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Ryan Rutan: Yeah. Have you ever asked yourself, should someone else be running my company? This is a question that many founders will ask themselves in the course of running their startups on today's startup therapy podcast. We're going to discuss why superior managerial skills don't necessarily trump a founder's passion and knowledge is the company's scales and how to decide what to let go of and when. All right, well, so they were going to dig into something that that I know you and I have both spent a lot of time thinking about. I think most founders spend a lot of time thinking about this. And and it's interesting because as people who have started the companies, for some reason, founders seem to spend an inordinate amount of time believing or questioning whether there's somebody else who could be more qualified and do a better job than you're doing as the founder and Ceo.

Wil Schroter: And it's hard not to ask that question. I think all of a sudden you went from a person with an idea and say the marketing department

Ryan Rutan: of some company

Wil Schroter: to now person running the entire company and think about that for a moment. Most people that become startup Ceo? S haven't necessarily been a Ceo their entire life. A Ceo is an incredibly multifaceted job, right? You've got to understand finance, you've gotta understand marketing to understand product development, business development, you have all of these skills that all of a sudden overnight, you need to know it's damn near impossible to sit there and say, oh boy, I'm qualified for all these things all at once. It's like becoming the president. No one's qualified for that job

Ryan Rutan: the best. You just do it. You do it right? What's your qualification? I'll tolerate it.

Wil Schroter: Yeah, I'm willing to do it. That's good enough. And so I think what happens is all of this responsibility and all of these unusual skill sets are thrust upon you all at once now multiply that because now you have employees that are showing up counting on you to know these things that you couldn't possibly know now, you have investors that just showed up counting on you to know all these things that you couldn't possibly know right now. You have customers that are agreeing that they want to buy that product and you're thinking back of your head. I just built this thing like nine months ago. And you're thinking there has to be someone that can make up for all of the skills that I don't have right now. There has to be someone with the experience that's gone through this before and knows the answers to this. And the truth is there are people with those skill sets. There are people with some of those experiences, but those people aren't necessarily the founders of your company. And I think that's what we should unpack today. We really need to split those two things between skill sets and experience in just what it means to be a founder.

Ryan Rutan: Yeah, for sure. You know, it's funny as we were, as we're controlling this. I'm thinking about it and I'm going back to another podcast that we did, which was that, you know, am I a fraud, right? And and the thing that we talked about through the course that podcast was of course you are right. And of course you're going to feel that way because you're building something under under circumstances of extreme uncertainty. And if I were to put those things in order, that's actually the first hurdle that you clear is that M I. A fraud and you'll probably revisit it throughout your career, right? But I think that's like the first one. You get over that and now you've built it. So to the point that you were just stating that you're you're nine months in, I've built this, there is something there. Now maybe I feel like a little less of a fraud now, but now, instead of feeling of fraud, I just feel inadequate because now I understand some of the requirements. Whereas in the beginning there wasn't a way to gauge the qualifications because you had no idea what was actually going to be required. Now you're facing some of the requirements and you're going, well I might not be a fraud, but I'm certainly not qualified and I think that's kind of stage two, right? It sounds beautiful. Doesn't you escape being a fraud and now you're just inadequate.

Wil Schroter: Awesome. Let's think about all of the things that we tend to do in our lives that tend to be very sequential, right? We tend to start with with the basics of education and then great after grade we move up and we get incrementally more education. We start to play a sport and we start in the junior varsity and we move our way up to varsity. We move our way up to the first line and we get into that sport. Everything is very sequential. We get into our jobs and we started the internship in the marketing department and we move our way up to CMO. This is the first time we've been given a job where every single skill in every single way to play has to be at the top of its game immediately in games we've never played before. There is no version of that to your point of looking into the abyss, but also looking at your own skill sets that are wildly undefined, undeveloped in all of these different categories and somehow feeling good about that. And so I think the job of a startup ceo, of a startup founder is inherently a job where you're going to be wildly deficient in so many categories no matter who you are Now, there's a few ways to attack that one ways is often when you're young is, hey, I actually don't know anything about anything. I'm not so worried about the fact that I don't know too much about finance or marketing because I don't know shit about anything and you can kind of look at it all unilaterally. I think it becomes more challenging for some folks as they're further along in their careers and they say men, I was the most impressive person coming out of the marketing role at the company that I just left, or I was the top brand manager or I was the Cto of another company and yes, I'm still the best at that. But now I'm getting called on to do stuff that I don't I don't understand whatsoever. I have no experience with and I'm used to being the best, How do I contend with that? I must be broken somehow and that's just fundamentally untrue.

