Day 1: Who Should Be CEO? A Checklist.
SaaStr has now passed 100+ posts, and we’ve somewhat gone on a journey from the early days of a SaaS company, through the growth phases, and as of our last post, up to the Unstoppable phase. We’re not quite done with that journey but if you’ll forgive me going back in time, I wanted to address an interesting question at Day 1: Who Should Be CEO?
I’ve been reminded of this question in several meetings lately where founders are doing pretty well, getting to and past Initial Traction, but with hindsight it’s interesting that the founder that took the CEO gig perhaps was better suited to a different role, say CTO or SVP of Sales or President or COO or SVP Product.
Sometimes when you start a company it’s 100% obvious who the CEO should be. But sometimes whether it’s egos, or a sense of who’s “done it before”, that drives a possibly erroneous decision here.
With that, let me throw out a checklist I originally worked out on Quora. If you aren’t 100% sure which founder should be CEO — then I’d strongly suggest the one that most fits the following criteria should be CEO:
- Has Raised Venture Capital Before (and Has A Positive Reputation in VC Community). A big part of a CEO’s job is to keep the company funded and not bankrupt. Investors interface with and focus mainly on the CEO, fair or not. Put the person who can get you the bucks in this role.
- Strong Evangelist, Good Hustler, and Enjoys Getting Up on Stage. The CEO should be the external face of the company. Most people don’t like getting up on stage, doing whatever it takes to get PR, trying to build the first customer and BD relationships. More on that here.
- Enjoys Interfacing With Customers. All customers, and especially early customers, want to meet with the CEO. Even if it’s just the CEO of a 4 person company. This is similar to the prior point. Wallflowers, do not apply. More on there here and here.
- Clear, No Questions Commitment to Running the Company for 7-10 Years. Some founders really aren’t 100% committed for 7-10 years or even 18 months. They like the idea but want to see if it takes off before committing mentally 100% (even if they’ve committed 100% of their current time). You can’t change that. But those people shouldn’t be CEO. Turning over the CEO in a start-up is bad.
- Best Cross-Functional Recruiter. I’m putting this last but in some ways it’s first. 20%+ of the CEO’s job is recruiting. General rockstars at first, and then management, etc. etc. If your best recruiter isn’t in this role, you will really suffer. More on that here.
Grade everyone that wants the job objectively on this matrix. Whoever comes out ahead — is CEO. Period. Do this, and you’ll collectively make the right decision.