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Why entrepreneurs become bad managers and how to be a better one

Micromangagers and absent managers are all too common in startups. While understandable, neither mode is a long-term plan.

6 min read


Why entrepreneurs become bad managers and how to be a better one

Pixabay image/SmartBrief illustration

When I started my first tech company fresh out of MIT, I was an engineer, and my co-founder and I did all the programming ourselves. As the company grew, I found myself managing engineers, salespeople and vice presidents without the slightest experience in being a manager.

As I became an investor, I realized that I wasnt alone. The transition from doer to leader (with pit stops at player-coach, managing direct reports and, finally, to managing managers) is one that many entrepreneurs struggle with.

The types of bad managers that entrepreneurs become

There are two patterns that founders of startups fall into during this transition: they either become micromanagers or absent managers (and sometimes ping-pong back and forth).

If we use analogy of a server at a restaurant, then the micromanager is the server who is always butting in on the middle of your dinner conversation, much to your annoyance. Meanwhile, the absent manager is the waiter who leaves you alone for way too long, where you find yourself searching for him or her to get more water, order more items or to pay the check.

Its difficult to be an effective leader in the long term in either of these two scenarios. In fact, these management styles often lead to frustration from your employees and, eventually, to high turnover and low job satisfaction.

Why do entrepreneurs become micromanagers and absent managers?

While the symptoms of each of these two syndromes are easy to see in others, underlying these symptoms are beliefs that are very hard for many entrepreneurs to let go of as their companies grow.  These beliefs are expressed by two myths, which, like all myths, might have a kernel of truth to them, but can also lead to bad outcomes.

The first of these is: I can do it faster/better myself.”

Since many entrepreneurs have hands-on experience, we can get frustrated at how long it takes a new employee to ramp up or to get the job done to our satisfaction.

There was an old story about Bill Gates, who when his employees told him that they couldnt build a text editor using only 4K of memory, decided to build it himself. He locked himself in his office and emerged a few days later with a working editor.

This superhero” complex is very common among entrepreneurs. The reason we started our own company was because we could do it better” or faster” ourselves, and we expect our employees to be up to our level.

While this behavior is viable in the short term, the belief that you always know best can lead to becoming a micromanager. The underlying issue is that you dont trust your employees to do it right.” To ensure its done right, the micromanager tries to dictate every step of the work your employees do, much like the old story of the rider of a horse who tries to tell the horse every step to take. It wont work, and will lead to frustration on both sides.

On the other end of the spectrum, there is a myth that goes: Get out of the way and let people do their jobs.”

This frequently comes from entrepreneurs who are engineers and dont like having their managers come in every so often to check in on them.”  This is best represented by theuseless” image of the manager in the movie “Office Space” — the one who stops by your cubicle sipping his coffee and dispersing platitudes.

The underlying belief behind this myth is that management isnt real work. I certainly fell prey to this during my startup days. I would have too much real work” to do, and didnt want to waste time managing.”

Unfortunately, this extreme can also lead to major problems. Employees left to make decisions without any guidance whatsoever can get off track, can get stuck with unexpected obstacles and often get out of sync with the rest of the organization. Not having your manager check in on you enough so that you dont go off track is essential to keeping the organization running smoothly.

When its OK and when it’s not

Steve Jobs was a notorious micromanager. In fact, the Macintosh and many of his legendary products wouldnt have gotten built as quickly if he didnt press on every single detail. But the cost was often ruined careers and relationships and frustration on both sides.

For every Steve Jobs, there are more examples of an ineffective micromanager like T (not his real name) whose company I invested in. Every time I spoke with Ts employees or contractors, they talked about his abuse,” where he was constantly questioning every little thing they did, not to mention their competence. This led to a sort of constant paranoia about the founder, negatively affected everyones work and led to high turnover.

It may be OK to micromanage someone when they first join to see what they can do,” but if it goes on beyond that period, then it wont be healthy relationship for either side. Similarly, its OK to be an absent manager for small periods of time when you are a player-coach and have a lot of your own work to do, or if you are dealing with a major crisis (like the company is about to run out of money). But left unchecked, the absent manager can lead to all kinds of chaos.

Conclusion: Find the middle ground

The key is to find a middle ground between these two extremes — to check in with and hold your direct reports accountable, but to give them enough room to grow and make decisions on their own.

In the movie “Little Buddha,” there is a scene where Siddhartha (played by Keanu Reeves), who has spent years as a profligate prince and years as an ascetic eating nothing, has a moment of insight. He overhears a master sitar player telling his pupil how to properly string the musical instrument: if you pull the string too tight, it will snap; if the string is too slack, it wont play. Siddhartha uses the insight to find the middle way, his own unique path to enlightenment.

Be like Siddhartha in your leadership and management style: Dont pull your employees strings too tight, but then again, they cant be too loose because you are conducting a symphony. The reward is a more successful startup!


A graduate of MIT and Stanford, Rizwan Virk is an entrepreneur, venture capitalist, video game pioneer, indie filmmaker and bestselling author. His new book is Startup Myths & Models What You Won’t Learn in Business School, and he is also the author of “Zen Entrepreneurship” and “The Simulation Hypothesis.”  He is the founder of Play Labs @ MIT, and his video games have been downloaded millions of times. 

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