Key Qualities of a Successful Software Startup CEO

Many articles have been written on what makes a good CEO in general. It’s important to note, however, that what it takes to be a good Fortune 500 CEO is quite different from what it takes to succeed as an early stage software or hardware CEO. In this article I’m going to focus on the latter.

Obviously there are many common traits that are important in any leader of a company; Integrity, intelligence and work ethic to name a few.

But what are the particular, special attributes that are the difference between a software CEO who is able to do enough to take his company successfully past the early stage and those that don’t? Let’s take a look at a few from my point of view:

Unrelenting optimism & perseverance

This may appear obvious to anyone involved in startups, but I don’t think it can be understated. In a company of any size there are ups and downs that need to be weathered–even in large companies. But in startup tech companies that highs and lows (especially the lows) are much more frequent and extreme. Entrepreneurial CEOs MUST be rock solid in their ability to push through the many lows, even when it may appear that all is lost. The CEOs that ultimately win have to be stubborn in their belief that success will come, even if at a particularly low moment that belief is only based on the old adage of “staying alive long enough for luck to find you”.

Realism about his company’s weaknesses

It’s important to note that optimism can’t be confused with “rose-colored glasses”, blindness to problems within the company. Just because you ultimately believe you’ll find a way to “get there”, you still have to be aware of the weaknesses that might prevent that from happening and find a way to overcome them. Many of the most successful software CEOs have a “healthy paranoia” that helps them recognize early what is or might go wrong. That may be a lack of sufficient capital, holes in experience or expertise in the management team, a shortcoming or two in your technology–or any of a wide variety of other potential problems. Obviously it takes skill to solves these issues as well. But the ability to first recognize them while at the same time retaining your unrelenting optimism is a strange combination–yet they are both very important qualities.

Willingness to seek outside help

One of the key things that a startup software CEO usually needs to do after recognizing his company’s weaknesses is to utilize resources outside his company. Unlike a Fortune 500 CEO, a startup CEO is always going to be missing something crucial in his young company. It might be overall management experience, experience in the chosen market segment or technology, marketing or sales expertise, etc. There is no cookbook solution to these issues since the variety of potential issues themselves in nearly infinite. But once the issues are identified, in many cases there are consultants, contractors and outside services that can fill the experience or outside voids that have been identified. Openness to utilizing them is crucial.

Technologically savvy

Technological competence is becoming important to EVERY CEO in today’s world, but in a startup software company the lack of it can be fatal. The product is the ultimate star in most startup companies. As a result the software CEO must have enough skill in this area to make sure the product’s potential is realized. That doesn’t mean he has to be a programmer by trade, but he must be conversant enough technologically to instill confidence in his technical team. He must also be competent to exercise the “final say” in the big decisions that have a technological underpinning but will greatly effect the company. It doesn’t mean he shouldn’t listen to his technical team or make decisions in a vacuum. But tie-breaking is often required in these decisions and sometimes the CEO is the only one with the “big-picture” perspective to see how the technological tradeoffs will effect the company’s broader position.

Understanding of “efficient” marketing & sales

I always say there are 3 pegs that hold up the stool that is a software company: Product Development, Marketing and Sales. While other skill are important to varying degrees depending upon the situation, these 3 are usually the most critical. Sometimes sales is more important than marketing and vice versa. But either the sales or marketing functions is always critical along with product development and usually all three functions are. Just as the CEO doesn’t need to be a programmer to have the technical skills required, he doesn’t need to be a lifelong salesman or marketer either. But he or she MUST have an appreciation of the importance of these functions and not underestimate the difficulty of doing them well. Again, he must be conversant. This is a fatal flaw that often occurs with a CEO who comes from a technical function–they may never get how difficult or important the sales & marketing functions are to success–or they figure it out too late, when the available financial resources have already been expended.

The ability to bring enough resources to bear to succeed

This ultimately may be the most important thing a startup CEO has to do. The product idea may be great and the founding team may put in a herculean effort–but sometimes that just isn’t enough. How much in the way of resources is required is highly dependent on the situation and resource doesn’t always mean money. In the case of a niche software company the overall resource requirements might be modest–but convincing that one key programmer with just the right background to join the team could be the difference between success and failure. In a more high profile and ambitious startup the need to continuously attract institutional capital until the corner is turned might be critical. Every situation is different–but the ability to recognize what the minimum resource level is and find a way to bring it to bear is a core skill of the startup software CEO. Beg-Borrow-Trade-Charm-Convince-Coerce; just somehow finding a way to get the necessary resources must be the mantra of the startup CEO.

That’s my list of key attributes of the successful startup software CEO. This is obviously a highly subjective exercise–do you agree with my list? What’s on yours? Enlighten us with a comment below.

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