What’s More Important: the CEO or the Idea?

Jayson DeMers
Jun 24, 2020 · 4 min read
Image for post
Image for post
Photo by Frank Vessia on Unsplash

There’s no doubt that a startup’s central idea is crucial for its eventual success; if it has no originality or innovation, or the idea doesn’t resonate with a target audience, it’s bound to fail. Of course, you also need to have a good CEO in place — someone who can take charge, oversee the execution of that idea and lead the company to success.

But which of these is the more consistent predictor of success: a good idea or a good CEO to support the company?

Startup failure data

However, other factors tell a different story: Roughly 29 percent of companies examined in the study cited running out of cash as a chief concern, while 23 percent cited not having the right team as a core problem and 19 percent cited having been outdone by competitors.

A CEO was directly or indirectly seen as being responsible for all these issues. And equal blame went to CEOs and the ideas they supprted, for the companies’ being out-competed by competitors. Other common issues, such as pricing/cost, poor user friendliness and products lacking a business model, might be attributed to both the idea and the CEO — but tend to be dependent on a CEO’s control.

Venture capitalist perspectives

While other VCs, in contrast, will probably check your business plan and care about your idea, they share a similar mentality about the importance of a strong CEO at the head of a business. Silicon Valley VC and “super angel” Ron Conway has noted, “When you’re talking to me, in the first minute I’m thinking, ‘Is this person a leader?’”

Other considerations

Therefore, CEOs get the edge in importance when the perspective used is that of logic.

The problems

CEO sampling. Russell Reynolds Associates, working with Hogan Assessment Systems, surveyed more than 700 CEOs globally to understand what makes a “good” CEO. As you can imagine, there was significant variability, but two characteristics highlighted were the “essence” of the CEO personality: a tendency to act on promising opportunities, and a willingness to embrace calculated risks.

Of course, there’s a significant problem with studies like these or any study that purports to dissect a CEO’s role in a company’s success. We’re looking only at CEOs who volunteer their information, are in a relatively stable place and are high-profile enough to be noticed. What about everyone else?

Leadership styles. There’s no one type of leadership or direction that works better than others. Some successful CEOs are aggressive; others are passive. Some are perfectionistic and demanding; others prefer to delegate and trust others to get the job done.

This means that there’s no blueprint for what makes a “good” CEO, in contrast to an idea, which can be measured based on its projected income, market demand and other factors.

The day to day. The popular podcast Freakonomics Radio recently delved into “The Secret Life of CEOs,” an exploration of how CEOs function within a company. As the podcast’s host, Stephen Dubner, pointed out, we tend to focus on CEOs only when something very good or very bad happens with the company.

Accordingly, we make judgments and understand CEOs only in the most extreme contexts.

So, again, which is more important: the idea or the CEO? Though ideas are fundamentally important, I have to give CEOs the edge. Data from startup failures, VC and angel investor preferences and the impact that CEOs can have on ideas all adds up to make CEOs and business leaders more important than the ideas they’re meant to represent.

Does this mean your idea doesn’t really matter? Of course not. But it does mean you’ll need to make sure it has a strong leader to execute it — and that just might be you.

For more content like this, be sure to check out my podcast, The Entrepreneur Cast!

The Startup

Medium's largest active publication, followed by +773K people. Follow to join our community.

Jayson DeMers

Written by

CEO of EmailAnalytics (emailanalytics.com), a productivity tool that visualizes team email activity, and measures email response time. Check out the free trial!

The Startup

Medium's largest active publication, followed by +773K people. Follow to join our community.

Jayson DeMers

Written by

CEO of EmailAnalytics (emailanalytics.com), a productivity tool that visualizes team email activity, and measures email response time. Check out the free trial!

The Startup

Medium's largest active publication, followed by +773K people. Follow to join our community.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store