares some thoughts about the role of the founder as a company grows. He ends with the comment:

"The founder factor is a huge intangible force in companies and is most often for the best."

In the early life of a company I agree with Fred. Founders with a strong vision can help keep a company focused as it faces the distractions of growth. Keeping true to a vision can be a major factor in the success of a company.

But as the company grows, it's critical that the founder's perspective and vision evolves both to reflect the needs of the company but also the changing dynamics of the market in which it is a player.

I can think of a number of companies that continued to be heavily influenced by a founder that eventually declined in influence or failed because the vision didn't evolve with the market and environment.

For example, Digital Equipment Corporation clinging to the mini-computer despite the PC revolution, Tandem Computer and its focus on fault-tolerance as hardware became incredibly reliable or perhaps Sun Microsystems and its vertical integration (chip, hardware and software) as its competitors became technology integrators.

I can't help thinking of an observation by one of my former colleagues regarding the "Tragedy of the commons" – any specific decision may look to be right on a standalone basis yet in the long term lead to a bad result.

Only time tells…