Home > For Entrepreneurs > A Key Management Lesson from the 19th Century Guest Post on the History of Venture by Nathan Zeldes, CIV Research Affiliate

A Key Management Lesson from the 19th Century Guest Post on the History of Venture by Nathan Zeldes, CIV Research Affiliate

来自十九世纪关于公司管理的重要一课

Here is part of a letter written to a technological innovator:

Firstly: I want to know whether if I continue to work on … your own great subject, you will undertake to abide wholly by the judgment of myself … on all practical matters relating to whatever can involve relations with any … fellow-creatures?

Secondly: can you undertake to give your mind wholly and undividedly … to the consideration of all those matters in which I shall at times require your intellectual assistance and supervision; and can you promise not to slur and hurry things over; or to mislay, and allow confusion and mistakes to enter into documents, etc?

Thirdly: If I am able to lay before you in the course of a year or two, explicit and honorable propositions for executing your engine … would there be any chance of your allowing myself … to conduct the business for you; your own undivided energies being devoted to the execution of the work?

Sounds sensible, doesn’t it?

Lovelace
Ada Lovelace

This letter was sent in 1843 by Ada Lovelace to the inventor Charles Babbage. Babbage had been working for years on his vision of a mechanical programmable computer, the “Analytical Engine”; he was also driving the project into the ground by exceeding budget and time estimates, quarrelling with his chief engineer, and pissing off the government whose funding he sought. A genius he was, but he had terrible management skills.

Ada, then 27, had been assisting the 51 year old Babbage for some years, but was despairing of the setbacks to the project. Having excellent PR skills, she wanted to save the project by taking on the management and external relations and putting Babbage to work as what we’d call today a CTO.

It’s amazing how the issue Ada was trying to solve is still common in startups today. One of the crucial moments in a startup’s life is when its techie founders attain the wisdom to bring in a professional business manager. Of course, it may happen that the founders include a good manager: see Apple, or Google. But where the founders are all tech geniuses, relinquishing the reins to a solid manager is emotionally painful, yet critical.

It isn’t easy to tear a founder from their perception that they know it all. You’ll note the queries in Ada’s letter: Can I rely on you, she asks, to focus on the technology and leave management to me? Can I rely on you to work on the priorities I assign – and to trust my judgment completely in all matters of interaction with other people?

Charles Babbage
Charles Babbage

This intelligent young woman senses the danger, and is seeking an explicit commitment from Babbage to shut up and do as he’s told – or she’s out! (This, mind you, she says to a respected scientist who could easily have been her father. Gotta love her chutzpah!)

These days it’s often the VC folks who do the founders this favor, by demanding that a business manager be appointed, as a condition to investing. Of course the founders and the new CEO must also get along; this is a critical decision that can make or break a startup.

It could also break one in Victorian England, and in the case before us, it did. Babbage completely rejected Ada’s conditions. He continued to try and build his Analytical Engine without her, and failed miserably. He died a sick and bitter old man.

There is a lesson there… ignore it at your peril!

As an additional related reading, we suggest “High Differentiation and Low Standardization: The Role of Venture Capitalists in Transforming the Governance and Management of Family Firms” by Prof. Gang Hu, Chaopeng Wu and Thomas J. Chemmanur – awarded with a CIV Runner-Up Award in 2015.

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