Sky Dayton On Founders Knowing When to Leave

Sky Dayton founded three companies: EarthLink, Boingo, and most recently Helio. Each time he's stepped away from the CEO job and moved on to another company. In an interview Dayton at UCLA's Anderson School of Management in front of students and faculty, I asked Dayton about why he doesn't run companies long-term. (Video of the interview is here on Portfolio.com.)

Q: You once told me that you found that you like and are good at starting companies and getting them off the ground, but aren't particularly good at or don't particularly like running them once they're going. 

A: Yeah, you know, I'm constantly learning.  And it's something that I would like to learn to do better.  There's  three stages of anything.  There's the sort of birth and growth, and there's sort of the maintain stage, and then there's the decline.  I mean, that's just the way the universe works, right?  And I think that you find people, and you - certainly as I was hiring executives, I would find that they would be good at one of the three stages, but rarely all three.

And I would love to be good at all three.  I would love to be good at every aspect of it.  That said, no one can deny the thrill of the first stage.  You think about it in terms of math - anybody can take something from one to ten.  But to take something from zero to one - one to ten is 10x, right?  Zero to one is infinity, right?  So it's really hard to do.  And - but it's also the most fun.  It wasn't there - nothing was there, and now something is there.

That's pretty cool!  I like that.  But I do think that there are people that are really good at taking something from one to ten.  And what I try to do - what I try to do at EarthLink and I've tried to do at every company since then is surround myself with really smart people - people that are even smarter than me, and get out of their way.  Make it their game and get out of their way.  And I think that's something that a lot of entrepreneurs have trouble with.

Q: Are you good at that?

A: Well, certainly there are moments where you're like, "Holy crap!  I've just handed the reins to somebody and I don't know what's gonna happen."  But I trust people.  And I know that they're looking at the same future that I'm looking at, and you multiply your ability to get your - to achieve your goal by having multiple people help you achieve your goal.

So you - it's never gonna be perfect, but the outcome is gonna be better than if you were struggling alone the whole time. 

Q: So can you sort of predict at some point when you're going to get itchy or - or what happens?

A: It seems to be about three years.

Q: Does it really?

A: I seem to be doing - three years as a CEO seems to be my number, but I'm not wedded to that.  It could be one year.  It could be ten years.