Should the Inventor Be CEO?
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Putting a Healthy Divide Between Inventors and Managers
by Scott Keeley
Karen James is a typical software developer: focused, methodical, binary. She is also inventive. She can envision a solution to a problem via lines of code. In the early 90s Karen wrote a software application that medical staff could use to keep track of patients and manage the back office. This was before electronic health records was a thing, and forward-thinking practices were steadily purchasing it. As business increased, Karen hired a team of coders, and soon found herself heading a 50-person shop. The coder had become a CEO. But instead of doing what she did best -- writing code to solve problems -- she became wrapped up in running her company.
As she got deeper in, Karen failed to acknowledge that there was more to running a business than running with an invention. As the company expanded, Karen did not consider ceding business operations to a business person. And her staff were too cowed by her authority to make such a suggestion. The business foundered and died within five years. You could say that five years was a good run, but considering what was to be the future of electronic health records, maybe not.
Karen was an inventor trying to be a CEO. She had never been interested in business, and none of her impressive resume prepared her to fill the position of CEO. Nonetheless, the company grew out of her creation, so naturally Karen wanted to be in charge.
We Can’t Launch. We’re Launching.
Paul, an accountant, and Mike, an industrial designer, together conceived of a kitchen appliance that produced instant protein shakes out of whole grains and fruit. Within six months they had filed a provisional patent and had developed fully functioning prototypes. Even though parts were 3D-printed, with auto-body filler and spray paint used to cover minor blemishes, at the trade shows the prototypes passed for finished product. As Paul and Mike’s crowd-funding campaign took off, they quit their regular jobs to produce The Vegemator.
In less than a year they had first-run samples in hand, and a retail outlet was ready to carry their product. But Mike, the designer and creative juice behind The Vegemator, was not ready to let the first run out the door. “It’s not ready,” he said. “The color isn’t right. The texture on the plastic isn’t right. We can’t launch.”
Paul, the business mind of the partnership, stepped in. “We don’t have enough money to keep perfecting this,” he said. “More importantly, the product works, and people want it — now. We’re launching.”
So they launched their fully functioning, less-than-perfect Vegemator. They met demand, and soon they achieved cashflow and customer-flow, even though a small number of buyers ended up returning the product. But these customers did not want their money back; they wanted a new Vegemator. By then Paul and Mike were producing version 2 and had worked out the bugs. The few customers who had asked for a replacement were happy to have the latest version of a now-popular product.
Soon the big chain stores were ordering the Vegemator, and the venture took off.
What Paul and Mike did right was to allow the business-person of their team to handle management, and the inventor to create. Karen the Developer, on the other hand, ended up trying to do both.
Over the years I have witnessed many inventors ending up in this situation, leaving them in a failed business or one that never got off the ground.
Inventive talent is often the antithesis of business ability. There are exceptions. Inventors’ brains are wired for what’s new, what’s next, and what’s better. That ability is what drove them to invent in the first place — something, to them, wasn’t good enough.
The CEO, however, must weigh the acceptable against the “best.” Raymond Loewy, the industrial designer who invented “streamlined” design, described it as MAYA: Most Advanced Yet Acceptable. Producing and selling something requires balancing materials, components, manufacturing processes and costs against what the market will bear.
At some point an invention wants to become a business. That’s the juncture at which creative should split from management. Karen, our software developer, left no space between the two. Mike wanted his Vegemator to be good enough to sell; Paul wanted it to be the Best Thing Ever. When an invention becomes a business, it is Mike and Paul who win, because done is better than perfect.
Scott Keeley is a patent agent with KeeleyDeAngelo.com
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