Startup Entrepreneur to Company CEO

by Adam on August 1, 2013

Being a startup entrepreneur can really mean the dog’s life (before that billion dollar Instagram exit, that is). Late nights, gruelingly long hours, ramen for dinner, or sometimes no dinner at all. But, it’s for the love of bringing new ideas to reality, for doing something radically new that many entrepreneurs take up the mantel of innovation and set out on their own course. It’s a long road, one that can take many years to come to fruition in the form of funding, hiring and growth.

Less often talked about, and more often the even harder road to walk is the transition from startup entrepreneur to company CEO that can happen to the most successful businesspeople. Many will say there isn’t a difference, but as startups grow beyond their humble beginnings, they become larger than any one person, and become more about the entity itself. It is at these crucial times that startup founders have to plan for the long-term viability of the company, focusing on a few key issues:

  • Culture Setting – In the beginning, when a company is two or three people, the culture is largely defined by everyone around the table. Late nights bleed into early mornings, ripped jeans and t-shirts are business casual, and the confined space of startup innovation breeds an intimacy among founders that is second only to that of life partners. But, as companies grow from 2 to 4, and then 4 to 8, and beyond, setting culture is both hugely important and cannot be left up to the individuals. Later in a company’s life, culture setting becomes an HR function, but before that, it is up to the founder to set expectations and to lead by example. This includes everything from work-from-home and sick-day policies to expectations around dress, meeting schedules and more. And, again, it’s not enough just to set the policies. Founders have to lead by doing, and also remind new employees about behavior that is outside of these culture expectations. It’s a tricky balance both because the culture you set at the beginning will likely be with you for the long haul, and also because you have to create a balanced culture that doesn’t stifle innovation.
  • Hiring – Too soon, too late, or just right? The question of when and how to expand is inextricably linked to culture, but it also has serious implications for company growth and a founder’s ability to succeed. I’ve talked with many entrepreneurs who say that their first order of business after finding funding is to find talent, oftentimes in the form of developers that are hard to come by. But, these same entrepreneurs have never hired anyone before in their lives. What do you look for? What constitutes a good hire? And how do you balance salaries with intangible benefits? Hiring the right people often comes down to a mix of relationship, skills, and gut reactions. Also, keep in mind when hiring that you have to take into account issues around job training and acclimation, expectation setting, and also responsibilities management. If you hire someone and don’t prepare properly for those first few weeks, it may end with a lot of mutually failed expectations.
  • Delegation – Congratulations, you’ve made it this far. You’ve got a strong team, a tangible culture that leaves your employees feeling motivated and happy…and 15 direct reports. As entrepreneurs, we are like parents sheparding our babies. We feed them, love them, fund them through their early years. But, inevitably, we have to know when to let go. At some point in the growth of the company, it will become too much to manage all the day to day tasks and keep everyone on target. Between marketing, development, strategic initiatives, biz dev and more, an entrepreneur can easily get lost in the weeds in later days rather than focusing on long-term vision. Delegation is the key both to success in building a company, but also to helping employees feel they have value and responsibility in the organization. The exact number of direct reports can vary from company to company, but as you grow, try to identify the key areas for company success and move people into higher level positions to oversee those areas. Usually, you won’t have more than four or five in these early days, which will drastically reduce the number of direct reports, while also setting up a company hierarchy and establishing the beginnings of a promotional track for employees looking to advance.
  • Founder Roles – With all of the above emphasis on those around you, it’s easy to forget about the one person that started it all. As a founder, make sure to craft a role for yourself as the company grows that is meaningful, that includes elements of what you enjoyed doing as a solo entrepreneur, with the hardcore aspects of running the company for long-term success. Founders who don’t stake a claim for themselves may find that they quickly become rubber-stampers, outsiders looking in as their company grows, and that’s not nearly as fulfilling as where the entrepreneurs road starts. Be sure that every day you are doing what you love. Just because you trade the startup life for the accoutrements of a larger organization doesn’t mean you have to sacrifice the excitement, fast-paced environment and critical thinking that got you there.

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