We entrepreneurs: we’re starters.
We start….eh….start-ups, after all. We like to invent things. Set fire to one market while we rebuild others. We disrupt. Make our users love us while we piss off the competitors who never saw us coming. We’re good fun that way.
But somehow, over time – before we fully scale or perhaps before we flame out, some of us grow weary of what we’re working on. Our work ethic remains intact although our passion subsides just a little. We all of a sudden find ourselves looking for what’s next, what impact we can make, what new problem we can solve, what idea we can manifest. So, we jump ship and go do just that, somewhere else. And then we do it again. And then again.
That brand of founder is known as a serial entrepreneur in recognition of our infatuation with the founding process. That’s what we do – we start. And when we realize (or subconsciously) sense that we are no longer starting, we get uncomfortable. We lose interest. We bail. Because in the journey of a new venture there is a stage within which we cannot pinpoint a moment when we come to understand that we are now simply running a company. We are no longer founders, we have become business leaders or CEOs. We are no longer launching but rather delivering a legal entity to its destination. And it’s honestly not all of our collective jams. But it could be if we came to be equally inspired by the new landscape before us.
Our transition from founder to CEO is an important one because while they are jobs that do intersect, they are mostly different roles. Our priorities, functions and skill sets to succeed change dramatically. The scary part is that there typically is no milestone to mark this transition; we transition through a series of abstract realizations and an emerging set of emotions that signal our environment is noticeably different. The resulting discomfort that I spoke about moves many of us to escape. Some of us adapt, knowingly or not, and ultimately succeed in place. Yet there are others remain indifferent to these internal signals and continue to try to run our companies with a founder mindset, with only limited success.
I can keep you here for an exceptionally long time while I compare and contrast the roles of founder and CEO but I’m going to raise your consciousness on three major elements – the most critical shifts in mindset we absolutely must accommodate to keep us inspired and to enable our continued performance.
Embrace new challenges in Marketing and Growth.
Ah, the excitement of those early days – experiencing traction play out in 2x growth in short cycles – are indeed hard to surpass. Acquiring new customers is difficult when you don’t have much money. Yet, from a marketing mechanics perspective, it’s easy, so long as you have a decent proposition and a product that actually works. The truth is, in your initial stages you have the luxury of a vast ocean of potential customers of your target market profile before you, and they have yet to hear about you. And to get a bunch of ‘em on our side that’s all you have to do – tell them you exist – and cheaply. In those early days, cost effective awareness is the uncomplicated mantra.
Those oceans of customers are made up of small lakes. You sequentially fish each one dry. And when you’re done, things do start to slow down. You have achieved awareness, so now your mission becomes to go back to the same lakes and try to catch more fish, only with different bait. To get the next round of customers you have to do two things: 1. Understand their initial hesitancy and 2. Address it. You might need to change your product, pricing and likely your messaging, your creative, your media choices. Any or all of the above. It’s a brand new skill to augment your learning and react more insightfully to your customers’ needs and emotions. Your commercialization strategies have to evolve in tandem.
But wait, it gets worse. When your growth has reeeally slowed within your target market (much to the dismay of your investors), you have to develop new markets of customers who are of a different profile than the ones you were previously talking to. More learning, more strategizing on how/when/where to communicate. This is where you need to be conscious of your positioning and the brand you are now mandated to build. You can’t just deploy very different messages out there – you’ll confuse the market. You have to understand what your core DNA is about – the central themes and elements that make up your brand, which becomes the thread that unites your now disparate executions in the market. And that’s another skill once again. A tough one if you’ve never done it before.
The last phase of communication planning is one where you’ll know you’re a real company. It’s when you’re commanding sufficient business to agitate one or more of your more established competitors who as a result begin to dedicate marketing and product dollars to discredit you. Yup, you now need to pick up the pace because every idle moment empties your funnel at an accelerating rate. The days of racing forward become intermixed with ones of suddenly trying to keep pace, leaving you with less to celebrate and feel accomplished about.
It’s great to have a passion for growth but to truly scale and deliver on the promise of your company you have to welcome the ugly parts of marketing – literally begging and fighting for each customer. It’s a brand new challenge that comes with less embedded ego-stroking moments. I personally find these strategy tests fun to sort through, so much so that I teach university courses on this stuff on the side. But I will say, if you don’t have the know-how to adapt your marketing approach by lifecycle stage, you’ll make a lot of mistakes and start to hate your life.
