Fork In The Road

A quick recap: in part one of this three-part blog entitled Startup Companies: One CEO or Several, I named four stages for startup CEOs:

1.       The Starter/The Idea Person/The Technical Visionary

2.       The Concept Seller

3.       The Ramper

4.       The Scaler

Today, I will cover The Concept Seller and The Ramper.

The Concept Seller

After the company is operational, in this case meaning there are employees other than the founders, the next stage is to sell the concept to potential business partners and customers. It was relatively easy to convince a VC that someone would purchase your solution compared to convincing the first customer to actually pay money.

The critical challenge of this stage is that the leadership must balance building the product/solution, scaling operations and selling. For leadership that has only come out of an engineering background, this is sometimes more of a challenge than for someone who already has a customer-centric approach. In today’s world “It is a technical sale” isn’t really the case as much founders think it is. For example, if you have a SaaS solution for business administration, you may need to speak with the technical side at some point, but you better be selling your solution to the business side.

If your company is VC-backed, this is the first stage when it may be mentioned that the founder should take a different role than CEO. Depending on your track record to date and experience, this may or may not happen. The strength of your board chair will also influence this, but again, that is a different conversation.

At this stage, founding CEOs should be asking themselves the same questions they would ask someone from the outside: what do you bring to the table that will make this company success? The company is no longer “your company,” it is THE COMPANY and its greater good should take precedent. If you can continue to add the most value at the helm than continue; if not, find a role that fits your strengths and weaknesses better. For example, if you want to be involved with every decision within your company from technical to marketing, it is time for you to step aside. There is no way a company will be able to scale in operations to sales if you are the decision-maker in every instance. The sheer fact that you want to stay in charge to that degree indicates you should not continue to own everything.

The Ramper (reaching $50M)

Not that selling a new product is easy, but $4-5 million in the first year is not unheard of. However, ramping to revenue 10 times that is a different story.

Assuming someone who has been successful in a large company will automatically be successful in this size company is a mistake. Although there are several versions of an ideal CEO for this stage, a good indicator is obviously someone who has done this before in a world-class company. Take for example when Mark Israelsen became CEO of Salegenie. Having been an executive at both Salesforce.com and Oracle was not the indicator that he would be successful; it’s what he accomplished in those roles. Prior to becoming Oracle’s vice president of global application partnering strategy, Mark was managing director of Oracle Thailand, then regional managing director of its Indochina region, and eventually vice president of consulting services for the Asia Pacific division. Although he had the backing of a very large company, he had the opportunity to be successful building a country operation, then a region and finally a division. This small company style “get the job done” approach married with the belief that success is as big as you plan it, makes an executive like Mark a good fit to ramp a company’s growth.

A ramping CEO must be able to balance demands of scaling sales and marketing efforts while making sure the company’s infrastructure, solutions and operations can keep pace with the demand to come.  If it is someone new to the company, that person will have the added challenge of gaining the respect of both the board and employees. Despite what you think of Meg Whitman’s politics one way or the other, she was able to get people to respect and follow her. Without it, eBay would not have become the success it was during her tenure.

Okay, you’ve stuck with me through two segments this blog topic. Tomorrow comes the third and final installment.  See you then.