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14 Ways To Be A Great Startup CEO

Posted by Jason Baptiste on Tue, Dec 28, 2010

great startup ceo mark zuckerberg resized 600Everyone thinks that being a startup CEO is a glamorous job or one that has to be a ton of fun. That's what I now refer to as the "glamour brain" speaking aka the startup life you hear about from the press. You know the press articles I'm talking about... the ones that talk about how easy it is to raise money, how many users the company is getting, and how great it is to be CEO. Very rarely do you hear about what a bitch it is to be CEO and how it's not for every founder that wants to be an entrepreneur. I've spent a lot of time recently thinking about what it takes to be a great Startup CEO that is also a founder. Here are some of the traits I've found.

Be A Keeper Of The Company Vision

The CEO is the keeper of the company's overall vision. I'm not talking about the vision for the next few months, but the larger road ahead. The CEO needs to be able to keep things on course for the current quarter to make sure that the large overarching vision of the company can be achieved. The takeover the world vision of a startup usually can't be achieved in one year or even in some cases, like Google, in a decade. It takes a great startup CEO to keep the company on track to achieve that vision. A great startup CEO will often judge upcoming initiatives to see if they fit in as a piece of the large puzzle for the bigger vision.

Absorb The Pain For The Team

A startup CEO needs to be the personal voodoo doll for a startup. They need to be able to take on a strong burden of stress, pain, and torture all while making level headed decisions. You can't have the troops stressing and worrying about the difficult challenges at hand. A good startup CEO will absorb the stress, so the rest of the team can carry on. He also needs to be able to mask this pain and stress. Not that he should hide or lie to the team- I'm not encouraging that. Most of the day to day nuances+stresses of a startup aren't worth having the entire team worry about and the CEO needs to bear that pain.

Find The Smartest People And Defer On Domain Expertise

A startup CEO has a great knack for finding talent. The key is finding people that are smarter than you on specific topics. It might be technical team members/leaders or it might be a new VP of Biz Dev. A startup CEO has to have the ability to find these people and make relatively fast decisions to hire them. They also have to be able to show the fire and passion to convince them to leave what is most likely a better paying and more secure job to join the company. The real key to hiring as a startup CEO comes after the hire. A great startup CEO will be able to trust the hires that they make and defer to them on areas of domain expertise. It's hard to let go, but you have to learn to, especially when the company grows.

Be A Good Link Between The Company + Investors

Whether you want to believe it or not, you are not an investor's only portfolio company. Even if you are a superstar, they have a handful of other companies to help and a ton of incoming potential portfolio companies. A good investor will pick 2-3 new companies per year to work with. A good startup CEO will be a good link between progress, issues, and areas where they need help with investors. A good portion of early stage startups that raise money will have a board comprised of 3 people: the CEO founder, the investor, and an independent board member. You are the lone representative for your cofounder and other employees.

Be A Good Link Between The Company + Product

I have this unwavering belief that the best companies are those that keep a founder as CEO for the long haul. Not because the founders have the right to be CEO, but because the CEO needs to be close to the product vision of the company. Founding CEOs understand this the best and can carry out that same unified vision over time. To fill in the management gaps a great COO, other board members, and heads of divisions will come along. It's a strategy that Facebook has employed and why Apple has had a great resurgence with Steve Jobs at the helm. It's all about keeping the CEO as close as possibly linked to the product.

Be Able To Learn On The Job

Most startup CEOs didn't start out with an MBA or some background in growing a company from nothing to something. The best have an ability to learn along the way and embrace their failures to become a better leader. Zuck started when he was 19 and now 7 years later, runs the most powerful internet company. Don't worry about whether "you're qualified" as it's hard to put typical qualifications on the job. You'll learn the really core stuff along the way. The best startup CEOs will surround themselves with smart mentors to be a sounding board along the way.

