I agree that those are common problems when startups start hiring people. The thing is, those are not problems with a “larger organization” — those are problems with mismanagement. Management isn’t an issue when it is just you and two of your buddies. It is an issue when there are 20 people.

One thing that sinks many startups when they are just starting to be successful is that the founders, despite being smart guys, don’t realize or at least don’t want to accept that they are not managers, leaders, and CEOs. They are engineers and business people. They start things and they build things. They don’t manage. It’s like putting the pit crew in a race car — the professional driver will be able to drive the exact same car faster than than any of the pit crew can. Yes, engineers can learn to manage, but often they do not take the time to do so, and neither is it their passion to manage. After all, it takes time away from building real stuff!

The lesson is, know what it is that you are good at, and do that. Find someone else who is good at doing the things that you are not so good at, and let them do it. That works best for everyone.

So if you do start becoming successful, with or without funding, put your ego back in your pocket and hire a real manager.

I hope that u did not pay to go for this OR that the real entrepreneurs’ wisdom paid off. I still love that comment 2-10%. So typical of someone who never founded anything but lives off the alms of the founders.

Nothing entirely new, but the comments proved interesting. The varying view points reminded me of your post…

Personally, I am a fan of Udi’s approach rather than VC funding–as it builds character and consolidates power in the founder.