Divide your job into three parts.
Ok, well actually, you’re multiplying your job by 3 but I was trying to make it sound more appetizing. Oh, and directionally, the parts should be somewhat equal but that’s up for debate. Point is, each one is material and vital.
- Deliver results in the current cycle with your current offering.
When you first launch your product (or service), your focus is on the fundamentals; you need customers and/or sales. Now. You’re looking for traction and marketplace acceptance. All 1, 2 or 4 of you in the company are dialled in to execute simply that. You identify your metrics and install your barometers. You do, and then you measure.
Tragically, though, many of us develop this engrained habit to prioritize exactly that, perhaps subconsciously assuming that scaling is simply an expanded version of traction. This vortex of focus becomes even further intensified when we secure investors of any kind who come with a pre-installed fixation on performance metrics. As a result, landing the plane in the current financial cycle becomes more and more the context for much of our day-to-day business activity, and perhaps the root cause of our failures and missteps. For we overlook the imperative to address the other two necessary functions.
- Incubate new business models
I’m not talking about modest product upgrades or finding new customers. I’m talking about how you are going to make money five years from now (hint: it’s not doing what you’re doing today at a larger scale). Remember how you just spent the last several years of your life – ideating a marketplace innovation and manifesting it into reality. It took resources of all kinds and sweat to upload it and you’re faced with a few years ahead of you before you make real money at it.
If you genuinely want to scale your company, you’ll need to do it through continued innovation. And you need to wrap your innovation around a long term vision that sounds like something way bigger than what you’re currently doing. Because in a few years those lakes I told you about will be fished dry. And you’ll completely stall your growth if you don’t have something as transformational as your original product ready to go. Said another way, becoming a serial entrepreneur within your own company is an important task of a CEO.
Here’s one test I like to conduct to see if a company has its entrepreneurial mojo intact. I’ll ask you to take note on the job of how you complete this question whenever it’s posed: “how do we ______________?” If you typically answer that question with some kind of number that represents goals and metrics, you’re probably stuck in job #1 above and being short-sighted. The best answers to these questions are all in the context of people (customers!) and the help you aspire to provide for them them to complete tasks or solve problems.
Adding value to these customer endeavours is the foundation of real growth; imagining opportunities that are so profound you can’t yet begin to put numbers to them. And that’s what you should be spending as much as a third of your time on – re-igniting the forces that got you into this career to begin with.
- Build your infrastructure.
I think this is my favorite one perhaps because it’s consistently the most overlooked. I’ll say this – you can attribute most sources of employee dissatisfaction (affecting motivation and performance) to this neglected areas of management; one you’ll need to take on, even while you focus on job #1 and dabble in job #2.
Oh, some of this stuff does get done, but is usually born out of crisis, or syndicated to other departments (HR, IT) or lowest levels to figure out with very limited effect. Nope, very few organizations take on a structured approach to consistent infrastructure development, led from the top. Infrastructure is a catch-all for a number of organizational elements that play critical roles in the well-being of our employees and performance of our companies. I’ll survey the key ones here:
Culture. They say if you don’t deliberately incubate a company culture, one will organically be created. And it might not be one that you want. Cultures are almost impossible to change once built without switching out half your staff and leadership team. You have to envision it, own it, install it and live it. I identify many of the cultural components in this article. It’s not a coat of paint you ask HR to apply. It’s the DNA of what your company is and how you operate.
Structure & Process. Levels, reporting relationships, job standardization, policies, coordination of work. This is the machine of your company and is intertwined with your culture, which has so much to do with how your company conducts business day to day. As a barometer, you can assume that once you average daily meeting time crosses about six hours you can be sure you’re already screwing this one up.
People. Relationship building, recruiting, development, benefits, rewards. And so much more. Also connected to culture. We complain that people don’t bring enough ideas and performance so we want better. Yet we spend little time on any of these matters and then suddenly ponder meaningful questions such as ‘why are people so unhappy?’…or ‘why are there no black people here or women in leadership positions?’ like you have no idea how all this occurred and have even less of an idea of how to fix it.