No Experience Almost Preferred

It's almost better to have a blank slate of zero experience as a startup CEO. If you come in with preconceived notions and block out the scrappy methods of a startup founder, it actually hurts you. Traditional education often trains you to be CEO or manager for a much larger company, not for a startup of under 50 people. It's a different kind of leadership and company.

Have An Uncanny Ability To Say No

You will be inundated with a list of requests from potential partners, investors, employees, and more. They will all sound absolutely wonderful. As you grow, you will also have the resources to execute more of them. Don't. It's easy to say yes, but so very hard to say no. By having an uncanny ability to say no, you can keep your company on track with the large vision you maintain. It will also keep your team members (notice I don't like to use the word "employees") laser focused and feel more rewarded as they are able to focus on one thing for a good chunk of time. I've seen too many startups sink because the CEO keeps changing what the head of product and engineering should be doing.

Have Some Technical Knowledge And Skillset

A good startup CEO shouldn't be afraid of a little bit of code and a text editor. They don't need to be diving into the source code on a daily basis, but they need to understand the technical requirements. It's easy to say "go build this", but it's a whole other ball game to understand how to build it. What seems simple may be a huge mountain of a technical feat that just isn't feasible with the given resources and deadlines. It can also help lend some street cred with hiring early technical team members too.

Be Able To Break Things Down Into Sizable Chunks + Milestones

Remember that huge unwavering vision that you are the keeper of? Odds are it only makes sense to you and your cofounder. You will need to break it up into sizable chunks and milestones for the rest of the team to understand it. You also need to be able to pick when and where to conquer things strategically. What is the past of least resistance so you can gain traction? What can you do first with your given resources?

Have The Ability To Call An Audible

Nothing goes according to plan. Things fall through, people quit, shit happens, servers crash, and other random things go bump in the night. You're going to have to deal with it and fast. This is a football term:

"Seen when the quarterback goes up to the line of scrimmage, sees a defensive alignment he wasn't expecting, and adjusts by yelling out a new play."

You're going to come up against things that you didn't expect and just be able to call an audible. Launch faster, spend more money here, or even abandon a project.

Can Motivate The Team Through Despair

People love to talk in this business. People love to talk even more when you're company isn't fairing well. A great CEO will be able to take those moments of public despair and keep the company focused. They will be able to debunk the rumors or even approach them head on by keeping the members of the company focused on the bigger mission at hand. It can come in simple 5 minute talks or motivational emails. The worst thing you can do is avoid the situation and be passive aggressive. I repeat: DO NOT WUSS OUT.

Be A Great Communicator

You need to be able to portray the energy and passion that you feel into others...over and over and over and over and over and over again on a daily basis. As a startup founder you need to communicate the vision and hope for the future of your startup to the rest of the world. You need to be able to break down the overall vision of the company into something that mere mortals can understand. You can't speak in crazy technical jargon or industry terms. It needs to be simple, clear, and compelling. You also need to be able to argue your point. Many will pick "fights" with you just to see how strong willed you are. Be respectful, but be very confident in your answer. Often wrong, but never in doubt my friend.

Don't Be A "Fake CEO"

Mark Pincus, CEO of Zynga, makes a strong case for not being a fake ceo. In short, worry about things that produce results, not fame. If it's between going to a conference/doing an interview or completing a deal, get the deal done. Don't "leave it to someone else". You need to get your hands dirty every single day.

By no means is this an exhaustive or definitive list. In some cases, the traits listed above might be counter-intuitive. What are some traits you've seen in great founding startup CEOs? Not the glamorous job you thought it was, eh?

You Should Follow me on Twitter: http://www.twitter.com/jasonlbaptiste, Friend me on Facebook: http://www.facebook.com/jasonlbaptiste, Email Me: jbaptiste@onstartups.com, or even call: 201.305.0552

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Why Facebook Will Flourish: No Food Fights or Vampires On LinkedIn

Posted by Dharmesh Shah on Fri, Oct 12, 2007

I came across an interesting article on the NYTimes.com website today:

LinkedIn Plans To Open Up In A Closed Sort of Way

The article is an interview with Dan Nye, the CEO at LinkedIn.

