The first time CEO’s must-have checklist
Chief Executive officer… maybe you’ve always dreamt of seeing the title next to your name, or maybe 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 guidance?
Here is a short checklist to get you started.
1. Find an entrepreneurs 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 with. 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 if forward and so you should. Also, keep in mind that participation within these communities is important 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 IT, process, and senior management. Usually, IT will dictate everything from HW equipment used to allowed cloud services, and if you were allocated with a Dropbox folder you, couldn’t just replace it for Gdrive.
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.
Now as a first time CEO it is very tempting to design processes for everything to feel, and show control. But startups are exploring and learning organizations, and rigidity is simply toxic to them. You want to encourage people to explore and try things in many functions but there are some points that need your immediate focus especially at the beginning of your journey:
Hiring process and data management.
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?
Gdrive, One Drive, DropBox, etc, are all valid starting points. Do your research on 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, to build the right culture and keep you safe from legal lawsuits. The best advice I can give you is to copycat the process from other entrepreneurs you look up to.
3. Budget everything
Budgeting is boring, daunting, and as enjoyable as sticking a fork in your 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 in most cases, will end up in disaster.
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?
Unlike a very detailed business plan that is worthless, the budget should be monitored to see if the reality and plan converge or the gap is too large this way or another. 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 LA 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 just 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 it’s echo system, and you want your LA team to come from the eco-system. This is obvious from the companies they work with, the investors they represent and the people they network with.
Your cousin would not know about the best incorporation structure for an early-stage tech startup, and you might miss on key grants and tax exceptions you may be entitled to. A strong LA team will guide you, help you, and ensure you don’t fall in the traps many others have.
So you need a good LA team, but a word of warning. You don’t need the best LA team, or rather, you don’t need the most expensive LA team. Some prestigious firms prices will cause you to burn cash like it’s going out of fashion.
You need a well balanced LA 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 by using a different LA team.
By the way, I’m referring to them as the LA team just 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 IP lawyers, but that should not be your guiding rule at day one.
5. Build your team
Imaging for a second 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 FE engineers might be a luxury you can’t afford.
Also, think of your management team and how will your company grow in the short term vs the long terms. Startups have the tendency of granting 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 somewhat reduces 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 changes 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 to divert all attention to solving it, diverting attention, and focus 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.
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 amazing learning opportunities that will make you a better CEO.