In a company’s early days, the difference between C-level executives and the rest of the organization is simple — employees can walk away from a failure, but the leaders cannot. Under these conditions, certain kinds of people thrive in leadership roles and can take a company from ideation to production.
While there’s no magic formula for what works and what doesn’t, successful startups share common traits in terms of the way their foundational leadership teams are built.
We’ve all experienced what it looks like on the negative end of the spectrum — people making points simply to hear their own voice, leaders competing for credit and clashing agendas. When people would rather be heard than contribute, the output suffers. Members of a healthy leadership team are unafraid to let others have the limelight, because they trust the mission and the culture they’ve built together.
An honest self-assessment is necessary and this is something that only exceptional and selfless founders are capable of.
We are all imperfect human beings, founders included. There are always going to be moments that leaders can’t predict, and mistakes come with the territory. The right leadership team should be able to mitigate the unexpected, and sometimes make the future easier to predict. Putting the right people in the right roles early on can be the difference between success and failure — and that starts at the top.
Start by determining who will lead as CEO
Investors love founder-CEOs, and founders are often fantastic candidates for this role. But not everyone can do it well, and more importantly, not everyone wants to.
Startup founders should ask themselves a few questions before they lose sleep over the prospect of handing over the reigns:
- Do I even want to be CEO? If yes, for how long?
- Can I maximize the potential of the company if I’m not the CEO?
- Am I really the best person for this job at this stage?
An honest self-assessment is necessary and this is something that only exceptional and selfless founders are capable of. In many cases, founders decide they need outside help to fill the role. While a CEO may not be your first hire — or even one of the first five — the person you choose will ultimately occupy your organization’s most critical leadership role, so choose wisely.
What to look for: Ambitious vision grounded in execution reality. Your CEO should have hands-on experience that allows them to see around corners, predict pitfalls and identify opportunities.
What to watch out for: Leaders who lack respect for the founding vision or the ability to hire and balance an executive team quickly. A good CEO should be able to manage short-term cash flow and go-to-market needs without compromising the true north, while building a foundation and culture for the long term.
Then, hire a leader for your engineering team
On the engineering side, flexibility is the single most important quality a startup leader can have. That’s important for any leader, but exponentially more so for engineers. Big egos have no place in startup engineering, because they get in the way of the market’s feedback.
Every company gets punched in the face. What’s important is the reaction. Maybe your idea just isn’t right, maybe it’s the way it’s being positioned, or the features you’re prioritizing in pitch meetings. Engineering leaders who can’t accept feedback will fail at startups 100% of the time and can easily take the company down with them.
What to look for: People who are comfortable with unexpected changes in direction will always be more successful.
What to watch out for: Individual heroes. Many startups struggle to scale because their code is essentially kept locked away by a single person and nobody else on the team understands how to help. This model is not sustainable through growth.
Next, hire a product head
For most organizations, the most critical early hire is a capable product leader. Even if you as the founder are the most tech-savvy individual in the organization, there’s a big difference between ideation and execution. In an ideal world, the person ideating shouldn’t be taken away from that task to execute. Being a good early-stage product leader is more about knowing what not to do than what to do and having the conviction to hold the reins in place.
What to look for: Discipline, vision and the ability to learn continuously by speaking with customers are all important qualities.
What to watch out for: Wildcards and squeaky wheels. This person’s vision for the product must align with the founder’s for a startup to succeed.
Now, hire a sales leader
Strong sales leaders at startups can find customers who see value in being part of the company-building process. They represent the conduit between market feedback and leadership, and should be able to comfortably and clearly communicate that feedback to those responsible for building the product. Some of these sales leaders will understand inherently how to grow into a big picture role as the organization expands, while others won’t — and that’s okay.
Often, the kind of people who want to join a company at its ideation phase are different from those who thrive during the execution phase. Early on, you want someone highly collaborative who doesn’t just hit quotas, but provides valuable input on the direction of your business.
What to look for: Customer acquisition all-stars who can turn your first 10-20 customers into active champions, share credit for customer victories with other parts of the business, and take ownership for the team’s overall sales number.
What to watch out for: Someone intent on leading a hypothetical worldwide sales team years down the road is not the right fit for a scrappy startup environment.
Finally, hire operational leaders
Good operational leaders allow a startup to grow, expand and evolve over time. These are the people who have an eye on the future, paving the way for what comes next. Imagine if you owned a car that needed the tires sized up every time you wanted to go a little faster — it would take forever to get anywhere.
For startups, finance is the most important early-stage function here. At this stage, CFOs need to be enablers. They need to be willing to spend. Their priority cannot be cost cutting, but rather, how to creatively balance the resources that allow your business to grow and succeed — people, product and profit.
What to look for: Big-picture thinkers who can maintain a healthy balance between budget, people and product.
What to watch out for: Constant pushback and naysayers. While a sound fiscal process is important, speed and agility are the greatest advantages any startup has.
Leading a startup is not for the faint of heart. The moment leaders accept their roles, they’ve essentially agreed to be measured against the output of the company. They’re not just along for the ride; they’re riding the bull while it tries to throw them off.