Seth Sternberg is the CEO and Co-founder of Meebo. He previously worked in M&A at IBM.
I love talking to aspiring entrepreneurs—I do it once a week at minimum.
I often get asked “what’s the role of a startup CEO?” Sometimes people are curious about the pre-launch “CEO” and ask if a startup really needs one. If that CEO isn’t an engineer, what do they do anyhow? Other times people wonder what I do today as CEO of a 180 person company. In this post I’ll cover the pre-launch role, and in a follow-up, I’ll get into the role post-launch.
So what does the CEO, who at the beginning is really the general business person, do at a pre-launch startup?
Let’s go back to the beginning of Meebo, circa April, 2005.
Co-founders Sandy Jen, Elaine Wherry and I met every Wednesday night and all day every Sunday in an effort to get Meebo off the ground. We’d never meet in my apartment—it was always either at Sandy’s or Elaine’s. Why? Because they had the better computers and the faster internet connections. Frankly, that’s pretty emblematic of one’s role as the “business person” pre-launch. I’ve touched upon this topic before in a Founder Stories interview with Chris Dixon (embedded below), but it is worth elaborating on.
For most consumer internet products, there’s not a whole lot the business person can really do pre-launch. All of the company’s value will come when the team builds and launches a product, so that should be the primary focus. There aren’t any partnerships to be struck yet, as the product has yet to build any credibility in the market. There aren’t any folks to interview, as you can’t afford to hire a full team, and you’re wasting your time looking for pre-launch financing—a controversial statement these days, I know, but that’s a topic for another post. So what can you do if the most important thing is simply to minimize all distractions in the pursuit of getting the product launched?
Well, really, the business person’s job, until the last 2-3 weeks before launch, is to be supportive.
When we got together on Sundays, I really couldn’t contribute very much real work. I could make the sandwich runs to the Andronico’s down the street (I still have the “buy 10, get the 11th free card” in my wallet). I could also take care of the mundane tasks like buying the domain name and paying the server bills. Heck, I could even suggest “that button might look better over there.” But that was about it. I was the support.
I began to wonder, “Should I even be here?” Frankly, it didn’t feel very good to sit there and watch Elaine and Sandy working away while I did comparatively little. I could just as well have been playing Frisbee.
When I wondered that aloud, the feedback from Elaine and Sandy was pretty clear: if you’re going to be part of this team, then we want you here.
We were all equals with our own skills that we each brought to the table. My presence, at some level, was moral support. At another level, it contributed to the team bonding that you need pre-launch. Post-launch, things will tend to get crazy, fast, so pre-built trust is critical. At the end of the day, it’s the team that really makes the startup. Strong teams—as Sandy is quick to point out—survive multiple ideas.
Let’s fast-forward to the 2-3 weeks pre-launch, however, where the business person begins to get a job.
First, go and line up the right law firm to get incorporated.
The standard deal, at least at the time, was $20K in legal fees deferred until you raise your series A. I don’t think much has changed. Make sure you get advice on which firm and partner to work with—the way your company gets incorporated can save you a lot of pain down the road. (Watch a relevant chat between Chris Dixon and Erick Schonfeld here). Do not work with a firm inexperienced in setting up startups. Rather, work with Fenwick, Wilson Sonsini, OMM, Gundersen, Orrick, and the like. And even in those firms, ensure you’re working with the folks who have startup creation experience—all partners are not created equal.
Second, figure out your launch strategy.
Do you want to line up a bunch of friends to test your product before launch? Do it. Then corral all of their feedback and help prioritize it for your co-founders. Do you need to find a couple of folks who can introduce you to a blogger or two to write about your launch? Find them and go pre-brief those bloggers. Make sure you also line up your friends to give you some social media mojo—get them to Facebook and Tweet your launch.
Third, find a good mentor or two.
It’s important to find someone who is passionate about what you’re up to and who genuinely wants to work with you and your team to help you create an awesome product. Someone who is perhaps 2-4 years ahead of the process from where you sit, who has seen good and bad, and who can guide you toward good choices and help you avoid potentially painful early mistakes. Ironic, but when you have the least experience is also when you make a bunch of choices on how you set up your company—choices which will potentially burn you or save you years down the road.
In a future post, I’ll get into the business person’s role post-launch. But before we end, one more thing: do you even need a business person pre-launch since they do seemingly so little?
The answer is yes, for three basic reasons.
First, post-launch, the business person’s job becomes very important. You want them there for their actual work product (beyond their amazing ability to remember your sandwich order) post-launch. You don’t want to go through the pain of finding this person post-launch when things get nutty. Rather, you want them lined up and ready to go from the start.
Second, just like it’s unbelievably hard to find great engineers, it’s also unbelievably hard to find great business people. Just like a bad engineering co-founder can help ruin a company and a good one can help make a company, the same goes for business folks. Once you find a great engineering co-founder, hold onto them as tight as you can. And once you find a great business co-founder, do the same.
Third, team bonding is really important. The more time you have to do this, the better. I’ve argued that there’s nothing more important in getting a company off the ground than finding and putting together the ultimate founding team. This bonding is super critical in the early days because you will likely spend years together. It’s hard to explain ust how important it is that you understand and trust each other, implicitly. The sooner you get together as a unit, the better off you all will be.
Photo credit: Flickr/FotoosVanRobin