The 6 Key Skills for a Start-up CEO
Chief Executive Officer, Chief Salesman, Chief Visionary, Chief Communications Officer, and Chief Funding Officer are all titles can apply to the role of a start-up CEO. It’s undoubtedly one of the most difficult jobs in the world of business, particularly as it requires such a wide range of skills to excel. This is a big reason why only 10% of start-ups achieve success, as it takes someone very special, with the right mix of skills and start-up DNA. In many ways, the job of a start-up CEO is harder than a CEO of a Fortune 500 company.
A start-up CEO requires a number of core skills, including: (1) a strong and concise vision of where the venture is going; (2) industry knowledge and understanding of competitive trends; (3) excellent team management skills; (4) sales and motivational skills; (5) ability to keep the business on track in regard to plan and budget; and (6) keep the company liquid. I’ll address each of these points below.
- Set the vision.
The first two points are strongly linked, as to create a strong and concise business vision, you need to have a sense of what it is happening in the industry and with competition. That’s the initial important step to developing a successful business plan. Simply saying “we’re building a great travel website” isn’t good enough, as there are countless similar sites out there. You must shape the vision so that it’s unique and more competitive than current solutions available in the marketplace. For example, a travel agency could choose to position itself as a niche website for adventure travel, rather than a general online travel agency. And, within the adventure travel sector, it could then opt to specialise in “privately-guided, made to order” tours. This vision for the business could potentially then develop into a unique product in the marketplace.
- Monitor key trends and adapt accordingly.
The job of the CEO isn’t finished once the initial vision is set. He or she must remain knowledgeable about key industry trends, as well as competition activity, to navigate the ship over time. For example, in a difficult economic climate, a travel agency promoting other tour operators’ trips could develop into a branded tour operator of its own. This would get more margin to the bottom line. In addition, a whole new revenue stream from online advertising could be brought about, helping the company achieve increased profitability. It is part of the CEO’s job to continually monitor industry, economic or competitive movements, and to respond and react accordingly to keep the business moving forward.
- Keep the team focused on the same goal.
Another job of a start-up CEO is to ensure that all employees understand the vision for the business and that all employees are contributing to build that vision. Everyone needs to be on the same page. The CEO is the communicator of the vision, but he or she is also the consensus builder for the vision. A start-up will never achieve success if the team doesn’t buy into the vision, or if they feel their ideas for improvement of the vision aren’t being listened to. Once everyone is firmly on board, they must be kept focused on the goal.
- Evangelize and motivate.
Once the vision is set and maintained, it’s time for execution. For execution to be successful, the CEO must be the start-up’s Chief Evangelist. This includes cheerleading the staff at all levels of the business, and getting prospective investors and clients excited about becoming involved. As the CEO, you need to be that infectious personality that that stirs up a sense of enthusiasm. However, it is important that your sales and motivational skills are matched by intellect and excellent business judgment, as this will ensure that you present yourself as credible and backable to all parties.
- Manage to key targets and budgets.
Keeping the business on plan, on budget and liquid is essential for any CEO of start-up. The CEO must set achievable proof-of-concept points, whilst putting key managers in place for hitting those goals. This involves building a management dashboard of the key drivers that will determine its success or failure. Using the travel agency example, these might be: (i) driving traffic to the website; (ii) encouraging those visitors to make contact; and (iii) getting contacts to convert into sales. All energy needs to be put into driving these three data points, with one key manager in charge of each data point (i.e. head of marketing might be responsible for driving traffic, head of web design driving contacts, and head of call centre dealing with closed transactions). As a CEO, you need to determine your key drivers, and then get the right team members to manage them. More importantly, you must be able to quickly recognise when things aren’t going to plan, as this will allow you to put new initiatives in place to recover the shortfall. The longer cash-using problems continue, the more likely it is that you will run out of money and possibly even go out of business.
- Keep the company liquid
One of the worst things that can happen to a start-up business is running out of money mid-launch, or before full proof-of-concept that could attract additional investment. Therefore, the CEO must make sure that those proof-of-concept points are clear to all members of the team; that a realistic timeline has been formed to achieve those points; and the business has enough cash to hit those goals. The best people to give proof-of-concept input are your potential investors. Ask them what they’re looking for before they are willing to fund your business, and then focus firmly on reaching those targets. When it comes to raising money, always aim to raise more than you think you might need, as this will provide a cushion for when things go wrong, as they tend to with start-ups. Be prepared make the difficult decision to cut payroll or overheads if required.
The question “Who makes for the best start-up CEO?” can’t be easily answered with a single right answer. This is because everyone is different in terms of skills, leadership style and personality. Plus, every business is unique in regards to economic, industry and competitive dynamics. However, the above is an excellent summary of the types of people that are most likely to become a successful start-up CEO.
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