Friday, November 17 of the year 2023 will go down in tech history as a significant day. It’s a day that will be remembered and discussed for generations to come. It’s when Sam Altman found himself ousted as CEO of OpenAI for four days. This event holds some unusual lessons for founders.
Yanked away from your baby. Anyday
Surprises occur more frequently than you expect. No matter how well you perform or how dedicated you are, there is always a chance of being thrown out of the organization you built. Your creation can be yanked away from your grasp.
As a founder, you are an agent of change, and while society may respect you for that, there will always be those who hate the change you bring. Big part of the world hated Hitler, however half of the world hated Gandhi too. It does not matter what change you bring, you will be hated for bringing the change.
It is crucial to have a strong internal compass and be willing to be disliked for the changes you make. Steve Jobs once advised treating every day as if it were your last, and this mindset can help mentally prepare for unexpected outcomes.
One interesting way of dealing with such surprises is the idea of “attached detachment.” It is a challenging practice to be passionate about what you do while also being prepared to walk away from everything you have created at a moment’s notice. Sam Altman has shown an incredible display of attached detachment, recognizing that he can be fired from the board and still remain motivated in the game. This is a skill worth learning.
Technology matters, people leaders matter more.
While technical insights and expertise are crucial, people leaders matter even more. Many founders from engineering backgrounds focus solely on technical aspects, but having a strong people leader is essential for the success of a team or organization. Technical geniuses can bring rare and unique insights, but it is the people leaders who rally a team together and steer those insights towards greatness.
Google had Eric Schmidt, and Facebook had Sheryl Sandberg. Yes, Illya brought the technical genius that made ChatGPT work. However, most people rallied around OpenAI because of Sam. The fact that over 700 employees, including hundreds of researchers, were willing to walk away with Sam speaks to their belief that he was leading them in a direction they wanted to go. These individuals saw OpenAI as the ideal place to conduct their research, rather than a university or another big company.
As a thought experiment, if it were Illya who was fired, would the 700+ employees have chosen to walk away? It’s unlikely because Illya is not seen as their people leader, someone who can satisfy the rest of the team’s motivation and ambition.
Technical founders have to become that people leader or bring someone. Great organization can’t exist without people leaders no matter how great an invention is.
Drop 1–1 with your founding team at your peril.
The biggest killer of startups is co-founder conflicts. When the founding team cannot get along together, it can bring everything down. This is often overlooked, as people tend to focus on issues like product-market fit or lack of funding, but the significance of co-founder conflicts cannot be overstated.
When co-founders form a new team, it is because they see a shared spark and then rush to align their vision in their initial excitement. Initially they tend to hide their differences. However, as time passes, they realize that their vision may not have been as aligned as they initially thought. From a distance, it appeared that they were on the same page, but upon closer examination, their alignment was lacking
Inside the rocketship setting of a startup, your emotional capacity to deal with the gravitational force thrust of fast pace gets deeply tested. That can cause and amplify differences into a rift.
Therefore it is always important to be aligned with your crew.
Best conflict resolution tactics are put in place before the conflict occurs. One simple tool is having 1–1. If 1–1s, listening and acknowledging had happened between Illya and Sam could they have dealt with their disagreements less publicly and with less drama.
In this case it should have also been with the key board members which should have helped precipitate some of these lack of alignment sooner.
It is a good idea to have a 1–1 every 15 days where you are checking in on each other.
When life gives you lemons, make a lemonade
Most people hate surprises, but entrepreneurial leaders thrive on them. They have the ability to reframe a negative event into a positive outcome. Satya Nadella, one of the greatest CEOs of our time, exemplifies this skill. He took an event that could have appeared disastrous and transformed it into something positive. Satya’s arrangement to have Sam as CEO of a new AI research unit that would continue their partnership was a brilliant move. It showcased his mastery in turning every surprise and potential loss into a winning proposition.
When life gives lemons, it is always very powerful to ask “What is lemonade here?”.
Stay away from non-profits and complicated structure
Complicated structures and multiple narratives are sources of misalignment. For-profit organizations focus on the game of wealth creation, while non-profits often engage in status games.
Anyone who has run multiple startups knows that words like mission and core values, at best, carry a narrative bias. You begin with a grand vision and idea, but when reality shows a different truth, you must be willing to pivot, sometimes completely changing everything. However, when someone becomes overly attached to their narratives, it becomes a hindrance to adaptability and change.
Vision is most clearly seen when looking back in the rearview mirror.
Another challenge here stems from differences in time horizons. Founders typically operate within a 3–5 year time horizon, while many nonprofits work with a 30-year horizon. This discrepancy alone can lead to conflicts and disputes.
I have personally been involved with at least four non-profits related to startups, and I’ve noticed that nonprofits may initially sound great and noble, but most of them fail to work and fulfill the impact they set out to achieve.
No big impact to any startup has come from non profits.
Founders who run startups should always be wary of those who talk about the great good. Stay away from non profits as far as possible.
This is not say that you should not contribute to broader society. One should keep their charitable activities separate from their pecuniary activity.
This lesson has proved to be the most expensive one for both Satya and Sam in this entire episode.
No investor board is the wrong lesson
It’s easy to jump to the conclusion that giving control to a board is the reason behind Sam’s troubles. However, it’s important to recognize that not having a board can also lead to issues, just like the situation with Sam Bankman. The key factor here is not just having a board, but having the right members on the board.
Ironically, in this particular case, if an investor board had existed, the situation might have unfolded differently. The presence of an investor board could have influenced the outcome and potentially led to a different path
To conclude, embrace the inevitable surprises keep the steve job lesson in mind, cultivate attached detachment, prioritize people leaders over technical geniuses, resolve conflicts before they escalate, turn negatives into positives, keep structures simple, steer clear of nonprofits , and ensure the right board members are in place.
Published initially at https://medium.com/@mtrajan/unusual-founder-lessons-from-the-openai-saga-8aa77127a8d1
