Do startup founders make great CEOs?


Calling yourself a CEO is easy. All it takes is getting a stack of business cards made, and slapping your name and the CEO title on them. There is, however, a journey that a founder has to take to become a CEO. So to ask the question “Do founders make great CEOs?” is perhaps uninformed because, for a startup founder to become a good CEO, he needs to actually learn how to get there.

There’s an excellent post by venture capitalist, Ben Horowitz that highlights the importance of teaching founders to be CEOs. Because really, being a CEO is an entirely different ballgame from being a founder and it’s something that needs to be learnt.

It’s all in the genes

Much like humans, every organization has its own unique signature ie its very own special DNA. This has a lot to do with the vision of the company when it first starts out. And this distinctive DNA can be seen very clearly as the difference between Google and Microsoft.

Google is all about innovation: doing new things, allowing people to experiment. On the other hand, Microsoft has been founded on the basis of mass market production, which is why most of its jabs at innovation haven’t been altogether successful.

It is my belief that if company culture is rooted in innovation (and most startups are), then a founder-­turned-­CEO is probably the best person to take the company to the next level. A hired CEO can maximize product cycles but only a founder CEO can initiate them. Horowitz says that it’s easier to teach a founder CEO to maximize product cycles than it is to teach a hired CEO to initiate them.

Management vs Innovation

Transitioning into a CEO means being able to strike the right balance between management and innovation. You can’t have one or the other. It has to be both, in the right amounts.

And for that, the founder needs to step out of the much­loved honeymoon period. The honeymoon period is when the founder is still hung up on the lean startup principles, when there are just a few people working with or under him and of course, when there are clients to romance, convince and convert. That phase is not permanent, and it shouldn’t be. Because at some point, an MVP won’t be enough. Eventually, there may just be a 100 people in the organization. And sometimes, if you’re really lucky, clients won’t need to be seduced (as much) anymore.

But when it does come to this, there will be a million other things to be concerned about. This could be anything ranging from Can you manage salespersons? to Are you able to delegate duties? to Do you have what it takes to make the hard decisions? This is the management side of things, and something that professional CEOs are good at. It does not mean you cannot make the transition from innovation to management and innovation. It all comes down to how well you can handle yourself and the company under such situations.

It’s better to burn out than to fade away

Aside from the somewhat misconstrued connotations of this line by Neil Young, I think it fits quite perfectly here. If things aren’t working as they should, then don’t go on pretending like you’re okay (while your startup slowly fades into nothingness).

Being aware of one’s flaws is probably not something entrepreneurs are inherently gifted with. Considering they put all their energy and passion into a product that actually made it, it may be sometimes difficult to accept when something is wrong with it. This lack of mistrust in oneself is probably a startup founder’s best arsenal but can be his worst enemy when the organization is scaling up and things look like they may go south.

The best solution would be to get a mentor. Ideally, if you’re being funded, your VC should be someone who is experienced in your industry and knows how things work. But this might not always be the case. So, reach out to CEOs who have made it. Advice from experienced hands will greatly help you in making the switch to CEO. Additionally, listening to feedback from employees and peers and keeping an open mind to whatever comes your way, will only be beneficial for you in the long run.

Stepping down

Not every founder makes for a great CEO. And there is nothing wrong with accepting that. The journey from founder to CEO is lonely and tiring. And it involves learning an entirely different set of skills, some of which you may not be entirely comfortable with. If this is the case, then be humble and know your limitations. Step down for the benefit of the product you built. This does not always mean you have to leave the company entirely. It could also give you space to focus exclusively on the innovation side of things; the things you’re naturally good at; the side you want to be on.

In the end, you’re responsible for your story; a story that’s entirely unique to you and your product. Find out what works for you and keep at it. And never, never, never be afraid of admitting when you’re wrong.

Let us know what your thoughts are. Are you a founder or a CEO? How has the one helped the other?

Image by Alexander Steinhof via Flickr

Surekha James


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