Ryan Rutan: That's yeah, that's fundamentally true. I think the other thing that happens in parallel is the further you go with the company, right? So there's there's both the progression through your own career and like you're you're kind of looking back at past successes and saying like I used to be amazing what happened to me, well, nothing happened, you started playing a different sport and you're not as good at it yet and that's okay. But I think the other thing that exacerbates this entire situation is that the stakes become higher, the more time you spend, the more pressure you feel that you should be getting it right. And the reality is it's actually the opposite. The further you go into this thing, the wider the variety of activities of skills of, of requirements that you're going to face become. And it gets incrementally or in some cases exponentially more difficult, broader and harder at the very beginning you can kind of focus on like let's just just customer development, right? Or product development or you know, just idea validation, the further you go, the greater the chasm becomes between, you know, that that successful life that you had in the past and what you're trying to do now. And I think that the increase in that pressure makes it feel all that much worse.

Wil Schroter: But I think that's where we need to start to define two very different parts of what it means to be a founder and for folks that are challenged with this right now, they're asking themselves those questions and maybe they're really anxious about it. This is probably the time to lean in a little bit to this discussion because this is the Foundation for all this and Ryan and I talked about this before, There are two aspects to being a founder. one aspect our skills and experiences, those are the things that you're probably thinking about right now. I've never done business development before. I've never raised capital before, I don't know understand how to do startup finance and we get it. You don't, those are skills, you don't have, those are classes, you haven't taken, There's another side of it which are experiences I've never grown a company to 10 people, 100 people, 1000 people. You haven't and until you do, you won't have those experiences. Now that's bucket a and those are things that you absolutely can't do anything about today for yourself, right? You're just not going to, you can't download that information secondly, on the other side you have what it means to be a founder. Now, this is going to sound a little soft and snow flaky, but Ryan backed me up on this.

Ryan Rutan: I guarantee,

Wil Schroter: I guarantee this exists within founders. These are things you just can't hire for. Ergo, you can't replace yourself, you can't hire for the willingness to run through the abyss for just your own vision, right? You can sell someone on a vision, but there is something that is so hard to replicate when you yourself believe, probably ridiculously so that where this vision can go, where this company can go, what you can do is just so exponential and so amazing. Even when everyone else thinks you're a total idiot, right? You can't hire for that, you can't hire for this, this extra gear that founders have, where they give a shit about things that no one else really cares about, right? It could be tiny little things like where the next dollar got spent right now CFO sort of, you know, looks into that not quite the same way the founder because it tends to be his or her money or other things like I get so upset at what the comments are when they're talking about our product because this is my baby is something I created,

Ryan Rutan: right? I just felt my kid ugly sir.

Wil Schroter: Exactly. It's your kid, right? You can hire someone to look after your kid, but it will never be there kid. And so it's

Ryan Rutan: a great analogy.

Wil Schroter: There is a time in the business where you being the parent, if we're going to stick with. That analogy is what's most important. There's also a time in the business where it doesn't need a parent anymore. It's ready to go out into the world and other people can run it at that time. They are more qualified than you different discussion. So Ryan having said all that. I think one of the things we should probably talk about is this progression period where there's a time and a place where you need to be fully the founder and there's a time and a place where you probably need someone else to be the ceo, so to speak. And I'm using these as the same job in this case, but where there's a handoff exists, right in your experience where have you seen that progression?

