The company eventually filed for bankruptcy protection and sold its inventory to CBS Musical Instruments in 1979. Mr. Friend learned from his mistakes. After he founded company No. 2, Computer Picture Corp., he moved into the chairman role after six months. Currently on his fifth venture with eYak, which he launched in 1999, Mr. Friend intends to step aside some time this year. He now views turning over the reins simply as part of the natural cycle every budding business must go through.
Most founders have a hard time knowing when to let go.
Their egos get in the way and they resist giving up control. In some cases, a perceptive board will take note before long and step in. Typically, that means a speedy exit for the founder as the board brings in a new management team. Michael Rolnick, a partner with venture-capital firm ComVentures of Palo Alto, Calif., has seen many an ousted founder. Entrepreneurs know how to generate great ideas, but they often lack the talent to scale their companies, he says.