Authenticity, Decisiveness, Compartmentalization — Three Underrated Founding CEO Skills

I started a company in early 2011 and like most first-time founders struggled like hell for most days with it. Going in, I already knew it would be hard work and I thought I went in eyes wide open. But as most first time founders learn quickly…and then repeatedly, getting your teeth kicked in all the time makes you really question the quality of your eyesight.

What makes it so hard? They’re right — the #1 thing that makes the job so hard is your own mind messing with you and your emotions running amok like uncontrollable rugrats at the park.

But the other thing, of course, is the yawning skill gap between a halfway-competent CEO and you when you first get started. There’s no psychological dysfunction needed, thank you very much — incompetence is where we’re getting started.

But over the next four years, I learned the job. Bit by bit, and with the help of sheer will, investors, advisors and a lot of alcohol, I acquired many of the skills needed to be a competent operator at the 50–75 people scale. Zuck-like growth it ain’t, not by a long shot, but growth it was to be sure.

But I also realized along the way that several of the skills that I struggled to master, found to be wildly important — and am still learning! — had received underwhelming coverage in that very narrow and specific media genre of early-stage-startup-advice-from-VCs-and-founders.

So at the risk of making a fool of myself — a risk that like startup risks I’m frequently happy to take — here are the three highly underrated CEO skills for first-time founders.

Authenticity: I work at Square now and wound up here through an M&A transaction for my startup in 2015. Overall I’m happy here and have been pleasantly surprised with the transition from small startup to big(ish) company. But in March 2011, as I was wading through the shit and muck of raising my first seed round, I couldn’t help but sneer when TechCrunch posted a breathless story entitled “Jack Dorsey & The Golden Gate Bridge” and discussed “a remarkable statement by a young CEO who is finding his voice and trying to impart it onto his company”. It was about Square’s CEO Jack giving a speech at the company all-hands that had conveniently made its way onto the site as a standalone news article. Must be nice to get fawning coverage for holding a meeting to talk about a bridge bro, I thought, and got back to singing for my supper.

Talking about this bridge could not get me featured on TechCrunch, then or now.

And yet, within months, armed with $1M of investor cash and a handful of people on the team, I had come to realize that Authenticity was a highly underrated skill for an early stage startup CEO. TechCrunch was breathless for a good reason. “Finding the voice”, despite my prior cynicism, turns out to be incredibly important.

I won’t try to go all Psychology Today on you here and will instead offer a no-brainer rule — Be Yourself. As ridiculous as it sounds, this is hard for first time founders who are frequently struggling with Impostor Syndrome, having just gone from a well-oiled cog in someone else’s machine to someone trying to build a machine from scratch with real cash and real livelihoods hanging in the balance. In a matter of months. It looked like a milestone achievement on the outside but was absolutely terrifying on the inside. The response, predictably and frequently, is less than mature. You’ve heard stories of founders masking their insecurities with bluster. You’ve heard about founders that read the Isaacson book and start to pretend like they’re the Second Coming of Steve Jobs, a miraculous transformation that occurs quickly and is correctly mocked by the people around them. You’ve heard of founders trying to become what they really can never be.

Trust me, I’ve been there. It doesn’t work. It took me at least a year just to “find my voice”. It took me another few years to be comfortable and authentic as a leader and manager. And it has served me in spades — I’ve realized that I’m profane, verbose, snarky and hands-on. I am mostly plain-spoken and direct with people. I have a decent poker face. I hate firing people and despite having done it many times it never gets easier for me. I’m ok being vulnerable in front of all sorts of people. I excel at Tactics and am comfortable with Strategy but have to take active effort to articulate and sell a Vision with conviction. Not very Jobsian, indeed, but I know who I am and I’m OK with where I am on the journey towards being a better manager and leader.

Why does this matter? It matters because candidates, employees and investors can smell inauthentic from a mile away. Authenticity disarms candidates who have their bullshit detector set to 11. Being authentic, open and vulnerable in front of the team allows you to work around your flaws without feeling like a fraud. It gives everyone else around you the permission to help you fill your own gaps since your own ego is healthy enough to acknowledge the existence of gaps. It creates a bond of trust with the team because they know how to read between the lines and understand your body language over time. It makes hiring easier. It makes retention easier. It eases the Struggle a tiny bit by eliminating the mountain of bullshit standing between you and everyone else.

Be Authentic. Be Yourself. As they say, everyone else is already taken.

Decisiveness: Let’s rewind back for a moment to the time lovingly referred to as filled with shit and muck above. It was December 2010, my co-founder at the time had bailed on the startup (a different story for a different time) and I was desperate to find a toehold as a solo founder. While the Y-Combinator deadline had come and gone, through a serendipitous set of events I had run into the AngelPad folks and they were excited about what I was working on. As with all accelerators, they were offering a small amount of real cash in exchange for a “large” amount of fake equity in my stupid little 1 person startup. Everyone in the business knew the tradeoffs — the valuation, as it were, was terrible but you didn’t do accelerators for the immediate valuation. If you had 6+ years of startup experience like I did, you maybe didn’t even do it for a lot of advice. You did it because the structured pressure cooker of 8–10 weeks focused on building and pitching the startup alongside other smart founders and experienced angel investors, culminating in a Demo Day with 100+ investors, could accelerate fundraising and maybe even help a bit with forward valuation.