Ryan Rutan: Well, so I think it's interesting. I think that literally from the minute you start the company, you're growing, you're scaling and you're you're beginning to replace yourself. And I think this happens from from the very beginning, um, in the beginning you may have to do everything, but there's certainly very few cases that I can look at and say that needs to be the case and it should be the case forever. Right? So from the very beginning, you may be doing everything simply because there's nobody else to do it right? You're, you're the Ceo chief cook and bottle washer, right? You you do it all front to back as you begin to scale the company is, the company begins to grow as you add customers, you had employees, you're going to begin incrementally handing off responsibilities right now, if you're just scaling production, perhaps that doesn't happen when you begin to scale the nerve center, the strategy of the company when, when decision making gets handed off, when people begin to have autonomy in their roles at this point, recognize it or not, you've begun to replace parts of yourself, right? You've begun to replace some of your value in the company with with value. Another person now doesn't always mean that there were more qualified to do it. Maybe it just means that you get to go and do the thing that you're most qualified to do. And so in my own experiences and having watched a lot of other successful founders navigate this process, the ones who do it right, tend to gravitate towards the things that their best at right. If you're not good at startup finance, you may have to do it for the first two years, but at some point you're gonna offshore that to to another company, you're going to give that to somebody within, you're gonna hire a mini controller, a CFO or whatever. And so I think it's this incremental replacements, right? And you know, in terms of the triggers for full replacement, if that's what we're really talking about here, like when do I step aside, when do I take the the nonexecutive chairperson role and and slot in the Ceo? I think that's a lot harder to determine in a vacuum. I think that it becomes a lot easier if we look at a specific example. But I think that's simply just saying like there is a point in time where you've eclipsed your skill set, I guess for me it would come down to like, is there a point at which where I feel like I've kind of hit my highest score, right? Like this is the thing that I'm really good at that I drive towards. No, it's not. But but within certain aspects I'm saying not just at any level, but within the thing that I know that I like, so go back to the example you used, you're a CTO at another company, you launch a SAS company, you're now the Ceo you grow that thing up to a certain point when it's no longer technology, which is where your superpower lies when you've been able to get rid of shed off outsource the tasks that aren't your primary skill set where your leadership and vision no longer drive the primary growth of the company. I think this is the point where the consideration becomes a bit more real

Wil Schroter: correct and I also thank you again, if we're sticking with with the parent analogy at which kid you at which point you've taught your kid to be able to survive on their own and growing their own, it's about, you know, helping them grow and mentor them, but it's not about nurturing them the way you did when you're changing their diapers, right? Same with your business, right in the early formative stages at that point, it needs all of your time, all of your attention, even if you're kind of bad at a couple of things, If you're a little bit bad at hiring me for a little bit bad at fundraising, there's probably no one else that's going to be more passionate at that moment in time about getting it done and you're going to try to lock onto as many types of mentorship as you can get to get better at it in the back of your mind, you know, that if you can continue moving this thing forward, like no one else can, you can start to bring on some of those skill sets as you go forward, even if you have to kind of like stumble through it for a minute as you're trying to get the wheels moving

Ryan Rutan: Sure the transition points are always going to be the hardest, right at that moment when you do shed some responsibility makes somebody else responsible for it. It's always going to be more difficult than it was the day before you did that for a period of time and then, and then it should if you've hired well, um, and you set the expectations right, you get the right person in the role and it's the right role and it's clearly defined then then that should, that should pass.