Decision support systems. I like to ask this question of leaders who think their company is modern and agile: “how many of the questions that you could ask about your company can you answer via a query from any device in any location?” If the answer is south of 80% (and it will be), congratulations. You’re well on your way to becoming yet another glacial-paced corporation chock full of people who spend most of their day building spreadsheets and presentations to do just that. And then tell their friends and families how their work has no meaning.
Networks. Establish, upgrade and lock in your core business partners through thoughtful search and selection. Agencies, lawyers, PR specialists, accountants all play key strategic support roles. Make sure you have a solid, stable and elite network of partners, which may not be the ones you started with.
Real estate. Now this one start-ups in particular do think about but I’ll list it anyway. I’ll simply remind everyone that the physical workplace is a function of culture, process and performance as well as well-being and should be strategized as such – with the involvement and support of a CEO.
There are two main reasons why those in the big chair don’t take on leadership roles across infrastructure. The first is quite basic – lack of interest. I’m just not completely convinced that we care that much about, for example, wasting the time of our employees to bother taking on process improvement projects. Take meetings, for example. We have known for decades that they are not effectively managed, yet we do nothing about it (other than to occasionally ban them aka meetingless Fridays which continue to phase in and out of vogue with no material impact). At the core of the issue is the sentiment that we have little interest in making time a precious resource that must be preserved to invest in the most meaningful activities. We treat time like it’s limitless and simply demand our employees invest more of it to compensate for our dysfunction.
Those who write about meetings behave as if the gap between current and desired behaviour is knowledge. Pshhhh. Probably ten thousand articles have been written on the subject. We’ve all read it. The hard truth is, we simply don’t care.
The second barrier to focus on infrastructure is metrics. Our internal and external metrics don’t naturally point us in the direction of investing energy in infrastructure. We can’t tie the work to a clear ROI that maps to any stat we record. As the old adage goes, we chase only the things we can measure – and that leads us down a dangerous path in marketing, leading companies and also in life. So, this kind of busy work winds up being placed to the side for a day when we have nothing else to do. Or something blows up.
Feeling the weight of accountability.
The founder phase is like our teenage years. We can be impulsive and take risks with little concern if things don’t play out the way we dreamed. Heading up a real company is like adulting by comparison; we have investors and business partners now holding us accountable and expecting results. In addition we come to raise kids – meaning, we take on employees, who are not only short term assets who generate an ROI on our behalf but also dependents who count on our success to support their livelihood.
These new responsibilities for some are exhilarating, while for others they bear tremendous weight that can anchor us. Surrendering the freedom and spontaneity we had in the initial phases of starting a company leaves some feeling trapped and less inspired by the opportunities ahead. Yet another reason why we can again suddenly move to question our interests and direction.
What inspires us as founders is what we long for once our job transforms to that of a CEO. What began through creation and starting gives way to imperatives in architecting and finishing touches. This transition comes with no alert and can consequently be ignored or even shunned as we flee to once again engage in the more alluring activities of entrepreneurship.
Yes, the role of a CEO is on paper is a less romantic one of detail work and chasing what your stakeholders demand from you. But it’s a pursuit that can be both meaningful and transformative – with the right perspective on what the role can ultimately be.
You see, in my view the organization of the future has yet to be invented although we are relentlessly tinkering with the model. In part due to reasons noted here, companies as they scale continue to lose their energy, responsiveness and agility. We’re fighting it but are still losing the battle, surrendering to our temptations to adopt the bureaucratic norms so many of us loathe in our roles everywhere.
My summary appeal to founders is to anticipate the transition to CEO and adopt it however it comes. Stay with it; grow in your role and harness the skill sets needed to create a new type of scaled company that looks nothing like the decades’ worth of those who came before. Finish what you start, and in so doing, leverage your innovative nature to disrupt the model of the modern organization. Whoever gets it right will advance a new era of agile, responsive, high-performing companies filled with a diverse slate of inspired employees. You’ll leave a legacy that will be written about for generations. You’ll be studied throughout the types of courses I’m teaching right now.
Be a starter and a finisher so we can transform business in a way that is so desperately needed through an informed perspective of what being a CEO is, and can be all about. Your kind of genius is the missing ingredient.
This Venture Beat article from summer 2017 outlines why good people are leaving larger tech companies. It both overtly and subliminally supports my commentary about the 3 main functions of a CEO or exec team.
August 2017. Epic article from a Forbes contributor on the 10 Characteristics of a Future-Facing Company. Recurring themes!