The manifestation of a passionately sacred dream in a profitable business is possibly the epitome of happiness for a founder. Especially considering today’s negligible success rate of 1% and the mere Rs7,000 (about $100) needed to start a company.
We all want to be the sole hero of our stories, the Iron Men to our Stark Industries. Possibly hence, even before our businesses break even, our visiting cards comfortably print the word CEO right next to the coveted “founder.”
But do know that strategically, the right team is what it takes to build a billion-dollar empire rather than a single-handed siege.
The startup seminars that I have been invited to and the clients I have worked with in the past have one thing in common: More often than not, the designation is treated like a monarch’s crown. “The business idea was mine so, but of course, like Mark Zuckerberg, Richard Branson, and Jeff Bezos, I am supposed to be the CEO.”
And you, my talented friend, maybe the Khaleesi with three dragons but you are not “entitled” to the Iron Throne.
Don’t take this the wrong way. By no means are power and position mutually exclusive.
When you imagined your big idea, to invest the prime years of your life, your passion might have been driven by product development, design or marketing. Isn’t that what truly makes you happy and what wakes you up two hours earlier every morning?
Why won’t you then become an expert in that role and hire smarter people to let you grow? As Ford’s Lee Iacocca once famously said, “I hire people brighter than me and I get out of their way.”
And once you have found that person, please remember to not interfere. They may carry hundreds of ingenious ideas whose outcomes you won’t see immediately. As Steve Jobs once quipped, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”
One line you often hear on the impel to startup is “the freedom to run things the way your heart desires without any bosses.” If that’s the case, that’s more reason for you to be the founder and create something beautiful, but let experience-rich, disciplined people run it to give you concrete results.
Look at it this way, starting a business comes naturally to some people while growing it comes easier to others. Don’t let emotions make you home-school your baby just because you can. There is a reason people pay those huge amounts to professionals to develop your kid into the best version of itself.
In the end, it boils down to introspecting and asking oneself: Do I want to be CEO because of power play and ego? Is that really my calling?
A CEO’s job is to create and maintain a corporate culture, develop company strategy, lead various executive teams (sales, communications, HR) and interface with investors and public.
So, how does an external CEO help? Let’s start with some facts.
According to the World Management Survey (pdf), a detailed review of over 13,000 mid- to large-sized firms in 32 countries showed that companies led by the people who founded them were on average 9.4% less productive, and had consistently lower management scores. These figures typically improved once the founder-CEO was replaced.
It is not that “legendary founder and CEOs” are mythical creatures, but they are few and far between.
Even if the CEO is not the founder, he or she can turn the firm more profitable with legendary founders at the helm. Four great examples are Apple’s Tim Cook, Microsoft’s Satya Nadella, Google’s Sundar Pichai, and Nike’s Mark Parker.
Investors usually are hesitant on putting their dollars in a firm heavily dependent on a single individual. Time and again, the request (read demand) for a neutral, external CEO is made as a non-negotiable clause for funding. Investors will respect your passion for your dream project, but with experience, they also understand that it can be a hindrance to scaling.
Egoistic founders who avoid important delegations are then terminated from their own companies.
You might remember Travis Kalanick being fired from Uber, but do you know Martin Eberhard? Eberhard was one of the original founders of Tesla in 2003 who was later ousted. After a 2009 out-of-court settlement, Elon Musk came in as CEO was given the right to “also” call himself the founder.
The reason why this story matters is because people need to understand that the roles of a founder and a CEO are very different and so don’t bite off more than what can be chewed when one can enjoy what one truly loves in the firm.
Did Musk scale up a firm he didn’t even make? Some would argue he scaled it up so well that almost no one remembers the original founders of Tesla.
It’s your brainchild, give it the very best it deserves. And for creating this wonderful company, you deserve some “me time” and quality work. You also need to focus on areas that truly resonate with your personality. Hire that expert to look at the bigger picture.
But if you think CEO is all that you were made for, then go to war like the Spartans, and here’s wishing you more success than Bill Gates and Jobs combined.