Wil Schroter: I've seen organizations once they hit a mark and this isn't definitive, I'm just using this as a reference point once they've hit a mark of 50 to 100 people once they start to have departments and those departments have very clear management structures within them and the business goes more from being, I'm starting this from nothing and a little more towards being, I'm running a company and by that, I mean an organization which has lots of pieces. I defined it when I was running my first company as when I'm spending more time in meetings that I am doing anything meaningful within the company. Then at that point I'm just running a company, I'm not building a product anymore. I'm not forming a company now. This isn't a hard and fast line of demarcation here. However, what tends to happen is as the organization grows typically by headcount, I'm going to stick with that for a second. Typically by headcount, the types of interactions, the types of skill sets that the ceo needs just are a lot different. It becomes more around diplomacy. It's around organization. It does rely on experience because if you've never grown an organization passed 100 people and you're doing it for your first time, there are people that can do that a lot better than you at that point. Right? I think you nailed this. I think at that point once that you've kind of done your part, you've grown the child so to speak. Then yes, you zoom out a little bit and you say, where am I most effective? You know, where can I apply the most amount of my skill set, be it technology or vision or biz development or whatever. Yeah, that's appropriate. But until then sort of your baby, it's it's up to you to take care of it up to you to drive it. What I think we need to talk about isn't just the transition, but the myth that people have that there's this seasoned executive that just knows everything that can come in and make up for all of your shortfalls. Right, right. I got to tell you that person actually doesn't really exist. So not in the way we think it does. Here's an example when I was first starting out building in an ad agency digital agency, I was 19 in my mind, anybody that could spell business was vastly more qualified than me and they came in and used any business term. They had so much more knowledge than I did. And so I just assumed that that there was just this business Yoda that I could bring in and they could teach me how to build this business and coach me and give me all the right decisions. And I was young and naive and I was wrong. But here's the mistake I made. I tried to find that person we tried on four separate occasions to hire my replacement because I had that much anxiety about being a startup Ceo right? I was very young during the nineties when there weren't that many young ceo. So everyone around me was saying, yeah, you're probably too young to be a Ceo. Probably put somebody else in that spot. And so at the time were very small agency. We only had 30 or 40 people and every time we would bring someone in it would go horribly not because they didn't have more experience. I was so young, you could have brought anybody in with more experience. They didn't have the drive, they didn't have the same passion. They didn't have just that weird ability that we have as founders to see around corners the way other people can kind of see where the market's going before the market even knows it's a market for the folks that we bring in, they're there to support those visions. They're there to help kind of grow with that vision, but not to replace it, not to replace us as the founders and pretend that they can surrogate grow this baby. I just I've never seen it work.

Ryan Rutan: No, they have they may have the experience, but they don't have the intimacy. And I think there's a lot to be said for that, right? It's it's those less tangible connections. They may have seen another business Through that Milestone, or may have always just kind of started in a mansion track and maybe they didn't grow a business themselves, 200 people, 2000 people, but they've been in that seat and they know what that looks like and feels like mechanically. If you were just scaling a business. I think this is another important distinction that inherently you and I feel, but I think it's important to say it for audience. There's a big difference between growing a business and growing a startup alright. If you're growing an accounting consultancy, there's probably, I would say there's definitely somebody who knows how to do that better than, you know, anybody that's actually one of 100,000 accounting consultancy, is that exact business? The minute you're doing something that introduces any uncertainty into that situation, all of that goes out the window, there's nobody who's ever done exactly what you're doing before, meaning that that experience has value, but it can't be overstated, right? It isn't replicable value. It's value and it can be brought to bear and it can benefit the business. But you're giving up a lot when you trade only experience for the passion, the intimacy of having started cared for and growing that business to whatever stage it's at right now.

Wil Schroter: What I tend to recommend to people when they start to have these conversations is change the title, make it a C 00 and ask yourself the same questions. Do I need somebody that has operational expertise that I don't have, that I can bring in to help augment what I'm doing but not replace me because the two don't need to be the same thing, chances are if you try to find somebody and let's talk about what this is. We're talking about very small companies, we're talking about between 1 to 21 to 50 people. If you're looking at it saying, well Mark Zuckerberg had Sheryl Sandberg, Dude, if you create facebook different discussion right, by the way, that's sort of what he did do, right? You know, and if you're looking at Larry and Sergei in their early days bringing eric Yeah, different discussion. If you create google by all means have a very, very different discussion with this, but that's not what we're talking about the folks that are listening right now, we're creating initially small companies that may go on to become big companies And we're trying to solve this problem because we've got 20 people in the other room that are relying on us and we're feeling very anxious about our ability to lead them, our ability to fundraise our ability to all of these things. What I'm going to suggest is first pass right out the job description of a C. 00. Right at this job description if you want of a president if you need you know the titling associated with it. But don't write out the job description of the Ceo. Because at the end of the day, the moment you disconnect your D. N. A. Out of this system, it ain't the same company anymore. And I think it's ruinous for folks to try to do that. I just they're thinking that the only option is to augment the skills that they don't have with a wholesale replacement. It just feels like such a miss every time

