There are two types of leaders: those who thrive through war and hardship (like Winston Churchill and Abraham Lincoln) and those that excel during peace & prosperity (Angela Merkel and Margaret Thatcher). And generally, there is almost no overlap between the two, which makes sense.
The thing is, this dichotomy doesn’t only apply to politics and government. The same is true with startups and business. The guy or gal that starts the startup in their garage and scales it to $1M, $10M, maybe even $100M… they are rarely the same as the one to take it to $20B.
Because everything is different.
Because business becomes more than a scrappy fight for survival.
Because even YOUR company can start to feel “corporate” after a while.
This is why in the past, it was so common for investors to replace the founder with “professional” management. Investors (primarily VCs) wanted to ensure their investment and although XYZ unicorn hotshot might have built the company incredibly well (quickly, effectively and with a great company culture), that doesn’t mean they have “what it takes” to run a public company.
At least this was the belief before Gates, Bezos, Zuckerberg and Jobs destroyed this fallacy. Because there are plenty of founders that can transition to being a “real” CEO. And keeping the founder has a lot of advantages.
For one, founder-led companies typically have much more leeway when pivoting the company and more credibility when it comes to making bold claims (like Elon before he missed every deadline he ever promised — and even now, the markets still love him).
There is a reason Tesla, Amazon and Facebook are super hot stocks with valuations well in excess of their current revenues, and it is the promise of enormous, untapped future growth. Which is something founders are uniquely good at promising and, if they’ve got to that stage, have a proven track record of delivering.
Contrast that with your traditional public market CEO — the copilot who has been called in to “main the helm” when the captain steps away or is incapacitated. If it sounds a bit like autopilot, it is because it often is. Replacement CEOs have much less leverage than founders when it comes to making hard, bet the company decisions. They haven’t proven their loyalty or competence to employees or shown the market their stroke of genius, and are thus, often viewed skeptically.
Instead, people mutter: “they weren’t here at the beginning,” “they don’t know what this company is all about…” “What would XXX say?”
Which might make you think founder-led companies are always the way to go, right?
There’s just one problem: the founders themselves.
Many of us aren’t cut out to be long term CEOs. We’re creators and innovators, we’re zero-to-one guys and gals that love problem solving and are often too distracted by shiny objects (or ADHS in my case) to fight through all the painful stages of company development needed to build a $100B juggernaut.
Because everything changes as the team and the business gets bigger.
The question is: does the leadership need to change as well. But that is why you’re here — you are not sure if you’re meant to continue leading your company to Series D, E, IPO and beyond etc…, or if you’d be handicapping the business in the process. You don’t know if you’re built to be a leader, or “just” a builder…
What makes a successful founder turned CEO?
I know what you are thinking… Every startup has a CEO. Well, when we say CEO here, we mean big business… not CEO of your five person startup struggling to raise funding, handle customer service and find clients… all on Monday morning.
No, as your company evolves beyond 20 or so employees, your job begins to change. Everything starts to break. You can’t keep track of 20+ employees on your own. It is too many people, reports and meetings for things to remain as flat and lean as they once were. Processes need to be professionalized, the business needs to start “growing up.”
It all starts with outsourcing as many of your core competencies and responsibilities as possible to your management team — moving from being an active doer and participant in the business to being a leader focused on direction, strategy and one-on-ones with your key reports — who then do the same with their people. Because after about 20 people, it’s impossible to do this on your own — unless you want to be in never ending meetings.
And this is only the first stage of CEO maturation.
At every successive milestone, things move further and further in this direction. 50 employees, 100, 250, 1000, 5000… As your company grows and scales, so do the challenges and responsibilities.
“With every level, there’s another devil.”
This is so true with businesses and startups. Every year holds uniquely “impossible” challenges.
- Validating the market and building the product.
- Acquiring customers and securing your first funding.
- Finding product market fit and landing a Series A.
- Hiring HR and managers as your team grows.
- Becoming the figurehead focused on funding and board/investor expectations.
- Crafting your “story” and preparing for IPO.
- Managing market expectations and hitting your targets.
- Becoming the market leader and crushing young upstarts.
And so on and so on…
Luckily, the job never gets old.
