This week, we step away from your product and the framework supporting it to discuss perhaps the most important quality your startup will bring out from you, versatility.
Starting your own business means navigating through a constantly evolving work environment; that your role as a founder will require you and your team to adapt to the changing needs of your business and its customer base. Episode 33 and 34 guest Alex Fries has been around the entrepreneurial block a few times now, in both Switzerland and Silicon Valley and has since started a venture company investing in over 50 startups! We talked to Alex about the various roles a CEO takes on throughout a company’s lifespan.
In this blog post we will discuss your mission throughout the following five divisions:
To listen to the full interview with Alex Fries, click here.
Fundraising, fundraising, and more fundraising! The CEO is the best fundraiser of any company. Though the title sounds glamorous, the CEO is doing much of the dirty work, going out, making pitches and getting investors in. If your company has demonstrated traction and growth, investors will compete to give you money!
While raising funds, the CEO is also focusing on strategy by keeping an eye on cash and keeping as much of it as possible in the company to use it for growth. In our previous blog post we discussed one example of cash management by paying invoices on the day they are due. When it comes to strategy, it means having a plan for the cash and fundraising early enough in your timeline so that you aren’t blindsided by running dry.
It’s not the first time you’re hearing it from us, but in addition to effective fundraising, hiring the right people is imperative to a successful startup. In these early stages, having a strong team allows you to delegate and continue to focus on fundraising.
As your business grows and your team grows, the more your role as CEO will turn into a management position. You’ll have to learn to manage your people, their problems, the documentation surrounding it. As the company grows, so will your team and the original roles they had made not complement the state of the company.
As your business grows and hopefully propagates into other markets, making a lot of noise to follow that growth becomes a crucial task. Although marketing is far more than just PR, it plays a valuable role in promoting your business as part of your Four P’s toolbox. A successful company is fearless when it comes to making a ton of noise through their press releases. New version of your product? PR. New employee? PR. New markets? PR! Making noise makes you part of the language of the product. It takes a lot to associate your brand with a product and the more you push yourself into the language, the more salient the association will be.
It’s no surprise that the majority of struggles a CEO will face are those embedded in the very roles which define them. Namely, managing the people involved in your startup!
Managing Investors: Your investors will ask a lot from you, but all investors will ask the same questions from round to round. Consequently, it’s simple enough to be organized and prepared to inform every investor, big or small, through monthly reporting. Be transparent about your cash management, your burn rate and be very clear about what help you might need from your investors.
Managing Your Team: Whether you’re hiring through word of mouth, LinkedIn or poaching from other companies, the best thing you can do is to hire someone who is going to be passionate about the business with you. It’s best to distinguish between those who are committed to the role and those who just need a job to put food on the table. It’s ideal to have a mixed team with both experienced people and some who are fresh out of college. Older employees will save you a lot of time by bringing valuable, sometimes hard-learned lessons to the table.
Note: Finding the right fit for roles in your team won’t be easy, often you’ll have to bring the passion to the talent you want to acquire and, sometimes the talent you need is engaged in a different project. Don’t be afraid of poaching the people you need by instilling passion in them and aligning yourselves with each others vision for a successful career in startups.
You’re going to be faced with the question of how to build your board. The best practice is to involve two founders, two investors, and one neutral person, who isn’t paid but perhaps has some stock options to incentivize them in their important role.
The job of the board is to help keep the burn rate low. Often a CEO will feel the urge to push growth, especially when there is extra cash in the jar, and that’s exactly where a diversely selected board can come in to help keep an eye on things, and help make more informed, patient and calculated decisions.
Most CEO’s will claim that it was a gut decision when it came time to move on from the company. However, put simply, that gut feeling often comes from a place of growth. Perhaps the company has evolved beyond your own scope or speciality or you have grown out of the company. A good CEO is aware of their strengths and knows what they should focus on, maybe it’s time you focus on strategy, or remain chairman… perhaps the board will be the one to say this one isn’t right anymore. However about ⅓ of the time, if your team is strong, you should be able to stay on all the way throughout the companies lifespan.