As a VC, I have the opportunity to speak with and invest in exceptional entrepreneurs. They’re often uncommonly passionate about their ideas, with versatile skillsets and valuable insights or background that allow them to challenge the prevailing way of doing things. Some are already successful salesmen, product managers or CTOs, but though they do hold domain-based accomplishments, they’ve rarely had the chance to build a company before. Granted, some have been entrepreneurs in the past (i.e. they’re serial entrepreneurs), but still, at some point during the process of building a company, these founders all face the same challenge: the need to transition from being ‘just’ a start-up founder into a CEO role, which is quite different in terms of skillset and responsibilities.
To many entrepreneurs, ‘CEO’ (chief executive officer) is merely a title, and doesn’t carry too much meaning. The reality is the contrary: being a CEO is the most difficult and important role. Building a successful organisation, developing cutting-edge technology, delivering competitive software at a global scale: this plethora of activities each brings its own challenges. What’s more, starting a company with a small team and eventually running it as an organisation of 100+ people is likely to be uncharted territory for most people. When things don’t follow the expected trajectory, the responsibility for not meeting the right objectives, and for making the wrong choices, ultimately lies with one person only: the CEO.
So, how can you step into the shoes of the most effective and successful CEOs out there? Certainly, having a good mentor helps a lot, as does having a good investor who can advise and support you in difficult times. Still, as they’re all able to share tools and frameworks that work, the guidance will consist entirely of on-the-job training, building your self-awareness and development first and foremost into a leader. Although taking that leap is in most cases a natural progression as the company scales up, it’s important to focus primarily on leadership skills, which (from my experience as an investor) are very much related to the success of any start-up.
Over the years, I’ve had the opportunity to watch several companies and to get to know a number of entrepreneurs who, as exceptional CEOs, managed to elevate their start-ups into successful companies. Sadly, I don’t have a guidebook to share, but I do believe that acquiring and practising a few leadership skills as outlined below will set many on the path to success.
What makes a good CEO?
1. Good communication of unique and powerful vision - though the most crucial goal for a start-up is to deliver a product not only commercially valuable but X times better than the competition, people are undoubtedly the most important element of achieving this. A good CEO - a leader - needs to learn not only how to articulate themselves well, but also how to deliver the most compelling story to attract the right talent and keep people motivated when things fall apart. So, try to be crystal clear on your vision, both internally (to motivate your team) and externally (for hiring and fundraising the capital from the right investors). From my personal experience, hearing a crisp story is a good indicator that prompts one to learn more.
2. Independent thinking and resilience - good CEOs have strong convictions and the courage to achieve some of the most audacious goals and change the way things work. It’s not easy! As you might often encounter resistance, it’s crucial to develop the ability to become resilient to setbacks and failures. The ability to recharge - often mistaken with endurance, in my view - is neglected by many. Being able to sustain a high level of energy, and to cope with an ever-changing environment and circumstances, is a must. Otherwise, it’s easy to fall very quickly into dysfunctional behaviour that harms your colleagues and the company itself.
3. Passion and the right kind of ambition - smart people (you need plenty of them) like to work for those who are hard-working and passionate, not only about the things they do, but about the people around them. It’s undoubtedly a huge misconception that good CEOs are ruthless, self-interested and insensitive. Quite the opposite! Good CEOs - good leaders - care deeply about the people they work with, and are happy and willing to sacrifice their economics to reward their employees instead. The rule here is simple: if you demonstrate how much you value your team, it will open numerous possibilities for the people around you to show a similar appreciation for what you are trying to achieve.
4. Prioritisation, focus and execution - with limited resources in times of rapid growth, a CEO’s ability to prioritise is critical. Amid all the noise - countless problems requiring attention, new initiatives coming in - it’s easy to be overwhelmed. With the uncertainty over the outcome and a high chance of spreading yourself too thin, it’s essential for all leaders, CEOs or team managers to recognise the challenge, step back, assess the best scenario and decide what has to be done first. Making yourself and your team busy without getting closer to achieving an objective is sadly exposing your company to the risk of failure.
5. Decision-making - in start-ups with many unknowns, such as on headcounts, competitors, product development, customer acquisition or anything else, many things can change rapidly, and so do the priorities. For a CEO, it’s critical to have the best possible view of what’s happening both internally and externally. All your daily activities, team meetings and reports should provide you with the right data and understanding, so by the end of the day you’ll have a complete picture - and therefore the ability to make the best decisions on behalf of your team and the company. So, before setting up new priorities as the CEO or team leader of a start-up, you must evaluate the ever-changing situation, adapt (setting new goals if needed) and lastly maintain the ability to monitor what’s going on (create a weekly CEO report, for example).
To our portfolio companies, we often recommend a simple cheat sheet that can be used for your weekly/monthly meetings with your executive team or investors if you wish to keep them updated. You’ll find it here: CEO’s Operational Framework (template), and you can feel free to use and adapt it for your own needs.
There’s probably a lot more to mention on the topic of how to develop leadership and become an exceptional CEO, but if you keep on practising these few skills I’ve talked about above, it will certainly set you up for personal success as well as that of your company. What’s more, because becoming a good leader is extremely important to engrain in every founder we fund, it’s something we’ll be sharing more as an update to this general post.
I hope this is helpful! If you liked this post, feel free to connect with me on Twitter or just leave a comment below - I would be delighted to answer any questions.
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