Posted by Neha De
December 3, 2021 | 3-minute read (503 words)
In the world of startups, one question that often comes to mind is: “Do founders make great CEOs?” To answer this question, we need to first delve into the responsibilities and expectations of these two critical roles.
Who is the founder?
A founder is the individual who launches or starts a company. They come up with the idea for a business, set it up and drive the organization’s objectives. They are also responsible for setting up the core team and coming up with the resources required to succeed.
While a founder can also become a CEO, the skills needed to be one are usually quite different. Amazon CEO Jeff Bezos is an example of a founder-turned-CEO.
Who is the CEO?
The senior-most executive in a company, a chief executive officer typically works with the founder to execute the business’ long-term goals. For this, they look after the organization’s strategic management and have supervisory jurisdiction over all other staff members.
The organization may also have a board of directors, and if that is the case, the CEO answers to this board. While the board of directors can provide stability in a firm and create an independent level of accountability, it is the CEO who is responsible for the day-to-day operations in the company.
Skills favorable for a founder to succeed as the CEO
Here are the five traits that can help a startup founder succeed as a CEO:
- Being a thought leader for the industry – A successful CEO is someone who is good at solving the right problems. That often means an individual who understands what the customer wants and their customer pain points, and who then tries to create a business to solve it. A CEO is also so confident about their solution (to the identified customer pain point) that they become their industry’s thought leader.
- Having the drive to win – A CEO should ideally have a demonstrated track record of winning, whether in sports, academia or other competitive fields. Moreover, they should have the drive to win deeply ingrained in them.
- Having the willingness to learn – Entrepreneurs often face problems that others have not solved already and are, therefore, always looking for new information that can help solve these problems. CEOs are curious, smart and doers of quick and sensible experiments.
- Be able to manage risk – CEOs excel at swiftly identifying and removing as many essential risks as they can. For instance, an organization generally must top $100 million in revenue if it wishes to go public. So, if trying to raise money, the CEO would target a market that is much bigger than $1 billion, because venture capitalists usually don’t believe that a startup can get more than 10% of any market.
- Be able to work with people smarter than them – Smart CEOs are not afraid of working with people who know more than them; in fact, they prefer that. They use their wit and charm to attract, employ and motivate the best employees on the planet.