Why Building A Business Is A Masterclass In Leadership

When it comes to companies with visionary founders-turned-leaders, Reed Hastings is one that springs quickly to mind.

You may already know his backstory: In 1997, Hastings was perturbed by a $40 late fee on an Apollo 13 DVD he’d borrowed from Blockbuster. Seeing the opportunity to disrupt the video rental space, he went on to co-found Netflix, which began as a by-mail service that allowed subscribers to keep their rented DVDs for as long as they wanted.

Had Hastings been a different founder, he might have stopped there, riding this single wave of his success and eventually fading into obsolescence, as so many do. But he didn’t. Recognizing the growing power of the internet, Netflix pivoted from DVDs to streaming, fundamentally changing the experience of viewing movies as we knew it.

Hastings, who only stepped down from his role as Netflix’s CEO in 2023, wasn’t just known for his powerful foresight—he was equally known for his singular approach to leadership. Netflix hires—and retains—only top performers, and those who fit the bill have access to ample amounts of freedom, trust and transparency.

Hastings’ methods have been described as quirky, autocratic, transformational, and plenty of other things. But unequivocally, his leadership style is uniquely his. I don’t know Hastings personally, but it seems clear that he understood what worked for his company, and followed his own system regardless of convention.

Successful CEOs don’t develop overnight. But founders who make the transition can use many of the same skills that they used to build their companies to eventually lead them. Here’s why building a business is actually a masterclass in leadership.

You Can Use What You’ve Learned

If you’re a founder, having a growth mindset is a must. You have to be able to accept new information and use it to change direction when necessary.

Hastings did this not only with his embrace of streaming, but also within his own workforce. In the early days of Netflix, the company laid off a third of its staff. Hastings decided then that the most effective path toward innovation was to retain only the company’s “keepers”—those employees that he’d fight to keep if they wanted to leave. If leadership determined someone wasn’t indispensable, they’d be shown the door.

The so-called keeper test is an unorthodox leadership approach, but it’s also one that has served Netflix well. In the process of founding a startup, you learn to trust yourself and what works for you. That confidence and sense of self also translates to learning your footing as a CEO.

As Ali Rowghani, a partner at Y Combinator, points out, it’s important to develop your own style, not just mimic what others have done in the past. As with founding a company, just because something worked for one person doesn’t mean it will work for everyone.

“You have to be authentic to who you are. You can’t try to be someone else if you wanna be a great leader. You can’t try to imitate Steve Jobs and hope that people will just kind of think that you are a Steve Jobs,” she said.

You Know All The Ropes

When I started my company, Jotform, I did every role myself. Not only did this give me an invaluable opportunity to learn new skills, like basic graphic design, it also afforded me great insight into what skills and abilities I wanted to bring to the team when we did eventually expand.

As a bootstrapped founder, this slow growth meant I never had to make hasty hiring decisions based on pressure from investors. When you grow slowly and intentionally, it creates an atmosphere of stability that often doesn’t exist when VCs get involved. Because bootstrapped founders maintain their autonomy, they can also maintain the consistency of their visions, and aren’t forced to hire fast and fire faster based on changing whims.

For founders-turned-leaders, this is incredibly important: Studies have shown that the feeling of consistency and stability at a job is one of the factors many employees consider more important than salary. In one study of 13,488 people across 15 countries, 52% of respondents cited job security as the single most important factor in their work experience. Building from the ground up means you know what you’re looking for, and can make savvy hires that you intend to keep for the long haul.

You Understand The Big Picture

One of the great things about transitioning from a founder to a CEO is that you understand the company’s core priorities like no one else. And if you’re a bootstrapped founder, you have the freedom to ensure that vision stays consistent over time.

As a CEO, it’s your job to determine the company’s big picture objectives, and dedicate the resources necessary for those objectives to come to fruition. Founders have to face a similar tightrope walk of dealing with both everyday challenges and maintaining a high-level understanding of the company’s goals. Neither founders nor leaders have the luxury of avoiding difficult decisions, which is why the former is such excellent training for becoming the latter.

In order to focus your attention on the big picture, you have to learn to delegate. This can be especially difficult for a founder-turned-leader, who is used to having total control over every aspect of the company. As Reid Hoffman, co-founder and former executive chairman of LinkedIn, asked in a blog post: “Can you find, hire, and manage good people, then transfer work over to them so you can tackle the challenges you’re uniquely suited to tackle?”

He goes on: “Many founders are so talented that they have a hard time letting go of tasks once they start performing them. They often think things like, ‘Will someone else be able to do this as well as I can?’ The answer is almost certainly, ‘No, especially not at first, but they’ll probably figure it out over time, just like you did.’”

Building your business is the ideal training ground to become a great leader. A growth mindset is a must, but you also have the advantage of knowing your business and priorities like no one else. Great leaders are not made overnight, but if you’ve become a successful founder, odds are you already have many of the tools you need.