Having been a CEO of three startups, I can honestly say that I have never been a great CEO. I probably thought I was at the time, but that’s part of what being a Startup CEO is all about…not knowing what you don’t know but having the courage to give it a shot anyway. Maybe I’ve picked up some lessons along the way…let me know what you think.
1) Remember You Don’t have all the Answers
CEOs are expected to have all the answers. They are the final decision maker, the law, the place where the buck stops. There is a weird dynamic in being the CEO…people, especially those that work within the company, expect you to have all the answers. It’s quite a pressure…because, inside, you know you don’t. But as an early stage company, when salaries are low and team commitment is hanging on the potential upside, admitting you are fallible, nervous and sometimes unsure of the answers is not easy to admit.
So what should you do?
a) Make sure you pull the right ‘experts’ together and trust them to do their jobs. Are you a CTO? No…probably not if you are the CEO, so go get the best CTO you can find and trust them to do their jobs. The same goes for the other core functions. Work with them to set the strategy of the company, determine what’s possible with the cash you have and go get those first customers.
b) Pull together a group of formal or informal ‘advisors’…people who have been through what you are trying to accomplish a few times. People five, ten or fifteen years ahead of your curve. Choose them from the different disciplines…sales, finance, marketing etc.
You’ll probably find that the dynamic of these relationships is different for each advisor…some will advise on specific things such as fund raising, customer introductions, sales and marketing strategies, HR issues, managing cash and so on. But some of those relationships will probably be closer…relationships where you feel comfortable letting your guard down, being angry…moaning about things.
As a CEO, you need a few people who fulfill and a spouse often doesn’t cut it…they won’t be able to get into your mindset unless they happen to be an entrepreneur too and even if they can, because they live with you…there will come a point where they are sick of hearing about your startup. I promise you this WILL happen. Get some advisors…or entrepreneur friends…give them some equity and leverage them like mad and find one to be your therapist! Don’t believe me? Go start that business and write to me in 18 months! 🙂
Where do you find those Advisors? Well you could try http://www.AdvisorGarage.com
2) Remember You need Different Skills at Different Times
a) Visionary Sales:
In the beginning it’s about a vision and selling it. Hard! When there’s just you…you need to sell that vision to people who you want on your team, the angels or VCs, potential customers, partners and anyone else that will listen. Careful…you family and partner WILL get bored of hearing about your new company, I promise you.
b) Tactical Builder:
So you have the vision but what are the component parts of that vision? What resources do you need (Cash/People/Product/Customers/Infrastructure) to make that vision real? How can you leverage your network to expand it and ensure you are getting everything the business needs?
CEO’s need to execute! And they need to work with the other heads of each of the disciplines to make sure they execute. i.e. Sales, Finance, Marketing, HR. Probably in that order too. One watch out: Try not to get too ‘hands-on’ below the VPs…young CEOs often think they need to know and be involved in everything the team is doing. They don’t and if they try i) they won’t be focusing on the important elements like customers, cash and getting the company message out and ii) It can erode the influence and authority of the VPs with his or her teams.
d) Obstacle Remover/Facilitator:
If you have the right team, keep out of their way. I don’t mean hide in the closet when they walk by, I mean give them the space to be great at their jobs. If you have got the right people, they should (?) know more about their field than you do! Focus on getting them the resources they need to deliver. Remove obstacles and don’t become one.
When the company is firing on all cylinders…and the human machine is humming, your role as the builder of the company will begin to take a back seat. If that’s what you enjoy, try to resist the temptation to have the company pursue you next idea or twist on the original business model. If you have started to hit the key milestone…i.e recruiting the right senior team, the first few customers, a product that people will pay for, a kick butt advisory board and so on…you will probably find that your time will become occupied more and more on fundraising and pitching and closing those ‘strategic’ customers. The title of CEO still has some influence (even if the team is 8 guys working in a basement!)… use it to get as high up the food chain as you can within strategic customer prospects and with angels or VCs and close them.
f) Company Face:
You are the poster child of the company! Make sure you have your ‘story’ right and make sure it’s interesting. Think of all the angles that make it something people will want to write about. Get out there and be the ‘face’ of the company. Be passionate, understand your space better than anyone else, search out opportunities to tell people about your products, your company, your vision and you! In my opinion, the best example of this skill being leveraged to really drive a business is Richard Branson…Donald Trump isn’t too shabby at this either!
What’s the common thread through all of the above? Being great with people!