Ryan Rutan: I agree. I agree. I think there's another interesting distinction there too in terms of and and you know, you nailed it with the ceo verse ceo. Overall. I think at the point where what you're talking about is creating operational managerial efficiency right? If efficiency starts to enter the conversation, you're probably at a point where there's some value in that discussion, right? Because growing something and dialing in and getting into the science of management and efficiency are also two very different things. You can be passionate about both of them. But let's be honest, one of them is a far more mechanical process than the other. The other side of it is goes back to this, the uncertainty thing, right? And that's you know, the notion that if what I'm about to do now with the business is a process regardless of how big or small. But that's replicable right? Like okay now we've we've we've launched our e commerce store, we've built some brand value, we've done these things now, we want to scale our customer acquisition. There's somebody who's done that before, not for your exact business, but they know how to take the data that you already have, apply that against the experience and knowledge that they have and do something with it. Right? There's another interesting distinction and this is this this came to mind as you were talking about like if you just started facebook great. And it's a different discussion if you just started google great. It's a different discussion. I think there's a huge difference if you're thinking about what you're trying to accomplish. Like right now, are you being drug behind the business? I. E. Like is it growing so fast? It's getting out of control. I hope so. Right. That'd be a great problem for most people to have. Usually not the case. That's the facebook or google situation, if the situation is I'm sitting in the driver's seat and I keep stomping on the gas and the thing just won't go any faster. There must be somebody else who can figure that out for me. I think that's far less likely,

Wil Schroter: right? If it seems really hard, it's because it's really hard. It's really hard. And let's take a couple areas where people often stumble. For example, I've never done fundraising before. I've never raised capital. I'd love to bring in a Ceo who's raised capital. Who can help me through this process. Let me point out a few things about that as somebody has a company here has helped people raise a half billion dollars in capital. That is true. People who know it better by all means can be of tremendous help. Yes, but your capital raising process is a moment in time. That's right. Your Ceo or leadership is for the rest of the lifespan of this company. If you do it right, yep, we don't want to hire or replace ourselves for jobs that really either we can hire out for, we can gather the knowledge elsewhere or this is just a moment in time. Yes, I'm in order to say, well, if I don't raise capital, there won't be a company. So I've got to replace myself in order to move the company forward. That's just the wrong answer. What you're saying is you need help. It doesn't mean you have to replace yourself to get it.

Ryan Rutan: I've made this joke before, but it's it's like it's slightly different. But if you, you know, you marry a carpenter so you can have your dream house, right, you have the short term objective of having this house you want to live in, you make a long term decision of marrying the carpenter, right? And so it's, it's the same notion that, you know, replacing yourself for this point in time for this campaign based activity because they'll be better at that. Well then you're immediately setting yourself up for having to have another transition once that period is over, Right? And so I'm just trying to perpetuate the cycle,

Wil Schroter: I've also found and we'll use fundraising as an example that for every skill you don't have, there's this big cloud of uncertainty of how all the magic in that skill set works, But if somebody kind of blows back the cloud peels back the curtain and explains to you like 3-5 tricks about what this thing is about and tells you just a few things you don't know all of a sudden, it doesn't seem nearly as complicated, you know, you're saying

Ryan Rutan: it gets Wizard of Oz really quick, it gets Wizard of Oz really quick.