Unfortunately, the job never gets easy.
That’s why only founders and early employees that are constantly able (and willing) to reinvent themselves are able to keep up. And many founders don’t want that. They simply aren’t built for corporate life.
But others are.
Others like Zuckerberg, Jobs and Gates skillfully made the transition, evolving from nerds and hippies to polished, professional CEOs as comfortable keynoting an Apple event as crushing/copying a rival like Snapchat.
Are you a serial founder or a CEO?
The decision whether or not to evolve with your company or bring in outside management is one of the most important you will make and one I often help many founders with (Let me know if you need help here 🙂. They’ve survived and overcome the impossible barriers to build “their baby” into something meaningful. They’ve accomplished so much, but still, they aren’t sure if they are the right person for the job.
And this can be an incredibly hard choice. How could you possibly “quit” on your company? How could you possibly leave your team “out to dry?”
The truth is, the decision whether or not to step back from a company comes 100% down to you. To make it easier, here are a few questions to consider:
- What are your goals for the business?
- What do you love doing most?
- Are you a builder or a manager/leader?
- What would you do with your time if you were no longer CEO?
If your brain is already spinning with ideas of businesses you’d like to start or Bahamas vacations you’d like to take, you might already have your answer.
But don’t decide, at least not yet.
Give it time. The answer always comes to you, often in the form of a gut instinct. What does your gut tell you? Could someone else do at least as good, if not better at running the company? Are you holding your team back? Would you really be happy building and leading a larger organization?
And what do you want for yourself and your family?
Just because you are overwhelmed currently running your business and managing your team, doesn’t mean you need to step down.
But it does mean things need to change. You are burning yourself out and sacrificing your business in the process (By the way, here are 9 helpful hacks for curbing founder/CEO stress that may help).
You need to start thinking about what systems, processes and structures you need to change in your business, which is never easy and often where I come in.
The good news is, these changes are necessary whether you remain at the helm, bring in an external CEO or decide to sell the company. It is all about taking yourself out of the business’ day-to-day and empowering your people to lead and perform at their best.
Because if you’re irreplaceable, it’s not a business, it’s a job.
Operationalizing yourself out of the business
So, start thinking: How could I take myself more out of the business? What percentage of my time is focused on operations & execution as opposed to strategy & vision? Would the company survive if I disappeared for a month?
This last one is actually a great stress test for any company, a variation of which I often recommend to clients — taking at least a week 100% off once a quarter. That means no email, no emergency calls… nothing.
This is the ultimate pressure test for your systems, team and business. It is also the ultimate display of trust and of great leadership. Not only do you trust your team blindly to keep the business going and moving forward, you also set a powerful example for the importance of rest, recovery and well-being for employees, which, in addition to drastically improving your quality of life, takes your performance and productivity up a notch (here’s how).
Back to the question of being CEO
Everything we’ve talked about takes time. Time to think about what you want, time to organize and restructure the team, time to reduce your stress and workload.
The good news is, that is not just okay, it is key to the entire process. Deciding whether or not you want to (and should) continue running the company and invest the time in transforming yourself is a major decision that will have a huge impact on the future of the business.
That’s not something you do on the spur of the moment. There is too much at stake, including your personal health, happiness and future.
So, after you’ve given it some time and thought and changed the things in your business and life that needed changing, how do you feel running the company today? What’s changed? What’s your gut telling you?
Whatever it is, you’ve got your answer.
The best part is, you can know wholeheartedly that you gave it your all — so you never have to regret anything. And regardless of what you decide, your company will be better off for it.
Some people are born to lead. Others are born to follow. And then there are the builders. What are you and what do you want to be?
I hope this article helped you with finding a bit of clarity. If it has and you need help taking yourself out of the business, preparing for a sale or transforming into the CEO your company deserves, I’d love to work together. And if you are still not sure, we can talk that through too.
That’s what I’m here for, because let’s face it: if you told your employees, they might freak out, if you told your investors, they might skip the next round and your friends and family (with their normal nine-to-fives) can’t relate at all. Just another reason I believe all founders and CEOs should have a coach, at least if they’re serious about building the best business possible.
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