A few points from the article:

1. LinkedIn will have to "approve" any company that wants to tap into its system.

2. Nye wants to keep the apps "all business".

3. There will no food fights on LinkedIn. So, unlike Facebook there will be no "frivolous" apps that allow users to throw food at each other, send each other virtual beers or some of the other fun and frolicing that occurs.

4. LinkedIn will take a revenue share from any apps that are built on it's platform.

As a Facebook user, I personally find most of the applications built by third-parties inane and time-wasting. I don't want to be a vampire or throw food at my Facebook friends. Perhaps you don't either. But, that's not the point. As a software entrepreneur, I think what makes a platform appealing is the ability to exercise some creativitiy -- within technical and infrastructure limits.

When I first started developing for Windows (and for that matter DOS), I knew there were restrictions. But, the restrictions were not that I needed to seek approval from Microsoft -- they were technical limitations and market limitations. If I wanted to develop a silly application that reversed the characters in a string and printed it out, so be it. If I wanted to make that application available to everyone. So be it.

Though I can understand the motivations for LinkedIn focusing on its users/customers in order to ensure they are getting maximum value, I'm not sure that trying to be highly selective about which apps are approved and available is the optimum strategy. One of the big advantages of building a platform and allowing third-parties to create value on top of it is that you are not limited by your own creativity. Others with interesting ideas can try them out. Some will succeed and some will fail.

Back to Facebook. Sure, lots of the apps are silly, but I get to decide which ones I use. Just like Windows (another platform), there are literally tens of thousands of apps that are out there. I use a small fraction, but in many cases, it’s a *different* small fraction than the ones you use. A good platform allows this "free market of ideas" and fosters creativity. You're going to get a lot of crap, but that's the price you pay for the good stuff.

So, although I agree that virtual food fights are a waste of time, sometimes you have to allow a bit of fun and frolic in order to flourish. And, there is such a thing as going too far in order to "protect" your customers. As a customer myself, I'd rather decide what I find useful or interesting. What do you think?

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force.com: The Perils of Platform As A Service

Posted by Dharmesh Shah on Fri, Oct 05, 2007

First off, let me say I'm very impressed with Salesforce.com. I admire the company considerably. My startup, HubSpot, is a Salesforce.com customer. We're also about to become a partner so we can integrate our marketing product with the SFDC CRM/sales application and create some benefits for our customers.

As a CRM applications company, I think Salesforce.com is simply brilliant and the company deserves much of the success it has achieved. I even like the fact that they built an API so that third-parties can create value around the core Salesforce.com CRM application. This is just smart as it further extends their reach and gives the ability for customers and partners to create more value.

However, I'm a bit troubled by the recent announcement of force.com, SFDC's new "platform as a service" offering. My concern is not with the actual underlying technology, as I don't know much about it. I've never written a line of Apex code in my life (this is SFDC's proprietary language introduced as part of the hosted apps on AppExchange). My concerns are primarily strategic in nature and centered around software entrepreneurs looking to build businesses on top of force.com. My guess is that startups are the initial primary audience for force.com as I don't believe large, established enterprises will be buliding or porting apps to force.com anytime soon.

So, if you're a software entrepreneur, here are my thoughts on the tradeoffs of building your shiny new startup on top of force.com:

1. Lack of an ecosystem: I think the ecosystem surrounding a platform is as important as its underlying technical merits. Where will you find other developers? Books? Training? Tools? Components? If you have to initially rely on SFDC and it's small pool of early partners, chances are, you're going to pay higher than average costs for all of these things.

