There is no shortage of advice for startup CEOs, from books to blog posts, and an endless stream of online advice. The bigger the mainstream media buzz about startups, the better the chance of seeing almost every day something like “The 3 Most Important Characteristics of a Successful Startup CEO”. But I digress…
I have never been a CEO, I worked with many, both in startups and in large corporations, and I have my own mini collection of anecdotes and “the 10 most important…” lists. These days, in my role at SBT Venture Capital, I talk with startup CEOs several times per week, and could easily come up with a list of what distinguishes the more successful ones from the not so successful. It would be only based on my personal experience, but it would make for easy writing, as all conversations are so fresh in my memory. I will also stay away from looking at one successful CEO and set the target for everybody else to being a clone. What I am trying to do in this post is distill more than 20 years of interactions with CEOs in a handful of higher-level observations that I see missing from the general discourse.
For me the most important trait I want to see in a CEO is “good” character — moral and mental qualities that do not have to be “exceptional”, but enough on the good side to make other people want to work with her/him. Basics such as not lying, no manipulation, no cheating, no bullying… You may think that it is quite a low standard – however my experience is that when the stakes are high, many people are not on their best behavior. I am not talking about Mother Theresa, and most people in this world would easily pass this simple test – it just seems, to me at least, that the CEO job attracts a larger share of the not-so-good people. One may say that this is a general requirement for any employment – my point is that a startup CEO has a huge responsibility to the 10 to 20 people that work there and the investors that put millions to make it happen. And the controls are inherently less effective for cost and agility reasons. Also, someone of character will have no problems stepping aside when the company outgrows her/his capacity to lead – see next paragraph.
Ability to learn
The second, very important characteristic, is the ability to learn. For every position I ever got in my 30+ years career, the employer was looking for someone doing successfully exactly the same job, preferably at a more successful competitor, and preferably for half the pay. And I have seen so many times, when a position was open internally, no one was promoted from the team and an external hire was brought in because of “experience”. So where do you find a CEO experienced in leading a mobile payments startup, or an alternative lending startup? You don’t… It is rare the CEO that has led several successful startups – and even for such a CEO each new startups is a new business, new technology, new ecosystem. In my experience, only quick learners can succeed – they start from their initial profession and add, as required, strategic planning, marketing, sales, engineering, accounting, people management, team building, project management, business development, execution discipline, and the list keeps growing. I am not talking about doing everything, but to manage a company the CEO needs a basic competency in all areas. And when the capacity to “learn quickly” hits the wall, its time to let others continue – see previous point…
A third and possibly less important trait is mental energy — optimism, the belief in own capacity to get things done, ability to work 20-hours days, for years in a row. I am listing it here for completeness, even though I have seen few CEOs that don’t have it. It is almost “table stakes” for the job.
Note that I do not talk about being competent, or getting results, or ability to execute, or about being able to enjoy the journey, or being a leader, or a good communicator — in my mind they are all derived.
In summary, character, ability to learn, and mental energy. Quite easy, isn’t it?