Founding and growing an industry-transforming company is probably one of the hardest things anyone could ever do, and the hardest part about it is that nobody has done your job ever before!
There are no fixed rules in startups. Your mentors always seem to give you conflicting advice, and the books and blogs are so full of useful tidbits that it’s hard to know which things to prioritize. Sometimes you just find yourself staring into space wondering if you are working on the right things.
I’ve certainly felt this at times myself. To help me stay centered, I’ve condensed my main responsibilities into six bullet points that remind me of my principle obligations at Brainscape. I keep these six points on a post-it note in my office, so whenever I question whether I am neglecting any key responsibility, I just look at my list and make sure I feel that everything is in balance.
1. Cash flow
This one is a no-brainer. If you run out of money, then you have no business to operate. It is the CEO’s job to manage revenue, expenses and external financing to maintain the consistent growth of the business. Even a strong CFO (if you have one) still needs to answer to the CEO’s ultimate guidance on cash flow-related matters.
It should also be noted that a prerequisite for effective cash flow management is a solid metrics-driven corporate culture to start with. Without a reliable and comprehensive picture of the company’s metrics, a CEO won’t know how to pull the right levers to affect revenue and expenses, and he or she won’t be able to successfully communicate growth opportunities to potential new investors.
2. Product vision
Your team needs to continually feel clear and excited about where the company is headed. It is your responsibility to regularly refine your company’s product vision as a result of frequent interactions with your customers. A monthly all-hands meeting is a great setting to remind your team that you know what you’re doing.
Employees tend to need at least a few months of clarity — and at least a year or two of general “direction” — to remain psyched about their job. Remember that a huge amount of people’s job satisfaction is derived from the perception that their work will provide a strong contribution to the team’s objectives.
3. Team building
A mentor of mine once told me that venture capitalists are looking for five things in a startup: People, product, people, market and people. Without the right captains leading the ships, there’s little chance they’ll continue traveling in the right direction.
A good CEO is constantly questioning whether the right people are in the right places. Do any roles need to be re-organized? Are any bad apples affecting the performance of the rest of the team? Do people like their jobs? Do we need to have a corporate team-building retreat at a ropes course? Do we need to create any new vacancies for unmet leadership needs?
Continually optimizing for team fit is a difficult activity, but it pays off exponentially as you put the right people in the right places.
4. Investor management
The moment your startup first takes outside capital, you suddenly have a new boss: your shareholders. This only becomes more poignant as you continue to capitalize your business. Keeping your investors informed, helpful and happy is one of the most underrated things that CEOs can do to improve their chances of success.
A good CEO knows the right frequency and nature of updates to send to each tier of investor. He or she maintains a list of all her existing investors’ skill sets, so he or she can remember to ask people for favors at the right times. And he or she never lets months go by without at least a phone call (how many months depends on the type of relationship and number of investors).
Gaining the respect and enthusiasm of your investors increases the amount that these advocates will evangelize your company in their respective circles of influence. Your investors can be your greatest salespeople if you leverage them correctly.
5. Brand management
Building and maintaining a strong brand (both personally and for your company) is a product of thought leadership and relationship management activities. These activities are easy to neglect but can dramatically increase your credibility in the eyes of your market.
To build a strong brand, you must be proactive and generous with your time. You may need to speak at industry events, do favors for colleagues, write blog posts, become active on Twitter or send handwritten notes to your top customers, partners or co-workers. Only you can decide what brand you want to project and how confidently you want to project it.
Over time, time spent expanding your profile and fostering personal investments will be well worth the investment.
6. Corporate development
When you are heads-down working on your product and team, it is easy to forget about managing your company’s place in your overall industry. There could be big opportunities available if you were only having the right conversations. For example, should you be partnering with other firms in your space? Preparing for a future acquisition? Looking for small acquisition opportunities of your own?
Continually researching and connecting with the key players in your market will help you pave the way for a successful exit. Justin Kan reminds us, in his awesome guide to selling a company, that most successful acquisitions are the result of ongoing conversations between the startup and the acquirer. The more relationships you have with the key players in your industry — including big companies, law firms, and VCs — the more successfully you’ll be able to navigate an eventual exit.
Naturally, there are many more random activities that a CEO must undertake on a daily basis. But if you aren’t tackling the above six areas of responsibility, then your company will have a hard time succeeding.