2. Upper Limit On Growth: Lets say your idea really is as brilliant as you think it is. How far do you think you can take it on if you're running on force.com? $10M? $100M? The next Facebook? I'm going to argue that there's an intrinsic limit on how big your company can get while running on force.com. I clearly have no data to back up this argument (yet), but see point #3 below for some rationale.

3. Royaties: So, what will being on force.com cost you? Unlike successful platforms of yesteryear (like DOS, Windows, Mac or the Internet), force.com has a royalty. You're going to pay Salesforce.com $25/month/user to run your app on it. I like the simplicity of this, but it does limit the kinds of apps you can build. There are lots of software businesses out there where $25/month/user would likely be over half the revenue generated. Sure, you get infrastructure, distribution help (in theory) and a shorter development cycle. But, this comes at a price.

4. Price Controls (or lack thereof): I would worry that in the long term, Salesforce.com would have significant "power" over the price -- and would likely find ways to exert that power over startups. I'm not saying that they're necessarily going to *raise* prices, but they're likely going to take a larger fraction of the "market value" for the capabilities they're bringing to the table. So, 5 years from now, when processors, storage, bandwidth and other infrastructure components are even cheaper, there's no requirement that SFDC has to reduce its prices to match "market". Once you're on, you're on. Another alternative would be to come up with force.com "Enterprise" (basically a segmentation and price discrimination strategy). The features included in the "Enterprise" platform would be just those those successful on the platform really have to have.

5. Focused Competitive Power: Since this is "platform as a service", SFDC would have considerable power over the startups that run on it's platform. Back in the day of DOS/Windows, there was suspicion that Microsoft went out of their way to ensure that apps like Lotus 1-2-3 and WordPerfect had "trouble" running on their latest OS. But, back then, the product update cycle was pretty long and there were literally thousands of developers using the platform that Microsoft didn't necessarily know about. Even if they Microsoft hated your guts (because you were competing with them), it would take them some time and effort to really single you out and do damage. They couldn't easily change the platform to make your life (individually) hard. But, with force.com, the power to change is immediate. If you failed to negotiate a new partner agreement, pay your royalties, or (gasp!) wind up in a situation where SFDC really liked your market, they could (technically) turn you -- and your customers -- off in a second. There's nowhere to hide. I'm not saying they'd do this, but simply having the *ability* to do this gives them a fair amount of power and future negotiating leverage.

My point is, though I find the force.com "platform as a service" idea interesting, I'd be a little leery of actually putting all of my startup eggs in that basket. I'm sure there will be entrepreneurs, VCs and other folks that will support SFDC in this effort and work to make it successful. But, for now, my bet is that SFDC won't be nearly as successful in the broad "platform as a service" market as they were in the CRM apps business. It's just a very different game.

This is why I like the Facebook platform. You get the advantage of a large and growing number of users on the platform -- without all the muckiness of having to use their language, tools and technologies. In fact, you could simultaneously build an app that lives on Facebook -- but also runs on it's own, thereby giving you the best of both worlds. Sure, you still have to worry about infrastructure -- but that stuff is geting easier and cheaper.

What do you think? Are you considering spending the next couple of years building something on force.com? Am I being overly paranoid here and missing what will prove to be the greatest opportunity since Windows for software developers? Would love to read your thoughts in the comments.

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Ga-ga for Groups? LinkedIn is Lame, Facebook is Fantastic

Posted by Dharmesh Shah on Fri, Aug 17, 2007


I am on vacation in Norway for a couple of weeks (for those that are curious, I am on a farm about half an hour outside of Skien). 

Regular readers of OnStartups will likely know that sometime ago, I started a LinkedIn group so that those interested in startups would have another forum in which to gather.  Today, the LinkedIn group for OnStartups reached 1,000 members.  This is not too bad given that the community is "closed" and I manually approve all members.

