Chief Executive officer… maybe you've always dreamt of seeing the title next to your name, or perhaps you just found yourself in the driver's seat due to a coincidence. Either way, from the moment it was decided, you are it. Now everybody is looking up to you for guidance. But where will you find advice?
Here is the first-time CEO’s must-have checklist to get you started.
1. Find a startup community
Before anything else, you'll need support. From like-minded people. From people who faced the same question and from people you can consult. These are entrepreneurs, founders, new CEOs, top executives, etc.
These communities engage in meetups, accelerators, municipal education centers, and universities. Try to allocate the time to find the best framework for you, and keep trying other communities once in a while.
There are stage-related communities, industry-related communities, subject-related communities, etc., so you might find yourself taking part in multiple communities. Keep in mind that if you get something from the community, you are expected to pay it forward, and so you should. Also, keep in mind that participation within these communities is essential but not the main event, so don't lose focus.
2. Organize your organization
If you ever spent any time in a large corporate, you have experienced the rigidity of I.T., process, and senior management. Usually, I.T. will dictate everything from H.W. equipment used to allow cloud services, and if you were allocated with a Dropbox folder you, couldn't just replace it for Google Drive.
Same with processes. If you wanted to buy branded notebooks for your team, many times, the process would have made sure you walked a trodden path you might have been very unhappy with, yet you didn't have much choice.
As a first-time CEO, it is very tempting to design many processes to feel and show control. But startups are exploring and learning organizations, and rigidity is toxic to them. You want to encourage people to explore and try things in many functions, but some points need your immediate focus, especially at the beginning of your journey:
Data management. and Hiring process
Data management is key to being able to scale your team. Think of questions such as:
- Where will the teams store their data?
- How will they find what they need?
- How will they access the data from anywhere?
- Can my current decisions sustain team growth to 20 employees?
- Can I limit access to some areas in my repository?
- Who will manage who has access to what?
- How will the board of directors access data?
Google Drive, One Drive, DropBox, etc., are all valid starting points. Research for pricing as it tends to hike fast with added users and functionality.
As for the hiring process, this is imperative to allow your organization to scale, build the right culture and keep you safe from legal lawsuits. Consult other entrepreneurs and get legal advice.
3. Everything goes to the startup budget
Budgeting is tedious, daunting, and as enjoyable as sticking a fork in the eye. Maybe less enjoyable. But going about without budgeting is just like scuba diving, without an oxygen gauge. It might work in very few cases, but it will result in a disaster in most cases.
Startup budgeting forces you both to plan as well to prioritize:
- Super cool office or better-paid team?
- More marketing or more features?
- Fundraising roadshow or conference booth?
While maintaining a very detailed business plan is worthless, the budget should be monitored to see if the plan vs. the actual numbers converge or the gaps are too big. If the gap is too big, it's time to plan again and possibly introduce some changes.
4. Hire the L.A. team
Lawyers. Accountants. Done.
In many cases, the L.A. team is hired faster than it took you to read the previous paragraph. You hire your cousin as the company's lawyer and think that you might be able to manage the finance until the yearly tax audit, and that's months away. Probably a bad call for a small lifestyle startup and a terminal decision for a tech startup.
Every industry has its echo-system, and you want your L.A. team to come from the eco-system. You can identify how relevant they are by the companies and investors they represent.
Your cousin would not know about the best incorporation structure for an early-stage tech startup, and you might miss on essential grants and tax exemptions you may be entitled to. A strong L.A. team will guide you, help you, and ensure you don't fall into the traps many others have.
So, it would help if you had an excellent L.A. team, but a word of warning. You don't need the best L.A. team, or rather, you don't need the most expensive L.A. team. Some prestigious firm's prices will cause you to burn cash like it's going out of fashion.
It would be best to have a well-balanced L.A. team: one that is very knowledgeable about your stage and field but still affordable. A good rule of thumb is that if your G&A is more than 20% of your total P&L, you probably should consider reducing this cost using a different L.A. team.
By the way, I'm referring to them as the L.A. team to make it easy. In reality, you'll most likely engage with a legal firm and an accounting firm. You might hire specialists down the road, such as I.P. lawyers, but that should not be your guiding rule at day one.
5. Build your startup team
Imagine you became the manager of a football team. You aim to take the championship in 5 years, and you're building the team from scratch. How would you go about doing it?
Some people would argue that with enough budget, its' easily doable, and without it, it's impossible. But since we've all witnesses, all-stars teams fail time, and again, that is probably not the only answer.
Start by planning:
What are your near-term goals?
What are currently the main weaknesses of the team?
Realistically, what does your budget look like?
Usually, you'll need to repetitively answer these since you might decrease your goals simply because you can't afford to aim at them with the current budget. You may acknowledge your team in frontend development capabilities, but dedicated F.E. engineers might be a luxury you can't afford.
Also, think of your management team and how your company will grow in the short-term vs. the long term. Startups tend to grant top executive titles to middle management and middle management titles to single contributors. Every developer is an architect, and every architect is a CTO. This "title splurge" can somewhat reduce hiring friction in the short term but introduces complexities in the long term.
6. Stay healthy
You are young and healthy, and you want to keep it that way. The reality is that startups take years to mature, and a lot will change through this period, including you. Good health can be turned into bad health, and bad health will not allow you to work as well and as hard as you could have, given your natural potential.
Moreover, a bad health problem can force you to divert attention to solving it, diverting attention, and focusing away from your job. So no, staying healthy will not guarantee an exit, but it will allow you to work, and putting in the hard work is imperative for success.
When considering your health as an entrepreneur, some guidelines are picked up from the general population guidelines, such as keeping your weight in check and doing sports. But entrepreneurs operate in an environment that is characterized by a high level of uncertainty and stress. If you don't manage it, the stress will take its toll on you, both mentally and physically. Stress can be managed and monitored, so research and find the stress management method that works for you.
7. Remember the lessons learned from being an entrepreneur
Learn from your mistakes, and don't fret about failures. You are the first-time CEO, so everybody is aware of the situation. As long as you don't dust failures off but rather acknowledge them both to yourself and your environment, you'll have fantastic learning opportunities that will make you a better CEO.