In Instartups, “founder CEOs” have a kind of mythic power — visionaries who not only give birth to new ideas, but bring them to life across every stage as the organization grows. Zuckerberg. Jobs. Benioff. A few names that embody that myth.
But the truth is, founder and CEO are different roles. Very few people are cut out to make the transition from the former to the latter. In fact, only around a quarter of founders manage to hold on to the title of CEO by the time the IPO comes around, and the majority, nearly 80%, are pushed out.
Yet a lot of founders, myself included, believe they can make the transition, despite the odds. The truth is, most founders underestimate the abrupt shift in approach, thinking and sometimes even philosophy, required to successfully maneuver from one to the next. I’d like to share some of the lessons I’ve learned in transitioning from founder to CEO of Simple Health with the hope that these will help more of you be part of the surviving 20%.
But before we dig in, let’s confirm the differences between a founder and a CEO.
Lesson #1: Everyone loves the founder, not so much the CEO
In the beginning, before you get to product/market fit, the founder’s role feels both incredibly overwhelming and incredibly exciting at the same time. The possibilities often seem limitless. You have a small team, everyone fully believes in the vision, and you see meaningful progress every day.
But as the company grows and the founder transitions to CEO, a lot of that changes. Your job is to define the focus of the organization: What to pursue, and what not to pursue. Inevitably, some of those decisions will bring you into conflict with the visions and ideas of other people within your company.
That’s unavoidable, because the things that concern you now as CEO — partnerships, fundraising, and so on — aren’t even on the radar for most employees. Yet when it comes to employee concerns, you’re obligated to seriously and urgently address them, however divorced from your higher-priority goals they may be.
This is why CEOs sometimes describe the job as “lonely.” As your priorities become increasingly sui generis, it becomes harder for people in the organization to understand your rationale for making decisions.
Takeaway: As the organization grows, your perspective and goals become uniquely your own. As a result, some employees will have a hard time understanding how or why you’re making decisions. So get ready to say “I’m sorry,” a lot — and to jump on a lot of grenades so that your teams can accomplish their goals.
Lesson #2: CEOs don’t get to have ‘opinions’
In transitioning from founder to CEO, you’ll find that the days of spitballing, workshopping ideas, and playing it fast and loose are mostly over. Suddenly, whatever comes out of your mouth isn’t merely a speculative idea; Rather, it’s how your company does business — the default policy or strategy.
Takeaway: Honestly, it’s amazing what you can inadvertently set in motion by speaking without thinking, so be thoughtful about what you verbalize to the team (something I work on constantly).
Lesson #3: Your decisions become a lot more difficult
At the same time that your words carry added weight, you also have to get comfortable choosing between bad options. That’s because, as you build a strong layer of leadership beneath you, the issues that do land on your desk are going to be tough calls, pretty much by definition. Things will bubble up to you if and only if they can’t be resolved otherwise. So you’re forced to choose between a rock and a hard place, and to do it fast, because other people in the organization will be effectively paralyzed until you do.
Takeaway: Be prepared to make some incredibly tough calls — that comes with the territory.
Lesson #4: Creating an organization, not just a product
While the founder carries the company to term, it’s the CEO who raises it to maturity. That requires a shift in thinking, from creating an amazing product to building an organization that can birth amazing products. It’s a freestanding entity that needs to be able to adapt and win for a long period of time.
Some of the questions you’ll start to think about are
How does information flow, both from within and from without?
How are decisions going to be made? Who will make them?
Which opportunities should we pursue and why?
Finding the right answers isn’t easy, and you won’t be well served by the same strengths that enabled you to bring your initial creative vision to life. In fact, the individual contributor skills that made your product and initial vision come to life will hardly come into play anymore.
Takeaway: The skill set required to imagine a product and move a small devoted team to build it is very different than the skill to successfully manage a company as a freestanding entity — comprised of hundreds (or even thousands) of brains.
These four lessons are by no means the only ones, but I think these should prove valuable as you navigate your own journey. If you’re dreaming of creating an amazing product as a founder followed by growing an enduring organization as a CEO, don’t be discouraged by my candor. The possibility is out there — I’m just telling it like it is because I want to provide guidance that’s real, transparent, and actionable. I think those elements are shockingly absent from most of the writing about startups today (and if you haven’t seen my piece on “Startup Porn,” it’s a good read on this trend).
In the meantime, hit me up in the comment section below or on Twitter. I want to know what’s on your mind, the topics that matter to you and what you want to hear about in the future.