Wil Schroter: You were saying, secondly, Marion carpenter to build a house as Ryan as you know, when I talked about from time to time, I'm a amateur carpenter in, in training and this is actually how I got into it. I didn't know anything about carpentry, all I started doing is for everything that I wanted to do. I went on youtube, I looked for the one person that could explain how to do anything from hanging drywall to to to doing flooring, etcetera. And as soon as he told me what the trick was and it was always used this tool and don't forget to do this, the whole thing was super easy right now. I'm not trying to distill every part of business down to that, but you'd be damn shocked how often whatever you think you don't know is a half hour to an hour's worth of conversation tutelage from actually getting beyond hell. This is the whole reason we have clarity dot FM 20,000 experts on there that can just tell you what you need to know if you're feeling stuck man. I think I

Ryan Rutan: just changed the tagline for clarity. Thinking about replacing yourself as ceo call us

Wil Schroter: first. Well, I mean really think about it. So what I think a founder has to be good at if they're thinking about, hey, I'm not adequate for the, for the job isn't whether or not they're adequate for the job. It's whether or not they're good at seeking the counsel to get better at those positions and or hiring somebody who has the, you know, who has those skill sets. It's rarely the answer is fire myself. Now. What I want to, if you're okay with this, What I want to change the conversation around to is when you should absolutely be looking at getting rid of yourself when you are the problem because I think it's worth talking about that too,

Ryan Rutan: for sure. And I think that that's I think that's that's really well in line with the kind of things that we try to accomplish with with startup therapy, right? It's it's talking about less of the technical how to here's the plan for that. And it's more about like the how do you understand yourself in this role as a founder? Right. And it's really hard to do right? There. There is no great mirror for examining ourselves with this. And so, you know, again, for our listeners, I hope this is what we bring the table for all of you. So yeah, let's do that.

Wil Schroter: Sure. So here here's the counterpoint. Is there a time when it's time to replace me? Hell yes. Just just to be clear. So this isn't just a hey, you know, you've got job security forever or you should have job security forever. You know, you'll hopefully have your equity forever. So that the upside is the same. But let's talk about when we can put our ego aside and when it's absolutely time to find someone else, I'll give you just a few examples and we can kind of build on those as we go. One example is where you are wildly proficient in one aspect of the business, for example, you're the greatest coder developer of all time, but you suck at everything else. I mean, you were just really, really bad at it. You don't like to talk to humans. You don't like to be in meetings. You don't care how finance works. You never want to talk to an investor so on and so forth. And that

Ryan Rutan: happens in Wozniak right

Wil Schroter: now right now. And exactly, it happens all the time. At that point, I still think that it's, it's your job and it's part of your charter to drive the business as far as you can. But look, yes, you're probably doing yourself a disservice by trying to torture yourself into. In this case, literally every single thing that a CEO does. Let's pretend there was like 10 skill trees, skill categories. If you love video games of what a CEO could do from marketing to finance the business development, to fundraising. And let's say your skill level is a 10 in product or a 10 in technology and it's a zero or in some cases a negative one and everything else. Yeah, yeah. You might want to find someone else. Again, I'll still differ. You might be looking for a president or a Ceo. Right. But my, my point still remains. There may be a point where you are so hilariously deficient in every other aspect of the business or equally speaking, you don't care. You actually, you don't want to be a Ceo, right? You just, you're just doing it because you're the first person that was there. Right. You would love anybody else to run the company. So you could just get back in front of your keyboard and code all day then. Yes, absolutely. Put somebody else there. You know what I mean.

Ryan Rutan: Just went through this conversation with, with two friends. Uh, one of them is recognized having done like four or five businesses now that he loves the initiate and grow and he actually has figured out for himself. He loves it up until about the million dollar revenue mark. And then for the types of businesses that he started and they've been similar at that point, it becomes about efficiency, it becomes about, you know, market testing and expansion things that he doesn't like as much. And, and he likes to step away at that point. And he's, you know, he's a chairperson on three existing companies now and he continues to do this. He just started another one. There are about 500,000. So he's halfway to, to exiting that one as well. And the way that he does. And he's had that realization right, that he really enjoys starting and scaling up to that point. And then it's not as fun for him. And he's at a point in his career where he can afford to make that decision to do that, which is cool.

