Many articles have been written on what makes a good CEO. It’s important to note that what it takes to be a good Fortune 500 CEO differs from what it takes to succeed as a hardware or software startup CEO. In this article, I’m going to focus on the latter.
Can your software startup CEO juggle all the necessary balls at once?Many common traits are important in any company leader: Integrity, intelligence, and work ethic, to name a few. But what are the particular, special attributes that make the difference? Between a software CEO who can do enough to take his company successfully past the early stage and those who aren’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, some ups and downs must be weathered, even in large companies. But in startup tech companies, the highs and lows (especially the lows) are much more frequent and extreme. Entrepreneurial CEOs MUST have the rock-solid ability to push through the many lows. This is true even when all appears lost. The CEOs who ultimately win have a stubborn belief that success will come. Even if at a particularly low moment, that belief is only based on the age-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” or blindness to problems within the company. Just believing you’ll find a way to “get there” isn’t enough. You must also 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. Maybe a shortcoming or two in your technology. Or any of a wide variety of other potential problems. It takes skill to solve 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 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 will always have something crucial missing in his young company. It might be overall management experience, experience in the chosen market segment, technology, marketing, or sales expertise, etc. There is no cookbook solution to these issues. There is a nearly infinite variety of issues. Once these issues are identified, in many cases, consultants, contractors, and outside services can fill the experience or outside voids that have been identified. Openness to utilizing them is crucial.
Technologically savvy startup CEO
Technological competence is becoming important to EVERY CEO in today’s world. However, 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 realize the product’s potential. 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 big decisions with technological underpinnings that greatly affect the company. It doesn’t mean he shouldn’t listen to his technical team or make decisions in a vacuum. However, tie-breaking is often required in these decisions. Sometimes the CEO is the only one with the “big-picture” perspective to see how the technological tradeoffs will affect the company’s broader position.
Understanding of “efficient” marketing & sales
I always say 3 pegs hold up the stool that is a software company: Product Development, Marketing, and Sales. While other skills are important to varying degrees depending upon the situation, these 3 are usually the most critical. Sometimes the sales function is more important than marketing, and vice versa. One of the sales or marketing functions is critical for success, along with product development. Usually, all three functions are.
Just as the CEO doesn’t need to be a programmer to have the technical skills necessary, he doesn’t need to be a lifelong salesman or marketer. But he or she MUST appreciate the importance of these functions. And do not underestimate the difficulty of doing them well. Again, he or she must be conversant. This fatal flaw often occurs with a CEO from a technical functional background. 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 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 many resources are required is highly dependent on the situation. Remember, resource doesn’t always mean money. In the case of a niche software company, the overall resource requirements might be modest.
However, convincing a 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 the minimum resource level 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 find a way to get the necessary resources. This must be the mantra of the startup CEO.
That’s my list of key attributes of a 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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Allison, I feel sufficiently chastised about my bad pronoun habits. My apologies.
Another great article, Phil – agree with it wholeheartedly. I was glad to finally see a female pronoun in the 8th paragraph! There are a few of us out here. :)
Allison
Phil,
I’ve always been a CEO of teleconferencing companies (3) and am now doing my first software start up. This is great advice and I enjoyed your article very much.
Carolyn
Carolyn, glad you enjoyed it. -Phil
Phil,
I really liked this article !! . It is succinct and up to the point. I have been reading your various articles posted by you and it is a great help for entrepreneurs.
– Rajesh
Timely and relevant since I recently started the journey of being a software company founder.
I think what you said in the article seems to all be sage advice. The only part that I think needs adding is the ability to adapt.
What I mean is if something isn’t working, you need to make either a tweak or in some cases a major change. Some people call it a pivot but I think the hallmark of success probably also includes this key trait – realizing something is wrong and trying to fix it. I suppose it’s somewhat similar to your example of going and finding domain expertise but a little different.
Instagram came about because the founders created a social media app that was floundering. They realized picture and video sharing was the most successful (ie popular) piece of what they were doing. So, they shut the windows and doors – cut out everything else and came out rebranded as Instagram.
Steve, thanks for your additions. You are right, adaptability is absolutely critical for a startup CEO. I refer to this obliquely in a number of ways including to the ability to solve problems as they appear, but it’s good to call it out directly. Best of luck in your new endeavor.