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Mar 28B2B CFO

The 6 Must-Have Skills For A Startup CEO

Mar 28B2B CFO
Startup CFO Abilities

The 6 Must-Have Skills For A Startup CEO

Only 10% of Startup companies succeed – no wonder, an article published in Forbes Feb 12 highlights the wide ranging skill set required for a Startup CEO – Here is a link to the article.

http://www.forbes.com/sites/georgedeeb/2014/02/12/the-must-have-skills-for-a-startup-ceo/

 Chief Executive Officer?  Chief Visionary?  Chief Cheerleader?  Chief Salesman?  Chief Funding Officer?  Chief Communications Officer?  Chief Team Builder?  Chief Lightbulb Changer?  Chief Coffee Maker?  Yup, all of these titles apply to the role of a startup CEO.

Things just don’t happen by themselves overnight – the process of developing a team will take some time and hard work.  In the meantime, guess who fills in the gaps?

When it comes down to the core skills required, a startup CEO needs: (1) a clear vision of where the ship is sailing; (2) a finger on the pulse of the industry and competitive trends, to navigate the ship over time; (3) solid team management skills to keep all employees sailing in the same direction; (4) impeccable sales and motivational skills, while maintaining credibility with clients, investors and employees; (5) to keep the business on plan and budget; and (6) keep the company liquid.  I’ll tackle each of these points below.

1.  Set the vision.  The first two points really go hand-in-hand.  In order to create the clear vision, you need to have a good sense to what is going on in the industry and with competition.

What is unique about the company? Why will the buyer choose you rather than competitors? The vision of the unique offering must be articulated clearly so the company can adopt it into its core.

2.  Monitor key trends and pivot accordingly.  But, the CEO’s job is not done setting the initial vision.  He or she must stay on top of key trends in their industry or competition to navigate the ship over time.   …       It is the CEO’s job to constantly watch these kinds of economic, industry or competitive movements over time, and to respond accordingly to keep the ship afloat.

Things out of your control change, your original plan must change too.  That’s just what happens in the real world, expect it, watch for it and adjust accordingly.

 3.  Keep the team focused on the same goal.  Another job of the CEO is to make sure all employees are clear on the vision, and that all staff are sailing in the same direction.  …  You will never be successful if your team does not buy into the vision, or if they feel their good ideas for improving the vision are not being listened to.  Then once everyone is firmly on board, keep them clearly focused on the goal.

If you are not keeping the vision in front of your team continuously, expect that “your ship” will drift.

 4.  Evangelize and motivate.

Once the vision is set and being maintained over time, now comes execution.  And, one of the key execution requirements for any startup CEO is to be its Chief Evangelist.  This includes cheerleading the staff, from top to bottom, and getting prospective business clients and investors excited about getting involved with the company

It starts from the top – the CEO and top management set the tone of an organization.

 5.  Manage to key targets and budgets.  Keeping the business on plan, on budget and liquid is a no brainer requirement for any startup CEO.  The CEO needs to set acheivable proof-of-concept points, and put key managers in place for hitting those goals.  That means building a management dashboard of the key drivers for your business, that are going to dictate its success or failure.  …   Figure out your key drivers, and get the right team members to manage them accordingly.  But, more importantly, you need to be able to quickly identify when things are not going to plan, so you can put new initiatives in place to make up for any shortfall.  The longer you let cash-using problems go unfixed, the shorter your liquidity runway, and the higher odds you will run out of money and potentially go out of business.  So, plan accordingly.

Preaching to the B2BCFO choir – Focus on the right metrics ”You can’t manage what you can’t measure”

6.  Keep the company liquid and in business.  The worst thing that can happen to any startup is running out of capital mid-launch or prior to full proof-of-concept, that would attract additional capital.  So, it is the CEO’s job to make sure those proof-of-concept points are clear to the entire staff, a reasonable timeline has been created to achieve those points and the company has enough cash (including a cushion) to get to those goals.  The best people to solicit proof-of-concept input are your prospective investors.  Ask them, “what are you looking for before you would be willing to fund our business?”, and firmly focus on hitting those targets. 

For a powerful discussion on the importance of cash management see  – The Danger Zone, Lost in the Growth Transition, Third Edition, was published by Jerry Mills, Founder of B2B CFO®. This book is “A book for the entrepreneur who owns a growing business”.

B2B Truism: The Danger Zone is created when the cash needs of your company far exceed the cash available to meet those needs.

To learn the roles and responsibilities other startup executives within the management team, you can read this companion piece on the Red Rocket Blog.
George Deeb is a Partner at Red Rocket Ventures and author of 101 Startup Lessons-An Entrepreneur’s Handbook.  For future posts from George, please follow him here or on Twitter at@georgedeeb or @redrocketvc.

 

photo credit: successful business woman on a laptop via photopin (license)

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