CEO in the startup world, how to lead the growth and not the other way around

Dear CEO or founder of a prospering startup, 

Ground zero

In the beginning, it is just you, all the spotlight is on you and this amazing idea that solves a problem the world thought was unsolvable. If you are lucky, maybe you got the idea together with a special someone and you are in this deep exciting ocean together. It is hard work for sure but it is also encouraging work. You are living your superhero fantasy, by day chasing new customers and clients and by night developing your product. Sure, the customers are demanding and are never happy with your product but they also give you tons of appraisals for your product idea and vision and repeatedly tell you how much your product has saved their business. Every new customer gives you an adrenaline rush no other drug can match. The dopamine levels in your brain go through the roof and you get your kind of Runner’s High. Everything’s coming up for you, and you are finally getting closer to reaching the point where you can take out a steady paycheck for yourself with the revenue from the go-to-market-ready product you have designed. 

Phase One – Time to Hire Some Subordinates

And then it happens sooner than you think: Suddenly there aren’t enough hours in the day and clients take up too much of your time, and you can bring yourself to neither attract new business nor develop a top-quality product. You can’t stretch yourself further and continue to grow your business. Your organization has reached its next level and needs to expand. You have to step out of the comfort zone that is The Newbie Area and move into the next zone or your dream of having a global service will be dead. 

Before you can take the leap you have to do your inventory; How much capital do you have for this next expansion? Usually, it is too little than you hoped for, which means you will not be able to hire top-quality talent since they tend to have high salary expectations (it sucks, good people, know their worth!). So what talent pool are you left with? Most likely your dearest and closest friends have the same crazy mindset as you and can be convinced to join this rocket-ship with you whether you either crash and burn or land in the stars. 

But the upside of this talent pool is that you know each other very well and trust each other by pure friendship and loyalty. These friends will show up and come to work even if a paycheck is a little late (or a lot late). The downside of this talent pool is that most likely none of your friends has done this type of growing-startup-building ride before, so they have no previous recipe to go to when things get hard. This means that you can never fully delegate the true accountability for either revenue or product development. What you are left with is a situation where you as the leader can delegate operational tasks, like “make sure we call this many new customers this week” or “I would like for us to implement this feature in the product within the next 3 days”. This is still great because this will free up your time to do more strategic things to secure the future of your journey which includes larger and harder things like fundraising, organization growth, recruitment, and go-to-market strategy while still keeping you in control and the loop of the day-to-day activities. 

Another downside is that you are no longer the solo superhero, you have now created your team of Avengers (Trademarked) who both meet customers’ needs by day and also develop the product by day. Most of the encouragement from customers doesn’t come to you, but instead to your hired friends. Sure it’s nice to have success-by-proxy, but you sometimes miss those days when it was only you, your phone, and your laptop. But at least your investors are still giving you the direct appraisals you need, and they love the fact that you can juggle both the longer perspective regarding growth and market strategy as well as you being able to answer why a recent feature was two days late or why this week’s new customers sign up has declined by 2%. You are still needed to answer questions daily from the team, and investors, and that still gives you the same rush as in the beginning times. You realized that celebrating with others is more fun than alone, and you still have the solo ego boost by being the sun in your team’s universe and all the important decisions must go through you. 

Things to Consider to Make This Phase More Profitable and Prosperous 

This way of expanding is quite normal but has its limitations. The upside is that you can hire a lot of junior generalists to hit your new customers’ target goals, product feature deadlines on time and make the early Angel Investors happy. It is important to realize that you need a junior generalist that can handle mundane repetitive tasks to grow your business. But to keep their engagement aligned with your growth plans is the key to a profitable and prosperous growth journey and making sure that their mini solo decisions are aligned with your plan. 

You need to frequently have development discussions with them so that they are always thinking about the next step in their career or can seek new opportunities internally. The sooner you get people into that mindset to understand the task and your vision then the easier it will be to develop your market and product. This requires frequent recurrent 1on1s. If you learn how to master this and also how to increment them as a natural meeting in the weekly repertoire of the sales meeting, investor relations, and mundane business admin (you didn’t realize admin was a need when starting a business), the sooner you can reap the benefits. With a more engaged and speed-footed sales team, and faster more accurate product ideas from your product and development team, your growth expands faster than any other company in your investor’s portfolio. 

