Sometimes people look at my résumé and wonder how a carpenter became the CFO of GE Business Innovations. To me, it was the logical progression for someone who likes to design, build and improve things.
While I don't use hammers or saws at work anymore, the skills and knowledge I acquired as an apprentice carpenter and later as founder of a small, but profitable, residential construction company are on display every day in my role at GE.
Venture capitalists expect their startups to grow and be profitable, but that doesn’t happen by just writing checks. In our GE Ventures investing group, we collaborate with portfolio company CEOs to tap our parent company’s far-flung resources in ways that benefit our startup investments and our parent company. And in our Business Creation group we invest sweat equity and money to start and incubate high-growth new companies that leverage GE’s unique market, customer and technology advantages.
During the global credit crisis I had an opportunity to join an up-or-out leadership development program. GE recognizes how important it is to develop expertise in-house, and I was sent all over the world with teams that did valuation and restructuring analyses. Every couple of months, I would be immersed in a different business somewhere across the globe—in places like Mexico, Japan, Brazil, Italy or the United Kingdom. What better way to learn the myriad of factors that distinguish successful businesses from failures?
As it turns out, I’ve seen some of the same challenges I experienced when I was managing my crews as a residential contractor play out across industries and companies of all sizes. And I’ve watched as dogged and resilient start-up leaders have dealt with setbacks and then succeeded. When I mentor or speak with new business leaders, my goal is to share the knowledge I have picked up in my time at GE so that they can focus on learning entirely new things.
Looking back, there are three key insights that I have taken in working alongside VCs and successful startups that would have helped me be a better entrepreneur when I ran my own business:
Build to scale. As part of an organization that supports startups, I see the hard work that is required to build a sustainable enterprise that grows and thrives. Hiring great talent and assembling a diverse leadership team is a key part of this. To successfully scale a business, entrepreneurs need to have the right people to develop marketing plans, work with customers, manage projects and take over other necessary tasks. My business grew, but in retrospect I see that I did too much of the “day-to-day” work---focusing on the product, execution and sales--- that I missed the important things that differentiate a “scale” business with enterprise value from a small company with little value beyond the size of its sales pipeline.
Ask for guidance. It’s important to have a large professional network, but entrepreneurs should take time to find and connect with two or three experienced individuals in their field—the “been there, done that” folks---and learn from their successes and failures. Entrepreneurs are often so confident (and busy!) that they believe they can go without counsel. But, after watching our venture team at GE collaborate with startups, I now realize a few mentors who had already scaled construction businesses would have been an invaluable go-to resource for me. These wizened people are out there and are usually flattered when asked for guidance.
Hone leadership chops. Leadership development and learning is a never-ending quest. Working in a VC environment has allowed me to see firsthand that the skills required to start a company aren’t the same as those needed to lead as the company grows. And, often, a founder’s managerial savvy doesn’t scale in tandem with the business. Let’s face it: Starting something small is different than leading something large, which is a big reason some founders in VC-backed companies aren’t leading the companies when they are sold. It takes hard work and dedication to develop the skillset an entrepreneur needs to play in the big leagues. If I had known this I would have done more to develop as a leader in my company. I underestimated how much I needed to learn—and I’m still refining my skillset in my current role.
None of this replaces the hard work that every entrepreneur must contribute toward their businesses, but it might get you there faster. Building a house starts with the foundation—and so does every good business.
By Tim Cantwell
CFO, GE Business Innovations