For a long while, you probably aren't a great CEO
But you know the customers
The feature gaps
How to sell it
How to market it
How to build it
So maybe as flawed as you are
You are still the best CEO
— Jason ✨BeKind✨ Lemkin ⚫️ (@jasonlk) October 22, 2020
So it’s Q4. And the run up to the holidays and the end of the year is sometimes a time we quietly ask ourselves, after a few (or more) years in … Could Someone Do a Better Job as CEO? I did. I still do sometimes.
It may seem as the years go by that the answer must be Yes, especially for first-time CEOs. After all, you haven’t done it before. And the bigger the team, the higher the ARR, the bigger the customer base, the more painful the feature gaps … the less experience you most likely have around the next stage of it all.
But usually I think you can do a better job:
- Would an outside CEO really understand how all the pieces of your product really work together? Probably not. Not once it gets complex.
- Would a new, outside CEO really understand the needs of your Top 100 customers? You do.
- Yes, maybe you are behind on hiring. But would an outside CEO really know better than you which VPs can really do the job — and which can’t? Often, not for a long time. Often not until well after $20m ARR or so.
- Can an outside CEO grow the company magically faster than you? Maybe. But not if it takes magic. If you are looking for an outside CEO to magically improve an OK but not great growth rate, that’s rarely the answer. There are no shortcuts.
- Could an outside CEO really understand all the critical competitive feature gaps? And which ones to fill when? Unlikely.
- Can an outside CEO solve your fundraising challenges? Sometimes, if she has an amazing track record — then yes. She can cash in a check with VCs that backer her before and raised more. But if he/she doesn’t have an incredible record delivering to VCs before, then an outside CEO may do no better than you here, and possibly worse.
- How long would it take an outside CEO to really understand the market the way you do? 6 months? A year? Forever? They really never do. Not like you.
If it’s truly time to move on, then do so as gracefully as you can. Recruit your successor, and offer to help her in any way possible. If you help your replacement ease into the role, things will go better. If you act as her right-hand for an extended transition, that can often be magical. Sometimes, 1+1=2.X or even 3 when you bring in a new, fresh, outside CEO.
But maybe instead of bringing in that great new CEO, take a few quiet weeks off as best you can. Give yourself a little relief from hitting the plan for the year. Come back January 1 and hire a great VP in Q1. Then, after that, see how it goes.
When you are at $50m, $100m+ ARR maybe it’s all Knobs and Dials. Maybe any experienced CEO can do a great job. But today. I doubt it.
You know what it took to get to 100 customers. It’s the same playbook to get to 1000. You know it cold. But it’s not easy to transfer that knowledge. In the early days, it can be close to impossible.
Founder-led Stocks > Non Founder-led
Source: Bain & Company pic.twitter.com/iMyvN7BI4f
— 🔲Q-Cap🔲 (@qcapital2020) July 13, 2021
And once you get to $10m, $20m or so ARR, you can hire people under you who know all about the next stage. It’s 2020+. There are plenty of SaaS veterans out there today. Go find them and hire them. You may not be ready for them on your team at $1m or $5m ARR. But once you are ready for these proven VPs, they know the playbook to help you go from $10m-$50m to $50m-$150m. And beyond. So if you wonder if you are the right CEO, maybe just hold out until you are bigger enough to hire those experienced VPs under you. And see if you can convince them to join you. If you can, you may find you can scale infinitely.
And for another perspective, here’s a great video with the founder of WP Engine, talking about when he brought in an outside CEO to get them to the first $100m in ARR:
(note: an updated classic SaaStr post)