CEOs: The devil’s in the details
The term “CEO” conjures up these images of brave, passionate, charismatic leaders setting grand visions and winning the hearts and minds of customers, investors and employees alike. I hate that 3 person startups routinely have someone called “CEO” (kinda seems ridiculous at that stage). But whatever… every organization of any size must have a leader.
It is a truism among VCs that we invest in teams. Certainly for us at Real Ventures – since we invest at the seed level the bulk of our decision is based on the team – and the bulk of the team assessment is based on the CEO.
What do we look for in CEOs? I’ll post something more detailed on that shortly, but at a high level we look for:
Passion - You lead a company solving something you are so passionate about you have to make it happen
Domain experience – You know the industry dynamics, players, etc.
Prior startup experience – startups are tough. Better learn them on someone else’s dime before doing your own.
Customer focus – it’s not about flashy marketing, it’s about killer product and service. That orientation starts at the top.
Command of the details – There is no place in a startup for high level strategists. Yes, you need that. But every person must be execution and detail oriented. Again – that starts at the top. If the CEO is sweating the details, everyone else will.
What got me thinking about this was a great story about Steve Jobs’ attention to detail. It’s short and I recommend you read it. If he can have this level of focus, we all can. After all, the devil’s in the details.
In the 2-4 person startup stage, I agree that appointing these titles seems a bit "formal". However, I do think it gives the team direction. Although assigning them initially seems strange, it does make sense. Why not assign the CEO, CFO, etc. early so that when you get to be a 10, 20, 30+ employee company you don't have to start assigning titles. Furthermore, as the company grows, new hires will immediately understand (at least to a broad extent) what each management personnel does. I guess my overall thought is that, if you don't immediately assign these titles, when will you?
Two issues:
1.) Often the people who hold those titles at the start will not be the same people when the company is much bigger. So, that means a demotion or leaving the company. Can be handled much easier if they don't have a C title in the 1st place.
2.) Culture: Titles start to matter and that's bad.
Good points Mark. I would agree with you about culture and say that whether or not to initially assign titles has a great deal to do with how the founders want the company culture to evolve.
Another great post. Bang on.
I'd add crazy and ambitious!
I've encountered a 3 person startup before that was the CEO, COO and CTO. You're right, it's ridiculous.
I agree it sounds ridiculous, but is it ridiculous? Assuming a start-up needs 3 people, as Mark points out someone needs to be designated the leader when making decisions on the business so, I'd have to say CEO may sound ridiculous but you need it. Call him President (?), but it implies the same duties. And for a tech start-up the CTO is pretty important too. Decision in the business on the product need an owner and that would be the CTO. Call him the Product lead, or lead architect, but again the duties are the same.
However I have to 100% agree WTF does a 3 person company need with a COO. If the CEO can't handle COO duties with only 3 people in the company, you likely need a different CEO.