Can anyone become a CEO?
In a Real Startup.
This series is for people who are currently a startup CEO or would like to become one, or are just interested in the topic. It’s part of a forthcoming book series.
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PART 1 OF 3
How do people get their first CEO job? How did you get your first CEO job?
When I get these questions, I’m impressed, because it means the person actually cares about the process of becoming a real CEO with all the responsibilities and fun that come with it. They realise it doesn’t just happen, and that they may have to prepare and build some skills and expertise to be effective.
Usually they’re asking because that’s what they want to do next in their career, and they don’t just want to print some cards and have a fake startup. Oh yes, there are self-appointed CEOs who make themselves king or queen of their own little startup.
And there are veteran CEOs who have done the job in a few companies and are professionals, that was eventually my story after running a few real startups.
But what about someone who has never been a CEO in a real startup and really wants to make that their career?
If you’re in a big company and want to work your way up, it can be a long arduous and risky process. Larger companies always have a more formal process for finding and hiring the next CEO, driven by the Board of Directors. Usually they will look outside for a superstar to come in and shake it up. They’ll use a high end retained recruiter. It’s very political. These companies often spend six figures to make sure they acquire the right person. If you’re not already “in line” for the job, #2 or #3 in the company, your chances are low. However, the case studies of these processes are fascinating; I would suggest reading about the recent CEO changes at Uber or the string of CEOs at Twitter to similar stories. Also the Marissa Mayer debacle at Yahoo a few years ago that killed the company.
But in small startups it’s a very different story. The quality control for CEOs is much more variable, the available pool is much smaller because the pay is much lower (or sometimes non-existent) and there is a much better chance to become the first-time CEO.
(The lowest level of qualification to become a CEO is zero, where the founder anoints themselves as a CEO and doesn’t want to objectively discuss it. In fact one of the reasons they started the company is so they could give themselves the title of CEO. We’ll discuss this problem in another article.)
For many startups where the founders are mature enough to know they need a “real” CEO, they focus on someone with bigger company experience, they like good salespeople, a great negotiator, maybe someone with strong fundraising skills. In other words, a business professional with a lot of confidence (see my most recent article The Confidence of the Startup CEO).
Even in small companies there is a process. There will be external board directors and investors who have a say in performance, salary, and who will be the next CEO. I’ve become the CEO of a few of these types of enterprises. Get to know these key people as early as possible.
Also, learn whatever you can about boards of directors, finance and the primary functions of startups.
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To be continued, thanks for reading.