3) Remember You own the ‘Big Picture’:
As the CEO, you are setting the agenda of the company. You are not developing the technical strategy of the product folks, the marketing strategy of the marketing folks…well, you get the picture. You need to be thinking about where you want the company to be in 6 months, 12 months, 36 months. You need to be thinking of all of the component parts (i.e. resources) and milestones to get it there. You also need to try to anticipate ‘big’ problems and make sure you have figured out how to address them. However, when you are turning your big vision into the plans to deliver, make sure you focus.
4) Remember You have to Focus:
Don’t get diverted by a ‘sexy’ opportunity but try to stay flexible enough so you can be responsive. It’s a tough challenge to know the difference but I have seen a few young companies ‘flip flop’ between two or three strategies and never really make much progress in one direction…its often because there are too many opportunities, they all seem attractive and the CEO does not put a flag in the ground and say “That’s it! That’s what we are going after…”
5) Remember You can’t be Nice all the time:
Some CEO’s just want to be loved. Weird but true…some people take onboard the role of CEO because they want to be center of attention and want the adoration that comes from being the CEO. Being collaborative and respecting the individual is critical for building a young company…but the reality is the buck needs to stop somewhere. Someone needs to be the final arbiter, the person whose decision is final. Otherwise the company will lurch around in multiple directions and will never realize it’s potential.
CEOs who don’t already know the answer need to listen, listen some more, ask the right questions, think about it…then make a decision and make sure it’s enforced and embedded in the plans.
6) Remember You will Need to Fire Someone:
I usually knew I would need to fire a person within 2 weeks (maybe even sooner) of working with them. Did I fire them after those two weeks…rarely. OK…Never! But I should have! When it’s clear, admit to yourself that you made a mistake, resist the tendency to try to ‘fix’ it and do what is necessary. Be clear and explain specifically why…I found that talking to the person offsite was often the better way to have the conversation…it’s more neutral. And of course, always face to face.
As CEO, you will have to fire someone! And doing it sooner rather than later is better for the company…better for the person concerned…and better for you! If you don’t think you can fire someone…for the sake of employees in the wrong job, in the wrong company, desperately unhappy and just sticking around to pay their bills and for those that are carrying them within the company…don’t become a CEO!
7) Remember You Are Responsible for Making Sure there’s enough Cash!
It’s not sexy to manage cash…its much more sexy to close that big strategic customer, that huge deal, those VCs and the list goes on. But everyone that works for the company is trusting that you will make sure there is enough money so they can pay those mortgages, car loans and school fees. Watch that cash.
Put policies in place so expenditures above a certain level need to be agreed by you. Make sure the VPs have their own budgets and sign off amounts…but even so, watch that cash. Get monthly, weekly and maybe even daily summaries. Resist the urge to spend money…having a great office does not mean you have made it…it does not mean you are a ‘real’ company. It means you are paying alot on rent. What makes you real is having paying customers that are recommending your company and products to other customers!
8) Remember You will have to give up the Company One Day:
If you are lucky your startup will quickly grow and become about more than just about you, your vision and passion. Sooner than you will like your startup will one day outgrow you or need more than you can give or are prepared to give. Try to be self aware and have lined up your replacement before that point arrives. You customers, your people and your vision is trusting you!
Being a CEO is one of the best (and worst) jobs in the world. It can be too much pressure and responsibility for some, especially those that don’t know how to let go. You have to learn to switch off sometimes. Decide when you will stop thinking about the company…8pm? 10pm? 12pm? Then make sure that you do. Lock all the worries, the opportunities, passion and excitement inside a mental box for the night and go remind your friends and family who you are. You wouldn’t like it if they forgot!
There should probably be a self help group for Entrepreneurs, thinking about it, that’s probably called golf. I just wish I played!
These are just my personal views and as I’ve admitted, I get it wrong sometimes so tell me what you think and take a look at http://www.AdvisorGarage.com. It can really help!
NOTE: I grant permission for every reader to reproduce on your website or blog the article you are now reading. But copy this article ONLY, without any alteration and please Include the copyright statement. (NOTE: I am giving permission to host on your website this article AND NO OTHERS. Reprinting or hosting my articles without express written permission is illegal, immoral, and a violation of my copyright.)“Copyright © 2007, Advisor Garage LLC. Advisor Garage Blog. All rights reserved. Permission granted to reprint this article on your website without alteration if you include this copyright statement and leave the hyperlinks live and in place.”