Wil Schroter: There's another side of it, which is, there's a point that the business hits where your biggest challenges are no longer external external would be fundraising external would be customers external would be, you know, hiring in some cases as far as finding folks and all of your challenges are internal. Some of its politics, I hate to say it, but some of its politics, some of it's just organizing stuff like, hey, we have an HR department five minutes ago, but now we have an HR department now we have two different locations that we need to manage. Now we have to think about how we're going to sign a huge lease and how we're going to build up this space. If you look at your pie chart of how you would have spent your time as an executive in year one, let's call it your pie chart would say 80% product development and a couple other slices around things like getting your first staff members on board, maybe raising capital etcetera. A few years later, things have gone well congrats to you Now, all of a sudden the pie chart is 90% internal shit. Right. Actually, Ryan actually went through this when we first started the company. All I cared about again, this is that the digital agency, all I cared about was building web pages. I was just so fired up about it. I like to code, I like to design. I like to do the marketing. I was all about building the product. I was fully externally focused on our client work. But as we grew and we took on hundreds and hundreds of staff members all of a sudden I specifically remember this. I remember walking into our giant building, we built 200,000 square foot buildings. And I remember walking into our building one day And looking at my calendar and saying, I have 10 hours worth of meetings about upcoming meetings out of my day was spent doing anything external anymore. I didn't get to build anything. All I got to do is administrate people and I hated it. I hated it so much. I'm a creative at heart. So the idea of having to just do administration all day was an absolute nightmare for me. I was absolutely the wrong person for that

Ryan Rutan: job at right at that point, you're, you're reading peter Drucker books all day long

Wil Schroter: and just hating life. Right, brutal. And so there's a lot of folks out there that are actually, they jump out of bed in the morning to be in 10 hours worth of meetings? I don't know why it's not me. I I I can't, I can't say I'm about it, but that's what they're about. And the idea of having to create things from scratch, just their head explodes.

Ryan Rutan: Yeah, exactly. They want to operate within an existing process. It goes back to the notion of efficiency versus creation maybe would have been a better word. I use the word growth earlier, but I think creation versus efficiency. Right. Are we creating or rebuilding? And we're doing things under uncertainty or are we simply, you know, turning the screws dials levers to make this thing operate more effectively more efficiently, right? When it becomes about managerial science, it's a very different skill set. It's a very different person that tends to be good in leading that effort.

Wil Schroter: I think when the business goes from building in the form formative stages to scaling those are two different skill sets. Now again, that doesn't necessarily mean that the Ceo job needs to get replaced, but it does mean that the very least you as the CEO, I need to start shedding some of these responsibilities and putting them in more capable hands. Now, it could be that again, you're going back to this code or Ceo and all you want to do is write code, you maintain the ceo title not from an ego standpoint, but because you want to be damn sure that the direction of the company strategically does not change that, you're as close to the product as possible. But you hate being in those meetings, you hate talking about skill, you don't give a shit about where you sign your next office, like you don't care about any of that stuff right? But someone needs to and it's your job to get the hell out of the way in the right way so that someone else can do it. So yes, when you hit those junctures by all means get out of the way, but not until not until

Ryan Rutan: Yeah, absolutely. Now. And I think that the timing on that is absolutely critical. Yeah. You said it earlier. You, you tried to leave too early several times, several times over. And, and that has, that has as big a cost and maybe a larger cost than staying around too long. And I think that it's, it's more likely that the business survives under a Ceo who's less qualified than they could or should be for the certain challenges the business that point than a Ceo who parachutes out too early and turns that, you know that child business out into the world before it's ready to sustain itself through the challenges of that transition.

Wil Schroter: Right? And we can come up with with a million situations in case studies where the Ceo stayed in the founder status ceo leftist ceo and there's, there's different cases and I don't think you can say this is a one size fits all decision, it's very dependent on the personalities involved, the type of business etcetera. All I think we would like to convey to the folks listening is don't sell yourself out, don't just assume because you're missing some experience or you're missing some skills that you are not qualified for the ceo job or by way of that the founder job, you are qualified for that job because you started a freaking company. What you're talking about is you're missing some skills, you're missing some roles in the company and you want to backfill those by all means go and do that. But don't sell yourself out of a job along the way.

