mastering transition from founder to ceo
Post on 18-Oct-2014
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Founder to a Successful CEO
Mastering the Transition
Naeem Zafar UC Berkeley-Haas Business School, Charter Member TIE SV
www.NaeemZafar.com Twitter: @naeem
1 Entrepreneurship All rights reserved © Naeem Zafar
Personal Background • Faculty at Univ of Calif Berkeley Haas business school • Founder Concordia Ventures – advisory to entrepreneurs • CEO of three companies (semiconductor & software) • Worked in engineering, research, marketing & sales • Experience at one large multinational & 6 startups • One IPO (Initial Public Offering) • Wrote six eBooks on entrepreneurship (www.NaeemZafar.com) • Raised over $70M in multiple ways (VC, asset sale, debt, angel) • Traveled to 73 countries, lived in 3 • Brown University ‘81, Univ of Minnesota MSEE • Charter member of TiE Silicon Valley • President of OPEN Silicon Valley • Advised or mentored over1000 entrepreneurs
2 Entrepreneurship All rights reserved © Naeem Zafar
Five Stages of a Startup CEO
• Startup CEO
• Fund raiser
• Leader & the crisis manager
• Post-startup CEO
• The transition
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The Startup CEO
• Often an engineer thrust into being a CEO
• Engineers are problem solvers
– High IQ, but low EQ
• Unexpected role & demands
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Startup CEO
• Living in the “fog”
• Most of the time on trivial issues
– What is urgent vs. what is important
• Most problems are people problem
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Getting Used to New Role
• (almost) no one will tell the truth
• You will never be liked (again)
• You will have to learn to read between the lines
• Whom to consult with
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Culture
• Culture is “how things are done when there are no written procedure”
• CEO/founder actions defines the culture
– Collaborative?
– Authoritative?
– Consensus-based?
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Fund Raising
• Fund raising is most important job that a founding CEO has
– This cannot be delegated
• It will consume you
• Methodical about not over-shopping the company & researching before you approach investors
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O2
Filling the Roles
• CTO: outward facing technical evangelist
• Technical architect vs. professional development manager
• Sales head: look for a gladiator (not a professional sales person)
• What to outsource?
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Difference Between Sales Marketing
• Not everyone can make the transition
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Building Sales Organization
• You must be the first sales person yourself
• Do not hire too soon
• Sales people are hardest to hire
– But easiest to fire!
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Types of Sales People
1. “Hunters” or “gladiators”
2. Business development experts
3. Account executives (“professional sales” person)
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Gladiators
• Solo hunters
• They go away, don’t check-in frequently, bring back customers having sold “the product”
• Make sure that they sell what you make
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“the Professional Salesperson”
• Usually trained at a big company
• Require support staff to succeed
• Good at taking orders & building relationships
• expensive
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Biz Dev Professional
• Good at making large alliances
• Expensive to maintain
• Usually needed once you have a product
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Timing
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Bootstrap seed series A series B series C exit
Understand
customer’s unmet
need
Prototype
Product
development
Deployment
Proliferation
Timing
• You will need different people at different stages
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Bootstrap seed series A series B series C exit
Founders vs. Employees
• Owner mindset vs. employee mindset
– Employees have entitlement mentality
• First 10 hires will set the tone for the rest of the company’s life
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Startup Hiring
• “A” players hire “A” players,
• “B” players hire “C” players
• Are these the very best people in the world that I can get for this job?
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Leadership • Leadership is not pleasing everybody
• It is doing the right things, for the right reasons
• Are you willing to be unpopular
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Managing the Board
• Trust – build it, earn it
• Communicating bad news
• Communicating good news
• Being prepared
• How often to approach them
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Board Communication
• Three buckets
– Things that you are informing the Board
– Things that you want to present to the board and seek their input before YOU will make the decision
– Things that you want to present so that the Board can make a decision
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Priorities
• Separate what is important from what is urgent
• Spend at least one day a month of disconnecting & thinking about the big picture
• Create emotional buy-in from people
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• Conquering emails
– Open email client only twice a day
• 11 am and 5 pm
• Find blocks of time to do “projects”
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Essential Skills
1. Clarity – in your thinking
2. Networking
3. Communications
4. Empathy
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Crisis Manager
• Over communication
– Avoids gossip
• Listen, gather information
• Look in control
– Even if you don’t feel like it (and you wont!)
• Explain your actions
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The Post-Startup CEO
• Time will come to create processes
• Design efficient processes
• Structure can create efficiency
• Think scalability
• When to be frugal
• Minimize fixed costs so that you can be nimble
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Know the Timing
• Who exerts control & power in a company
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Startup 1st Product Sales $1-10M Sales to $100M
R&D Sales Marketing Finance
The Transition
• The time will come when you are not the right person for the job
• Deal with this gracefully
• Help plan it
• Seek mentors outside the company
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Founder
• This is an honor & obligation
• Wear it well
• It is beyond the title that you may carry
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Things Founders Forget
• Control is not same as ownership
• All ideas have to be chiseled away to be refined – encourage debate
• Learn about vesting, protect equity
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Don’t Lose Perspective
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Summary
• This transition is not easy & there is no school for it
• The most important asset is people – invest in people & reward loyalty
• This company is not the end game!
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www.startup-advisor.com All rights reserved © Naeem Zafar
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