The passing of a talisman

I have not come to bury nor praise Steve Jobs--he was indeed (insanely) great at what he did at Apple, NeXT and Pixar. I wanted to talk about a fairly common occurrence for fast-growing tech companies--what happens when your talisman has to leave to answer a higher calling?

There are some truths in this world. One, we all must die.

Two, tech companies are subject to growth cycles never seen before--started yesterday, game-changer today, gone tomorrow. It is fairly likely that within a founder's lifetime (or even sooner), a tech business may see its genesis, boom and then demise. With such short spans, there would be very little time to prepare for succession planning.

How do you even do succession planning for a founder who may have started out as the delivery boy, janitor, engineer, inventor, accountant, salesman and CEO all rolled into one? Very often, someone with the all-in package of a company founder may be a pipe dream.

Even if that was possible, the real risk for businesses would then be alleviating the financial effects. Loss of investor and customer confidence, the ability to do much on few resources and a higher executive compensation package may all translate to larger overhead cost. Add to that a possible need to buy out the founder's stake from his estate which may arise for various reasons--you can see why this is such a concern.

A common strategy done these days is for the company to buy keyman insurance for such a founder and structure it such that it handles the exit and replacement cost. Asian businesses are typically shy when thinking about issues surrounding death but as the man himself said, nothing focuses your thoughts more than death.