Startup general interest

The five roles of a startup CEO from founder to leading an IPO

By April 22, 2014 4 Comments

It’s well understood now that at many of the best startups the founder remains at the helm until the company is very large – Facebook, Google, Microsoft and Oracle are four great examples. It’s also pretty well understood that founders have to be incredibly adaptive to stay effective as their companies scale. This description of changing requirements from CEOs is a helpful guide to anyone involved with fast growth startups (credit Venturebeat):

  1. Innovator – at the beginning the CEO should be great at generating ideas and acting on them
  2. Entrepreneur – then the CEO must be great at marshalling resources, raising money, staying resilient, and getting stuff done at pace
  3. Builder – as revenues start to grow the CEO has to build a team and processes so sales can be repeated and the business can grow
  4. Operator – then as the business achieves scale the role of the CEO shifts to being an operator (careful not to lose the innovation though..)
  5. Enabler – finally, once the business becomes very large with stable and growing profits the focus of the CEO shifts to enabling the organisation to keep humming all around them

We invest at the very early stages and look for our founders to excel as innovators and entrepreneurs first with the potential to be great builders. We hope they will go on to become great operators and enablers but it doesn’t make sense to think too much about that when the companies are still tiny. For a long time now I’ve thought that the biggest challenge founders face in adapting is the need to ditch the stubborn-ness that served them so well in the early stages. Gail Goodman, the founder and CEO of Constant Contact, which provides online marketing services to small businesses and has grown to some $285 million in annual revenue since it was founded in 1998 put it like this:

being relentless in your perseverance can eventually become an obstacle to change … Every founder [eventually] needs to face two ugly truths. The first is that you’re doing something wrong all the time. The second is that your flaws are harming the team.

The trick is to maintain self-belief through this realisation.