CEO Brain Transplants.

Steve Blank writes a really good article on the differences between founders, founding team, and founding CEO’s.  He states:

What sets them apart from the rest of the team is that they can project a fearless reality distortion field that they use to recruit, fundraise, pivot and position the company.

While the rest of the team is focused on their specific jobs, the founding CEO is trying to solve a complicated equation where almost all the variables are unknown – unknown customers, unknown features that will make those customers buy, unknown pricing, unknown demand creation activities that will get them into your sales channel, etc.

The CEO role is most often times lonely.  It is the nature of the beast- I like to call it market facing leadership.  Alone in front of the world.  You’re never truly involved on the inside of the company.  Yet you have to maintain a constant involvement in it- to marry the external with the internal.  You are alone in your chaos, your goal is to return back to your team with a clear and definite path. 

The founding CEO’s role is never really just to fundraise.  And it kinda bothers me when people think this.  That would be a consultant.  A founding CEO’s role is actually to search for, identify, and scale a repeatable business model.  This is different then product and technical innovation (but yes, there are fantastic product CEO’s as well!  You can always identify a product CEO because they always have the VP of Product nearby). 

With the realization and achievement of this business model, then brings investors and employees who beat a path down to that company’s door.  That does involve recruiting, fundraising, pivoting, and positioning the company…yes.  But it is again, merely an off shoot of the CEO’s core focus which is the business model.

So a founding CEO’s role…

  • Search for, and scale repeatable business model.
  • Recruiting
  • Fundraising
  • Pivoting
  • Positioning
  • Moral Authority
  • Management of investors

Bringing in a new startup CEO is in many ways, similar to a brain transplant.  Understandably very painful.  And leaves many wondering…how does this even work exactly?  Of course everyone beats their heads up against a wall…we’re transferring brains.  The strong persist.

The transfer of knowledge so the CEO can lead with Moral Authority, absolute certainty, and long term commitment.  These are the specific advantages founding CEO types can offer a startup over professional CEO types (re Reid Hoffman).

The willingness to trust, risk, and embark on a long term commitment with a new CEO though, must always come from within the founders.  It is not something that can, or should, ever be forced upon by external investors.  There must be trust- and commitment established   beforehand with CEO’s and their teams, to prepare for external negotiations.  Without this, founders will always be left in a position of questioning the motives of others.  They should never have to do that.

That’s all my thoughts for today.  Happy Tuesday and day-in-the-life-of-entrepreneur 🙂

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