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The Theory of Startups – Leadership and Management
written by shalini tripathi, September 2017

Startups function in a unique context which is characterized by unfamiliarity and unpredictability. There is no place where a robust leadership is required more, than in a new venture. The odds – lack of human resources, financial capital, and access to customers – are bundled against the leaders, making leadership more crucial in a startup than in a large firm.

Creating and sustaining a new successful business venture demands not only vision and financial capability but also leading others to transform that idea and capability into successful reality. This requires the startup leader to be courageous, positive, transparent, righteous, forward-looking and helping employees grow into leaders.

While the qualities that are conventionally associated with a strong leader, such as intelligence, decision making, toughness, and vision are always imperative to succeed, they don’t cover the full spectrum of what startup leadership requires. Add to these pro-activeness, innovativeness and risk-taking.

It is not enough to set a strategy for the company, or to execute it; startup leadership requires both. Recognizing opportunities and acting upon them is vital for success. A distinct sense of curiosity is the driving force in tough times. Crises in startups are almost inevitable – a leader must be able to identify and mitigate them with recovery plans and lessons learned in place. It is not sufficient just to collect data, but to go beyond its face value, and analyze it to your strategic advantage.


It is essential for a startup leader to understand that ideas that bring breakthrough products or services to the market often involve setting up an entire ecosystem and depend on a long-term investment. Some ideas develop slowly, and customers may need time to realize their value. Entrepreneurs with slight strategic restraints engage in more than necessary and strain their resources. To succeed, they must ensure that they successfully concentrate their resources.

Managing Resources

That competitive advantage comes from the human side of the organization cannot be emphasized more. It is important to have skillful and motivated workforce for viability and growth. Dividing people for tasks is not sufficient; a leader has to hire right people who can formulate best strategies and create efficient processes.

However, bringing in and retaining resources in a new venture is reasonably a mammoth task that entrepreneurs face. A lack of both, name as well as achievement, increases interpretation of risk by probable resources. It is, therefore, necessary for an entrepreneur to staff the firm ahead of time.

Amalgamating trust and boldness

The leader has to create an environment that nurtures trust, helps people build on their strengths and be more positive, expands their thinking, adds value and improves the overall capabilitities of the organization.

Moreover, startup leaders need to build organizations that can learn new things and adapt quickly. In short, they need to be innovative. People should be bold enough to try new things, develop new processes and solutions, and even things that may not work. Even leaders must learn to fail and turn around quickly.

Startup leadership requires both, results as well as healthy relationships, while keeping the following in mind:

  • Calling for results through innovation
  • Knowing people, their strengths, weaknesses and motivators
  • Bringing out conflicts and problems as soon as they arise
  • Setting clear expectations for each person and hold him or her answerable for decision and results
  • Giving unbiased feedback frequently

Lastly, it is essential for a leader to deeply believe in both freedom and responsibility to support entrepreneurial success.