Ryan Rutan: That's a wrap for this episode of the startup therapy podcast. This is Ryan Rutan on behalf of my partner Wil Schroder and all the startups dot com family thanking you for joining us and we hope you'll continue to join us. Be sure to subscribe, rate and comment on itunes or wherever you love to listen to startup Therapy. You can find all of our episodes at startups dot com slash podcast. If you're looking for more amazing resources to launch or grow your startup, be sure to head to startups dot com and check out startups unlimited. It's everything we have to offer from our online university to our amazing community of experts and founders and even all the tools we've built like biz plan, fungible and launch rock. It's everything a founder needs visit startups dot com slash begin that startups dot com slash b E G I N. You'll thank me later.

Eric HodgeFeatured Reply

I remember reading about Sara Blakely in a Grad School Case Study. She brought on her experienced CEO when she hit $3million-$4 million yearly revenue. I thought wow that is pretty early.

Reply5 years ago

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Jack WhelchelFeatured Reply

This likely doesn't apply to anyone reading this site or listening to this podcast (reason being, anyone seeking this kind of information is already in a good spot), but I think if we're all being honest, the exception would be that there are people who are legitimately just bad at running companies. They aren't coachable. They don't take in new information. Their gut feelings are usually wrong. They may even just be lazy and putting in 5% of the required time. And, even still, some of them end up with awesome ideas that get legs. Those people definitely should hire a CEO as soon as possible. - Jack Colton, www.silentrich.com

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Abdul kilaubFeatured Reply

This first step is knowing yourself and being realistic. You need to understanding your weaknesses and strengths. The first question is somebody handling my weaknesses? Is my business process running efficiently and you have created way to improve your processes? Once you are confident that this is answered based of your DATA not your feelings, you should definitely find that right person to handle your company. Then I would recommend you find a create a special position that monitors that the person in charge and finds ways to improve.

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A founder/CEO should bring in someone to run their company when they can't do it effectively and/or don't want to do it any longer. This does not necessarily mean they replace themselves as CEO but can bring in a COO or Business/General Manager or even outsource some or all of it. There are many variations to this, and is actually why I started Right-Size COO: I had been part-time COO ro various startups that couldn't afford a full-time COO but needed that high-level business/operations support, so decided to offer it as a flexible, affordable service.

First, Today world EQ is more important than IQ. You should be very careful to choose someone how able to handle your employee and maintain your work culture. They able to identify and communicate with employee.

Yes, I personally agree with few points after listening to this pod founders not need to be the CEO if they are fail to sell there product and bad at bring up the funding.
But still it is his baby, he can hire a nanny to take care of his babe. But obviously you will take care of your baby more than the nanny but you should have to know plenty of things if it’s your first baby that how to take care in all the aspects. So, I don’t think that’s a wrong thing to take that position if you are not fit for it initially.

Great one. Do you have to higher someone experienced. How would you comment to have like students that are coming from college or University to to some of the work? would that work what are the advantages and disadvantages

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One of the most obvious first steps is understanding to know what you don't know. Having someone run the business with time tested experience is essential to getting the business off the ground and navigating the pitfalls that a new owner may not be aware.

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When you know that you keep your position because of your egoism then it's time to hire CEO.
When you are immerse by things beyond your capability then you are keeping your position because of your egoism.
Also you should consider your position when you know that there is something else you can focus on which fulfilling your goals either in this particular business or in something else.

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Start-ups are like babies. You begin planning for them to be on their own 9 months or more before they are born. I recommend to my clients to use a trusted advisor to be the CEO and the founder to be the Chairman. This has three distinct advantages. First, the Founder has someone to bounce, argue, and "blame" . Second, the Founder is already distancing themselves from day-to-day operations. Third, the Founder is in a position to not have to make a decision immediately. Peter Paul Mendel www.peterpaulmendel.com

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