I have not blogged about the big news coming out of Linden Labs with the announcement on March 14 that Philip Rosendale was going to step down. I got the info via the great work of Reuters.

At first, I was surprised but then thinking about it, it made total sense to me. Linden Lab founder Philip Rosedale faced a troubling choice: Did he want to be in control, or do he want their companies to succeed? Clearly things have not been progressing well in the last year as the Lab started to make the transition to a larger company. Philip elected to step-aside for the better of the company.

I know that must have been a hard decision to let go of this effort. Having had the privilege of talking with Philip a couple of times, it is clear that Philip believes deeply in the potential for Second Life to be a world-changing technology

Eric from Reuters has done an excellent job in writing about this change. Click here for his article.

In the article, Eric mentions a Harvard Business Review study published by Noam Wasserman that the “business start-up wonk” in my enjoyed reading. My takes aways were many, but these two stand out.

Four out of five entrepreneurs, my research shows, are forced to step down from the CEO’s post. Most are shocked when investors insist that they relinquish control, and they’re pushed out of office in ways they don’t like and well before they want to abdicate. The change in leadership can be particularly damaging when employees loyal to the founder oppose it. In fact, the manner in which founders tackle their first leadership transition often makes or breaks young enterprises.

Entrepreneurs face a choice, at every step, between making money and managing their ventures. Those who don’t figure out which is more important to them often end up neither wealthy nor powerful.

It will be interesting to watch how Linden Lab evolves.