You Want to Start a Business, but do You Really Want to be a CEO?
I went to MicroConf for the first time a couple of weeks ago. While I had a great time there, I noticed that a lot of the founders there were struggling to build a team. Many were running financially successful businesses of one, but they had flatlined because they eventually became the bottleneck.
A lot of the content I see online about starting a business focuses on the getting started part. I guess that’s because most people get stuck deciding on an idea or making their first sale, but running a business doesn’t really get much easier after that.
In fact, I think a lot of would-be entrepreneurs should think more about what they’re committing to before getting started. Many of the MicroConf founders I spoke with didn’t really like the idea of hiring, firing, and coaching other people, so they set a very low cap on their business’ potential.
Founder vs. CEO
This experience led me to think about the difference between being a founder and being a “real” CEO. Rand Fishkin points this out in his book, Lost and Founder:
“Unless what you love is managing people, handling crises, delegating, holding people responsible, recruiting, setting, then constantly amplifying and repeating the company’s mission, vision, strategy, and values, being a startup CEO may not provide you with the work you love to do.“ - Rand Fishkin
I’ve struggled with this adjustment too.
I spent 10 years as an early employee at startups before starting my own business, and now I have 20 employees (and 200 contractors) to help manage.
With rapid growth like this, I’ve had to constantly re-evaluate my role. Every 3-4 months, I find myself in an identity crisis where I have to sit back and reflect on what I actually do now.
So, I figured I would record some of my observations about being the CEO of a small business. Some of these challenges are common to all small business founders and others only crop up once you get a few employees on staff.
Every experience is different, but I think it’s helpful to think about the reality of being a CEO before you commit to the path of growing a team. Knowing these realities in advance will help you better prepare for them and adopt the right mindsets and processes.
1. No one will give you the answers
For me, the hardest part about moving from employee to entrepreneur was having to come up with all the answers myself.
In the first year, I was basically a leadership team of one, so I had to make every hiring decision, sales call, legal question, and process on my own. It was exhausting.
“Should we charge this client extra for that request?”
“What’s the best way to let an employee know they’re not performing to expectations?”
“How do I get reimbursed for travel expenses?”
“When will we be able to offer health insurance?”
“Are we doing well?”
“When will we be able to hire a new X?”
The questions and decisions are endless and there are no “right” answers. You might think this gets easier the bigger your company gets, but I’ve found it to be the opposite. There are even more impossible questions and options now that we’re a 7-figure business than we had when it was just me and a couple contractors.
My solution has been to offload as many decisions as possible to my team. So, when someone comes to me with a question, instead of answering, I ask them, “What do you need to know in order to make this decision for yourself?”
Then I try to give them any data or insight they’ll need to come to a conclusion. They might make a different decision from me, but they learn a lot either way and it frees my mental capacity for more of the big-picture work that a CEO has to do.
2. You’re on an island most of the time
Making all the decisions is tough, but it’s especially tough when you have nobody to talk about them with.
I had very few people from my personal network who knew what it was like running a business, so I ended up feeling isolated and a little depressed during my first year. Unlike the experience of having a job, you don’t automatically get a peer group when you’re an entrepreneur. You have to find and build your own.
In the past few months, it’s started to improve. I’ve joined professional groups with other entrepreneurs (masterminds, peer groups, etc.), and I’ve been working with an executive coach. While they can’t solve my problems for me, it’s helpful to know that others nearby are struggling with the same issues.
Having a team has also helped a bit. While I don’t share every self-doubt and fear I have with them, I am vulnerable and open about the company’s situation and my own uncertainty at times.
3. You will need to go from “maker” to “manager”
I’m living completely in a manager’s schedule now.
Image Credit: Tyler DeVries
When I was a software engineer, I’d rarely have more than two meetings per day, but now I have to be very intentional if I want a meeting-free day. Most days, I get booked back-to-back for 3-4 hours straight.
I also need to be more responsive now. I want to keep my team unblocked, so while we’re pretty good about creating documentation and having reporting structures to minimize this, I’m still a ways away from being completely out of the loop.
When we had 5-10 employees, I could still be a player-coach, occasionally hopping in to help sort out a sticky situation, but as we close in on 20, I’m primarily managing managers.
As a CEO, you can’t be a critical piece of the production or client onboarding process. Your role becomes prioritizing, hiring, setting up processes, answering questions, and looking at numbers every week to help the rest of the team stay on track.
You’ll also need to act as a company cheerleader. A lot of my meetings are public relations, partnerships, and building high-value relationships. I also run all-hands meetings where I try to get everyone excited about what we’re doing and the road ahead.
5. Treat your business like an investment, not a lifestyle
If you want to grow a real business, you have to let it go. It’s not “your baby,” it’s more like a teenager.
You might have helped form the thing, but it’s an independent entity with a driver’s license now. You can only exert so much control over the decisions it makes, but if it really starts to go sideways, you’re the one who gets blamed.
It’s kind of sad to let it go, but it also has its perks.
Because I am not as close to every employee, I can look at roles and performance more critically. Because I don’t know all our clients, it’s easier to say “no” to unprofitable requests. Because I have metrics in place, it’s easier to see the levers we can move to affect different end results.
It still stings a little to hear negative feedback, but I’ve gotten a lot better at not letting it keep me up at night.
6. Your business can’t move as fast as you can think
Finally, unlike when I did everything myself, my company can’t move as fast as I can alone.
I learned this the hard way earlier this year when I tried to introduce a new service offering. I thought I had cleared it with all the right team members, but after a sale went through (and it was not easy to deliver on), I realized that we needed more time on this. I should have communicated the new service better; looped in more people; planned a “launch” announcement; looked at the operational challenges.
In short, my company can do much more than it could when I was running it alone, but it’s also much slower to change.
If you are an ideas person, you’ll find being a CEO of a real company really tough. You need to develop focus and follow-through to make sure ideas are carried out and have a high chance of success.
One thing that’s helped me is moving towards more structured initiatives in the form of OKRs (Objectives and Key Results). This forces the whole team (myself included) to focus on 1-2 key objectives every quarter and doesn’t give us wiggle room to drop everything for a random idea. Having some sort of system like this is essential once your business has more than 5 or 10 people.
If you’re thinking of starting a business, I’d encourage you to think about what you’ll actually do when you succeed.
Personally, I find a lot of satisfaction in helping others reach their potential, so being the CEO of a small company is very rewarding. But, this comes at a cost as I no longer get to move the business forward quickly on my own. Instead, I’m a catalyst or enabler for others to get things done.
I’m also starting to enjoy my role as the company cheerleader. I’ve always been a very optimistic person, so I enjoy being able to share big wins and positive signs on the road ahead. I also enjoy public relations work like being on podcasts, writing guest posts, and going to events.
Are you the CEO of a growing company? Now sure if you like the role or not? What has your experience been like? Find me on Twitter to continue the conversation.