But it comes a point when you realize that you can not give all these junior generalists the attention they deserve. You also realize that by not being able to fully delegate accountability and responsibility you become a bottleneck for tedious decisions that the team would have been able to decide for themselves if they had the information about the larger perspective that only exists in your head. 

This is when it becomes a good time to start thinking about team leaders and their backgrounds. This time usually corresponds to when your organization finished its first operation (a.k.a signed your first enterprise customer, or expanded outside of your first market segment). But to step into this new phase you need something that you didn’t have before: M O N E Y. Hopefully with your free time you managed to land your first A-round of investment and now you are stacked with all this new cash! Time to spend it wisely to get the most bang for the buck.

Phase 2 – Finding your Raid Leaders 

To be able to hire and find your new raid leaders (team leads, Head Ofs, Chief X Officers) you need two things: a promise that you do things differently compared to the big enterprise companies, and that you can truly commit to the benefits of delegating full accountability and responsibility to their specific business area. If you can promise that you will have it way easier to find your Leaders that can turn your startup into a unicorn rocket ship. To be able to take on this accountability and responsibility will require individuals with a lot more experience and armor and who have done a similar growth journey before, either at a different startup or within a larger enterprise. Why do you need this growth experience? Because they will bring more experience with issues and problems that will hit you during your growth journey and they will use that experience to improve your journey. And since you are probably in this for the first time you cannot possibly have risk mitigation plans for every single scenario. This is the first time you have to change your mindset that you need to be the sun and The Almighty and start to think in terms of “What things must I do” and “What things are better for someone else to do because they are smarter than me and they’ve done this before”. 

The only upside for this recruitment phase is that money is not the same issue as before. This time you will afford to look in a different and more expensive talent pool. But how do you make sure that you hire someone better than yourself in their area of expertise? 

Keys To Making Your Hunt for Raid Leader Tribe Successful

The key is to remember to identify what area/situations/problems that this leader must have a previous track record of before joining your party. For a Head of Sales, it might be a proof-of-concept they have built-in their playbook for a specific product and brought increased sales, or experience in developing the sales process for a new market that is unknown to you. For a Head of Product, it might be experienced in building a product for your demographic, or for a Head of Tech it might be experienced in developing tech processes for a scalable online platform. For a Head of Operations, it might perhaps be a person who has tons of positive references on their internal leadership, or a huge sales network. Once you start to think about what responsibilities and levels of accountability you want to delegate it will be easier to figure out the key previous experiences to be able to fill those shoes. You need to know this before you start interviewing candidates, otherwise, it will be very hard for you to decide who is the right fit for your mission.

Since no candidate is 100% perfect, it is good to have a list of must-haves and nice-to-haves, and previous experience based on what issues and problems need to be solved without you interfering. You need to be looking for a leader with a similar growth journey in their resume since you know by experience that learning on the job takes too long and your company moves too fast (otherwise you would have gotten where you wanted to go by now).

But to attract good raid leaders, you need to create an environment where these people will enjoy being. Now you might think; “what kind of environment is that?” Some prerequisites need to be in place, and the main thing is that you need to dare to delegate full accountability for each area to this person. The only way you will be able to do this is to prove that this person has done this before. It’s a “hen meets the egg” kind of situation.

You will know when you have found the right person when delegating accountability to that person becomes easy. Competent team leaders will tell you what they need to achieve the goals you set up for your organization. If they truly know the playing field will they describe what result they can bring to you and what resources they will need to deliver on your goals.

The scary part here is that when you start to recruit for these positions you won’t have full knowledge of the mandate, context, and demands for the position, only a vague image/vision of what the position involves. Then it is even more important to look for the person that can give you the clarity you seek for the position. But if you happen to hire someone that knows as little as you, it is a recipe for misunderstandings and conflicts. Here it will be helpful for you to speak with either CEOs’ at different startups, and ask them how they managed to find their raid leaders, or simply seek out leaders in different companies and ask them to describe their regular day to you so you build an understanding of what they do. This might sound time-consuming but it is worth your time since it will minimize the risk of you recruiting the wrong person. You can also invest in a good recruitment partner that has experience vetting these types of candidates before for other startups. 

