So you want to be a CEO? Today's startup is a bootstrapped venture with a founding technical team stretched thin. The CEO is the natural leader with innate but not necessarily proven skills. Here's how to round out your skills to succeed as an entrepreneurial CEO.
Obviously, the job of chief executive officer (CEO) in an engineering-based business is unlike any other job within a company. The skillset is cross functional. Ideally, the individual should have some experience in the fields of engineering, marketing, sales, legal, human resources, and finance.
Of course, it is unrealistic to expect such a broad skillset unless the individual is an experienced CEO or senior executive. In the startup community, most up-and-coming CEOs have strong expertise in only one or two of these critical areas. The new CEO needs a bit of coaching to navigate the unknown areas. Here are a few thoughts on how a first-time CEO grows into the job and rounds out an incomplete skillset.
I knew early on that sitting alone in my cube working as an EDA programmer wasn't going to be satisfying for me in the long term, and I began plotting a career strategy. I petitioned to become an applications engineer and a trainer for the tools I developed. From there, I moved into marketing and then into sales for a short time. I moved into the mergers and acquisitions (M&A) group for a large company, where I learned a great deal about the legal and funding aspects of the business -- from the patent portfolio and partnership agreements to term sheets. This balance of experience helped me secure a CEO position. More importantly, it served me well as I navigated the CEO role for an international EDA software startup.
My career choices and trajectory are unusual in today's electronics industry, where the startup CEO is usually the technical founder with astute business acumen and little practical experience. That wasn't always the case. When the electronics industry and EDA was flush with venture capital (VC) investment, the VCs would require a more senior management structure, including an experienced, polished CEO.
How quaint. Today's startup is a bootstrapped venture with a founding technical team stretched into a variety of tasks -- a by-product of the lack of VC funding flowing into our industry. The CEO is the natural leader of the group with innate but not necessarily proven skills. As a result, it's hard to ensure that all parts of the business are working at full strength. Without the modicum of understanding of a particular corporate function, it's hard to make intelligent decisions.
The importance of building a skillset
Critical to a CEO's success is being surrounded by excellent people, be they the board of directors, employees, or mentors. For starters, I highly recommend that a first-time CEO partner with an experienced one. It could be a board member, a mentor, or any other suitable relationship. The CEO job can get lonely, and having a trusted partner is invaluable.
Additionally, a new CEO may hire a chief financial officer (CFO) to round out the senior management skillset and shore up a weakness. He or she then will turn to a trusted adviser or board member to validate the information from the CFO. "Trust but verify," as President Ronald Reagan so aptly stated.
A bootstrapped startup CEO may have few resources, but there's always the network. In the electronics industry, we have a healthy and active network of experienced entrepreneurs. They can provide a good substitute for expertise. Many senior executives will take calls from entrepreneurial CEOs and offer advice and contacts. LinkedIn has become a tool for all of us, as well. A CEO could scroll through his or her LinkedIn network and be amazed by the connections they already have -- many ready to assist.
I believe that nothing beats on-the-job training (OJT, as the experts call it), but you should not overlook the various business books designed to support executives of all stripes. Many entrepreneurs profess to reading and living by Crossing the Chasm by Geoffrey Moore. Others confess to devouring The Art of War by Sun Tzu. No matter. Each book offers a perspective on business excellence.
And, just as we often pitch our business value proposition on core competency, the same goes for a startup. Many business functions, but not all, can be and are outsourced. Human resources and public relations are the most common ones, but there are plenty of others. An outside firm can handle accounting.
All aspects of an entrepreneurial startup should be performing at the highest level, or the weakest link risks bringing down the whole company. Any aspects that aren't performing at this level need a thorough review. A technology CEO who has the confidence to start a company must have the confidence for this type of review. That same CEO needs a brain trust of individuals who balance his or her needs. After all, it takes a village.