How to succeed as a startup CEO

When your startup starts to make money, do you have what it takes to be an effective leader?

Wednesday, November 09 2011 || Start Me Up || BY Ken Erskine

CEOs of startups are a rare breed. They don’t usually get into business to manage or lead a large group of people. Often they are visionaries, technologists or dreamers with an idea they think others would want buy into.

They are often focused on building their idea and have little to no business experience at the outset.
As the product or service begins to generate revenue and sales grow, more people are needed so the business can function and grow. Adding external investor funds grows the business further, allowing increased resources and capability and a stronger team.

The result is the product turns into a company, which is often what the founder wants, but he or she has no idea where the company should go. There are now people in the business the founder needs to be responsible for. It’s no longer just a one man band or an idea. These new people ask for things the founder often has no idea how to handle or doesn’t care about. The realisation of who a CEO really needs to be sets in.

Successful startup CEOs take a different approach and it’s the way they succeed that can be unexpected.
The successful CEO’s daily activities involve more tactics and sales than strategies and marketing. The successful startup CEO is determined and headstrong, but very open to hearing advice. They are continually optimistic but not unrealistic. They’re tough but fair. They know innovation isn’t an isolated idea, but creativity backed by relentless execution — and at the heart of it all the business exists to meet the needs of its customers.
The differences between a successful startup CEO and lower-performing peers aren’t superficial or incremental. While no one aspires to fail, some just do a better job. It’s also important to note this isn’t a statement about CEOs as people, it’s a statement about them as CEOs.

It pays to bear in mind that CEOs from large companies don’t often make great startup CEOs and vice versa. It may not seem fair to first time entrepreneurs, but wouldn’t you rather bet on a horse that has been in races before and won than an unknown in his or her first race?

If you’re thinking being a startup CEO, here are some key characteristics that lay the platform for success:

They know the devil is in the detail
Great startup CEOs don’t rely on optimism alone, they manage every detail and oversee every step in processes that are critical to success. If the company is on the verge of a major sale, a good CEO has visited the customer while the lesser CEO has not. Lower-performing CEOs are far more optimistic that things will work out well in any situation. They expect the customer to buy even though they haven’t met them.

They are coachable
The great CEO does not universally follow advice, but considers it. They may argue or discuss with energy and passion, but they are bloodhounds for the truth regardless of its origin. Lesser CEOs report back all the opinions they have heard about a subject. They don’t truly evaluate opinions other than their own and always see their view as the best. They tend to ignore external advice regardless of the source.

They validate
They tackle tough questions with a ‘data first’ approach, they lead with discovery and testing and seek understanding from prospects and customers. Ask a great startup CEO about an aspect of the company’s strategy and tactics and you get the results of tests and discovery. They assume very little inherent understanding of the truth and though they usually have a great deal of this understanding, they like things proven. The rock star seeks every advantage that understanding provides and only then do they turn their attention to the best possible execution to realise advantage.

They do stuff
The great CEO will always ‘out execute’ lesser peers, large or small. Great CEOs believe tactics are as valuable as strategies, lesser CEOs are usually only focused on strategy. The irony of these characteristics is that both great and lower performing CEOs can be smart and effective leaders. Lower performers could succeed with an emphasis on action over thought, truth over opinion and attention to detail. The lesson for lower performers is the obstacles in their way are largely self imposed.