However, I have been playing around with Facebook recently and I must say that I am very impressed with the application and the degree of flexibility it provides just with their basic "groups" feature.  Here are a few observations now that I have used both systems to some degree:

1.  Starting a group on LinkedIn required a manual application.  Nothing happened for the first couple of months.  I followed up again and resubmitted the application and finally the group was created.  Starting a group on Facebook took 30 seconds, 15 of which was figuring out how to navigate the Norwegian version of Windows that I happen to be using right now.

2.  LinkedIn provides no notification when new members have requested to join the group.  I have to login manually to figure this out.  I do this once a day or so and it is very annoying (and clearly unnecessary). 

3.  On Facebook, I have the ability to designate other administrators to help manage the group.  Though I do not need this just yet, I have a strong feeling that I will.  This is an exceptionally important feature.

4.  On Facebook, the feature-set available within their groups app is just much more compelling than LinkedIn.  However, this is not saying much because the LinkedIn groups feature is brain-dead.

5.  The only thing that LinkedIn provides that Facebook does not (that I miss a wee bit) is the ability to get a custom link that users can use to join the group.  It lets you send out email invites to friends to join (and invite those in your network), but a simple "join" link would be useful.  If I just happened to miss this feature, please leave a comment.

What is particularly impressive is that all of this functionality in Facebook does not even require building a custom Facebook app (though I will likely experiment with this someday).  It is really, really easy to get started.

So, if you are a regular reader of OnStartups, have joined the OnStartupsLinked group or are otherwise just a startup fanatic, I encourage you to join the OnStartups group on LinkedIn.  I think it will be a great way for the 7,000+ members of the OnStartup community to convene online. 

Update: Here is a link that I think should let you access the group:

Access OnStartups Facebook Group

P.S. It took months to get the LinkedIn startup group to 1,000 members. Lets see how quickly it grows on Facebook.

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3 Things LinkedIn Can Learn From Digg To Compete With Facebook

Posted by Dharmesh Shah on Tue, Jun 12, 2007

I came across an interesting article today on CNNMoney.com titled "LinkedIn Says It Will Own Business Networking".

Basically, Dan Nye, the CEO of LinkedIn is saying that people will build one online profile of their personal life and one for their professional life.  He could be right.  He's probably smarter than I am (and Reid Hoffman, the founder, is definitely smarter than I am).  But, I don't think it's necessary to concede this ground just yet.  Often, the best defense ("we want to keep our professional customers" is a great offense.

I were chairman of the board, master of the universe and grand poo-bah at LinkedIn, here's what I'd do:

1.  Create A Simple API:  I cannot tell you how surprised I am that LinkedIn has not done this yet.  It is a perfect platform to allow others to extend and create value for.  The data model is relatively simple and the user-base is large and growing.  If they need an example of a simple, well implemented API, they should just look at the new digg API

2.  Get Better At Groups:  At the request of several members of the OnStartups community, I created the OnStartups LinkedIn group.  First off, it was a pain in the neck to actually get this done (there's no automated way to do it).  It took multiple attempts and several months.  After all was said and done, I've got the group setup and it's grown (over 800 members now).  But, it doesn't really do anything other than list people in the group. There are no social networking or group features like one would expect.  Digg is not the perfect example here, but it's a start.

3.  Get On Board With RSS:  I'm an RSS fiend.  I don't read emails anymore (especially not automated ones that update me regularly on things).  That's why god created RSS, so my inbox can be clogged with a combination of SPAM and real emails of carbon-based life forms.  LinkedIn should have at least one master RSS feed that told me when new people came into my network, when others have accessed my profile, when folks have joined my group, etc.  It's not that hard to do.  Digg supports RSS in a whole bunch of places -- and especially where it counts.

That's it.  These three things alone might not win them the battle -- but it sure would help.  If nothing else, they'd have at least one (paying) customer that was happy.  What do you think?  Any more ideas of how LinkedIn could improve it's service and fend off the powerhouse that is Facebook?  Also, If you're in an early-stage startup and building out a community or platform at least two of the above items are probably good advice.

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