So the offer was issued in writing and sat there in my inbox, waiting for me and tormenting me.

Today, I could ponder the issue for a few hours and make a decision one way or another. That holiday, as everyone drank their eggnog and opened their presents, I struggled neurotically for days on end. Was the loss of equity worth the payoff? How precious my fake little equity was, I must protect it! Was I going to be surrounded by a bunch of 22-year old yahoos who were clearly smart and technical but had never held down an actual startup job? To get to a decision, I called on a couple of smart advisors and friends. And then a couple more. And then yet more. A week later, I tallied the Yay and Nay votes on a piece of paper and realized I had called on FOURTEEN goddamn people for this one decision, a decision that looked incredibly trivial a few years down the road but felt so existential in the moment.

And to add insult to injury, there were 7 Yes votes and 7 No votes. I guess the lord works in mysterious ways, or something. I’d have to decide this one on my own and after yet more hand-wringing I did and signed the contract. It all worked out fine and those AngelPad relationships have been valuable 7 years in.

It took years of work to get better despite clear self-awareness. It took many more gut-wrenching situations. I’m still working on it, 7 years in.

High-quality and rapid decision making — especially in the face of near-complete uncertainty — is so absolutely crucial to the success of a startup. Especially in the early stages, when the many degrees of freedom loom over you, ironically, like tyrants. Asking you to stop being incompetent and pick one, any one for goodness sake instead of sitting on your hands. We talk so much about product-market fit, hiring, fundraising and scaling and yet we forget that the root of achieving success in every single one of these areas is the founders’ ability to pull the trigger quickly and repeatedly with a high batting average — yes, those are mixed metaphors and no, I don’t care. A useful quote to consider here was found in the great Michael Lewis longread “Obama’s Way” when he quoted and explained Obama in Vanity Fair: ““Nothing comes to my desk that is perfectly solvable,” Obama said at one point. “Otherwise, someone else would have solved it. So you wind up dealing with probabilities. Any given decision you make you’ll wind up with a 30 to 40 percent chance that it isn’t going to work. You have to own that and feel comfortable with the way you made the decision. You can’t be paralyzed by the fact that it might not work out.” On top of all of this, after you have made your decision, you need to feign total certainty about it. People being led do not want to think probabilistically.”

If you are a naturally decisive person, thank your stars. But for the vast majority of you who are starting companies and expect to struggle like the rest of us mortals, consider Decisiveness as a standalone skill that is almost sui generis. As Harry S. Truman was fond of saying to the point of putting a damn sign on his desk in the Oval Office — “The Buck Stops Here”. Act accordingly.

Compartmentalization: As the founding startup CEO, shit will get thrown at you from every direction, all the time, without any prior warning. Employees having a blowup amongst each other, heated debates amongst Founders, potential investors pulling out in the very late stages of a financing, large customers cancelling or refusing to pay their bills, other customers trashing the product online — all in a week’s work.

While there are some that are preternaturally calm in the storm, the rest of us tend to wear our emotions on our sleeves. After all, you just watched your baby get called butt-ugly by a stranger on the Interwebs. How the hell are you supposed to sell a candidate to join the company 10 minutes after that? How the hell do you go from learning you just got sued to leading a company all-hands?

You do it by being able to effectively compartmentalize — by being able to fully acknowledge the emotion felt in the moment (let’s face it, it’s almost always anger or sadness), label it openly and explicitly as the emotion you feel (also a technique taught in mindfulness, unsurprisingly), park it aside until you can return to it — and get on with the next thing at hand without being paralyzed by the prior thing.

When I first started, one tough email with bad news in it could distract me through the whole day. I’d keep obsessing over the situation, turning it over in my head, thinking about my response — and all of this while in meetings with other people. I may have made eye contact in the room but I was hardly there, and it showed. Three years in I could have seen us listed as a co-defendant in a class action lawsuit in the mail the night before (true story but also for another time), wallowed for an hour and then gotten on with other tasks. I got there by being able to compartmentalize better.

In fact, the great Michael Lewis essay serves us in good stead again here — at some point he wonders how a president handles the same problem with much, much higher stakes than those of us building fledgling software companies — he wonders in the article, “In the span of a few hours, a president will go from celebrating the Super Bowl champions to running meetings on how to fix the financial system…to sitting down with the parents of a young soldier recently killed in action. He spends his day leaping over ravines between vastly different feelings. How does anyone become used to this?”

The thoughtful and beautiful response from Obama, which helped me when I first read it in 2012 and may help you now, leaps off the page with vulnerability and honesty. He says, ““One of my most important tasks,” he’d said, “is making sure I stay open to people, and the meaning of what I’m doing, but not to get so overwhelmed by it that it’s paralyzing. Option one is to go through the motions. That I think is a disaster for a president. But there is the other danger.”

“It’s not a natural state,” I had said. “No,” he had agreed. “It’s not. There are times when I have to save it and let it out at the end of the day.””

Of the three skills listed here, compartmentalization is definitely the hardest for me to master and the easiest for the lizard brain to trick me with. But the journey to improve continues, one day after the next.

Godspeed to you all.