“The CEO just does everything nobody else wants to do” — Founder & CEO of a Series A startup, and a dear friend
tl;dr
In a pre-PMF startup, the CEO role should be kept lean and agile. The bare minimum duties include:
- Fundraising
- Decision-making of last resort
Sales often falls to the CEO, especially in technical founding teams.
Many traditional CEO responsibilities (vision-setting, recruiting, culture-building, etc.) could be shared among all founders.
This minimal approach keeps the startup agile, and lets the CEO focus on the most pressing priorities.
Intro
If you ask 10 founders what a CEO is supposed to do in a pre-PMF startup, you’ll get 15 different answers. There’s no clear explanation because it depends on the makeup of the founding team and other factors. If you consult the internet, you’ll see responsibilities like hire and manage the team, set the vision and strategy, evangelize the company, and preserve the culture. But these are the well-defined duties of a CEO at a mature company / startup. When you’re early-stage, you’re not executing in the same way most businesses do. You’re searching. You’re searching for a customer problem, a product, and business model. That’s a very different enviroment, that demands a different orientation where agility is paramount.
The way I see it, the role needs to be designed flexibly, with the minimal viable allocation of core responsibilities, to keep the company agile. I’ll share my views on that minimum set at a pre-idea startup, but its going to be bias towards technical founding teams with a roughly equal partnership. So the CEO is also technical and the differences in seniority, background, and experience across the founders are not acute.
Minimum Viable Duties
The role of an early-stage CEO should be kept small, and consist of only two essential duties:
- Fundraising: Investors want to negotiate deals directly with the CEO. It’s an unwritten rule. The CEO not only has the decision-making authority but also does most of the work when raising funds. But honestly, I’ve seen some companies run afoul of this convention, folding others into the fundraising process so long as it’s in the best interests of the company.
- Decision-maker of last resort: There will be times where the team is stuck on a decision. This is inevitably going to happen. And anytime a startup is at a standstill, the cost is longer time-to-PMF. Indecision can kill a startup so the CEO must make a decision to preserve momentum. Most of these situations fall into one of these two buckets:
- Stalemate: Despite deliberating all viewpoints, the co-founders dig their heels into conflicting positions that causes gridlock. The CEO breaks the deadlock by casting an additional tie-breaking vote.
- Now if the CEO plays this card too frequently (eg. once a week), it’s probably a sign of more fundamental dysfunction. Some intervention should be sought to re-align the team.
- In many other matters, eg. engineering, the CEO shouldn’t have the authority to override decisions made by owners. However, in rare cases, the CEO may have to step on toes, e.g. if the decision results in a dramatic deviation from strategy.
- Uncertainty: Relatedly, if the team throws their hands up in the air and can’t make a decision under radically ambiguous circumstances, the CEO needs to step up and make a decision–even if its a random guess–to keep the company moving. You can load the CEO role with more responsibilities (you will definitely assign the CEO other work), but you want to be cautious not to introduce organizational bottlenecks to progress. For instance, you can agree to give the CEO oversight over all aspects of sales, but if the CEO is later bogged down by, for example, operational tasks, it could slow the company down when the company’s progress is sales-bound. Many of these inefficiencies can be avoided with good prioritization but I’ve found that by keeping the CEO position lightweight, that person can easily float to the highest priorities for the company at any given moment.
- Stalemate: Despite deliberating all viewpoints, the co-founders dig their heels into conflicting positions that causes gridlock. The CEO breaks the deadlock by casting an additional tie-breaking vote.
Sales
I’m carving out sales because even though this function doesn’t have to fall on the shoulders of the CEO (eg. some startups I know have a CRO as part of the original team), it traditionally does. And when you have a team of technical founders, you can expect the CEO to do most of the heavy lifting when it comes to sales. This is a natural area for the CEO to take the lead. First, customers, especially in a B2B setting, prefer to deal directly with the highest-level decision-maker. Second, the role of CEO evolves with the growth of the company to own stakeholder management, which includes customers in addition to investors, etc.
Out-of-Scope
Some of the things I believe are decisively outside the purview of the CEO:
- Being the “manager”: At an early-stage startup, the CEO shouldn’t be the “manager” in the classical sense. Having one person steer the ship is actually not the best arrangement. The founding team should be highly collaborative and inside all decision-making. And each person is in charge of their own areas and self-development.
- Taking the credit: Young startups won’t have to worry about a lot of press, for a very long time. If everyone on the founding team is an A player, success will be a function of each member’s contributions and so credit attribution should be equal. Even though the CEO will be asked to do cover shoots, and present at conferences, etc., all co-founders should get a chance to bask in the glory.
Shared Responsibilities
These are some responsibilities that are typically associated with the CEO that I feel can be comfortably spread across the whole founding team:
- Vision-setting: When the company is searching for its identity, the CEO doesn’t choose the final destination. The mission of the company is something to be jointly decided. That mission is going to dominate so much of the founders’ lives so it can’t be dictated by one person. It has to be a unanimous decision, one that hopefully emerges from shared enthusiasm and ownership.
- Chief optimist: For each team member, the belief in the company’s potential waxes and wanes. The CEO is not immune. At different points in the life of the company, different team members will need to step up to boost morale. That’s a mark of a healthy team.
- Recruiting: Hiring the first employees is critical and doesn’t have to fall solely on the CEO. Involving all founders in the hiring process ensures cultural fit.
- Culture-building: Company culture should be a reflection of all founders’ values and working styles. Each founder should contribute to defining and exemplifying the desired company culture.
Conclusion
This arrangement works well with founding teams with no hierarchy. By reducing the CEO to only the bare minimum, startups can stay lightfooted during the search phase. Key functions can be distrubted across members based on talent and interest, but leaving a good amount of slack in the definition of the CEO, and frankly other co-founders, the shit work involved early on can be effectively prioritized and addressed.
However, every startup is unique. The specific responsibilities of a CEO may vary based on the founding team’s composition and the nature of the business. The key is to make sure the company moves at a fast pace. After the startup reaches PMF, the CEO’s role will naturally expand and become more established.
This lean philosophy encourages a more collaborative environment where all founders work in a concerted fashion. By embracing this more fluid approach, early-stage startups can move swiftly and shorten to the distance to PMF.