Should You Make Way for a Professional CEO: 4 Rules to Decide

In the wake of Sam Bankman-Fried's kamikaze dive, there are some questions about child prodigies starting unicorns with some gurus who opine in the Harvard Business Review that perhaps founder-CEOs should consider make room for professional CEOs. Should they now?

Prodigy Sam Bankman-Fried started his crypto business when he was 25 years old. He created a global business that attracted billions in capital from some of the most successful investors in the world. Then his business collapsed within days. Elizabeth Holmes (Theranos), Travis Kalanick (Uber) and Adam Neumann (WeWork) are other prodigies who met ignominious ends. So yes, some should go to pasture.

On the other hand: Sam Walton started with a small store in Arkansas when he was 27 years old. From this beginning, he pivoted and built Walmart, one of the giants of global commerce. Walton passed away in 1992 and his business is still earning billions for his heirs. Other entrepreneurs who launched and built billion-dollar companies without going into flames include Bill Gates, Steve Jobs (who had to come back as an “elderly statesman” to save the company that created), Michael Dell, Jeff Bezos, Michael Bloomberg, Brian Chesky, Bob Kierlin, Dick Schulze and Richard Burke. All of them built successful giants.

Of 122 American unicorn entrepreneurs, more than 94% stayed on as CEO to build their business. To suggest that these entrepreneurs give way to a professional CEO based on a few who have passed away is no reason to smear them all at once. It also raises questions about professional CEOs given the backgrounds of Jeff Immelt, Ken Lay, and many other CEOs who passed away.

There were 4 main types of unicorn entrepreneurs and four rules for staying or leaving.

Rule #1. Get a professional VC and CEO after science development - if you're "just" a genius scientist

The genius scientist develops breakthrough technology with strong intellectual property. In my study, the unicorn based on genius scientists created about 1% of the unicorns. Herb Boyer split the gene and co-founded Genentech, which was led by a professional CEO.

Rule #2. Get a professional VC and CEO after proving the unicorn opportunity - if you're "just" a strategist

The next category of unicorn entrepreneurs are young strategists who are at the forefront of an emerging industry. They use new strategies to suit emerging trends and destroy industry giants that usually lag behind the trend like Sears, Borders or Wards. Usually, many new companies enter an emerging industry, and the winners are the few who develop the right strategy to control the emerging industry.

Pierre Omidyar used the emerging internet to auction products and services and created eBay.

· Earl Bakken (Medtronic) developed the pacemaker and started the medical electronics industry.

Rule #3: Raise venture capital and stay as CEO – if you are a leader and need venture capital to use Capital-as-a-Weapon

The capital-intensive unicorn leader jumps into an emerging trend, finds the right strategy to dominate the emerging industry, and then flies away to prove his leadership skills. 18% of unicorn-entrepreneurs fall into this category. They derive their long-term advantage from excellent strategy, capital as a weapon and their own skills.

Bill Gates stayed and built Microsoft

Jeff Bezos stayed and built Amazon.com

· Brian Chesky stayed and built Airbnb.

· And there are many more.

Rule #4: Avoid VCs and Build the Unicorn with Skills-as-a-Weapon - if you're a unicorn entrepreneur

Finance-smart unicorn entrepreneurs develop unicorn opportunity and finance-smart business strategy, finance the unicorn without risk capital, and use smart finance skills to turn the business into a Don...