The right candidate won’t tolerate not having full accountability and responsibility for their specific area of expertise. A great Head of Sales will ask you what revenue you need to hit, and at what date, and then calculate backward what resources will need to be in place at what time. A great Head of Tech will demand full accountability of your products’ uptime (and yes, that also means to decide when to have its downtime). A great Head of Product on their initiative will have a close relationship with the Sales and Customer Service Team to stay ahead of customers’ requests and understand why certain features need to be done before others because they will improve usability in ways the customers don’t know. 

Phase 3 – I Am Not Needed Anymore

When you find these raid leaders you will step into the next level, where you stop delegating tasks that you have full control and knowledge over and start to delegate full accountability and responsibility. From this point on you will never have full knowledge or insight into your company’s daily activities and this is a good thing (your investors might hate you at first but also thank you later on for daring to make this change). 

You will know that you have done this phase correctly when you come to work one Monday and suddenly your calendar is more empty than it was last week, and people don’t stop by your desk with questions anymore, only to do small talk. You suddenly don’t have a fully pumped workday, significantly fewer SLACK messages, and maybe feel kind of useless. That’s when you know that you managed to hire the right raid leaders and your rocketship will truly take off. You will also know that you have reached this phase when you have to ask your team and team leaders to get information on how things are going and developing. Enjoy this sudden pause because now is the time to saddle up and enter a new area of expertise! 

What is the phase after this one, and what to do with all this free time you suddenly have? Are you useless now? It might feel like that when you are not the go-to person anymore in terms of customers, tech, or product ideas. But now it’s the most important phase of all; It is the time for you to become the Organization Coach (Jürgen Klopp or Paladin to put the right image in your head). 

How to Embrace Your Inner Paladin or Jürgen Klopp?

Our definition of Coaching is the communication and learning about others’ problems and issues, and using this for leading change in behavior in individuals and organizations. The key to a successful coaching collaboration is to base it on a great interest for other people and their development. It is a powerful conversation methodology to help individuals and organizations to reach their goals in becoming more self-responsible and increase engagement. 

To simplify: a great way to structure your 1on1 is to set a starting point and discuss the current situation so both you and the receiver have the same image in your minds. Then you start to identify the aspired goal of behavior change together. Once you have agreed on that it will be easier to help the receiver strategically move forward towards the goal and leave the current situation. What differs coaching from a regular results-follow-up meeting is that it also involves that you focus on the individual’s will and choices on the path towards the goal. Together you reflect on what will happen if the client chooses to behave differently the next time it faces the same obstacle. This way your receiver will get more of a learning curve from your talks and a larger awareness about different perspectives and solutions towards different scenarios and interactions within your organization. It is up to the client to be responsible for their actions and choices. The coach is there as a guiding compass, never judging and always transparent. That is why it is such a powerful tool for behavioral change: The client gets sustainable and long-term learning about themselves and develops a deeper understanding of themselves and their goal orientation. 

If you want to be able to go through your growth journey with your health in place then you need to take regular time to analyze your organization and identify which phase each sub-team is currently at. Not all business areas will grow at the same time and be in the same phase at the same time. Once you figure this out is it easier to figure out the next steps and be a leader of your growth instead of the growth leading you. Perhaps this is something you will need your coach for helping you take the time to analyze your organization. 

Remember there are still a few things that you will never (regardless of phase) be able to fully delegate and that is:

  • Fundraising – you will never stop this because your team will have more ideas that will need more funds to implement
  • Organization development – you need to have a vision on how big you wish to become, and mix this with your raid leaders’ responsibility to hit the goals you have set up + what you can afford. 
  • Culture – You are the sole guardian of your work ethics and rules. Invest in a good culture coach early to improve your leadership skills
  • Leadership – you are your organization coach and leader always, 24/7 – Congratulations to your newfound parenthood.

If this article made you question yourself – if you are up for the task, perhaps you need someone to guide you through this, someone who has seen this before. I know a great team ^^

TLDR – Save the impact positions for people with a proven track record. Your rocket-ship flies too fast for anyone to learn on the job. Invest in a great recruitment partner early to minimize the risk of hiring the wrong person. Invest in a great leadership coach. It will make your employees stay longer. But what about attitude eats skillz for breakfast? Yes that works very well in a generalist position, but for your few key hires a proven track record is highly valued as stated above.