@habits

For this 101, I focused on what it takes to be a good startup CEO. Topics touched upon, but not covered in-depth, include cofounder relationships and day-to-day operations. Both will be addressed in future 101s.

“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.” – A VC

Here’s the previous 101 on seed fundraising (updated with new resources courtesy of you guys!!). Here are all of them.

I don't do this for the money, but donations certainly help. Use Venmo or Paypal. Thanks and enjoy!

PS. Please send me links. Please make them free and educational.

PPS. If you want a daily email recommending, and summarizing, a great startup article, subscribe to 1-Read-A-Day.

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Startup CEOs 101: Common questions

Total links: 46

Question 1: What are the qualities of a good startup CEO?
Question 2: What are common startup CEO mistakes?
Question 3: How does a startup CEO manage his team?
Question 4: What should a startup CEO know about operations and day-to-day responsibilities?
Question 5: How does a startup CEO create and maintain the right strategy, vision, and mission?
Question 6: How does a startup CEO build the right culture and minimize politics?
Question 7: Stories and advice from the front lines

Question 1: What are the qualities of a good startup CEO?

12 Things Good Bosses Believe by Robert Sutton (HBS)

My job is to serve as a human shield, to protect my people from external intrusions, distractions, and idiocy of every stripe — and to avoid imposing my own idiocy on them as well.

14 Ways To Be A Great CEO by Jason Baptiste (Onswipe founder)

You will be inundated with a list of requests from potential partners, investors, employees, and more. They will all sound absolutely wonderful. As you grow, you will also have the resources to execute more of them. Don’t. It’s easy to say yes, but so very hard to say no. By having an uncanny ability to say no, you can keep your company on track with the large vision you maintain.

Everything is my fault by Derek Sivers (CD Baby Founder)

But to decide it’s your fault feels amazing! Now you weren’t wronged. They were just playing their part in the situation you created. They’re just delivering the punch-line to the joke you set up.

Founder as victim, Founder as God by Peter Thiel (Paypal CEO) and Blake Masters (Judicata cofounder)

Sean Parker might be the paradigmatic example of the extreme founder figure. There was a rise, fall, rise, fall, and then a rise again. His experience in founding multiple things has been a pastiche of extremes. He didn’t go to college. Maybe he didn’t even finish high school. He was involved in various underground hacking circles in ‘90s. He did Napster as teenager. That had a crazy up-down arc to it.

How Andreessen Horowitz Evaluates CEOs by Ben Horowitz (a16z)

The CEO doesn’t have to be the creator of the vision. Nor does she have to be the creator of the story. But she must be the keeper of the vision and the story. As such, the CEO ensures that the company story is clear and compelling.

How to Convince Investors by Paul Graham (YC)

So here’s the recipe for impressing investors when you’re not already good at seeming formidable:
1. Make something worth investing in.
2. Understand why it’s worth investing in.
3. Explain that clearly to investors.

What A CEO Does (continued) by Matt Blumberg (Return Path founder)

Run great meetings. Meetings are a company’s most expensive endeavors. 10 people around a table for an hour is a lot of salary expense! Make sure your meetings are as short as possible, as actionable as possible, and as interesting as possible.

Here’s a meaty review of Matt’s Startup CEO book.

What separates the top 10% of startup CEOs from the rest? by Robert Scoble and others on Quora

Listens and acts. Many CEOs want to tell you what they are doing, but the best ones listen to feedback, and, even, do something with that feedback. My favorites even give credit back. Mike McCue, CEO of Flipboard, tells audiences that I was responsible for a couple of key features.

What We Look for in Founders by Paul Graham (YC)

Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They’re not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That’s why I’d use the word naughty rather than evil. They delight in breaking rules, but not rules that matter.

Why We Prefer Founding CEOs by Ben Horowitz (a16z)

Professional CEOs are effective at maximizing, but not finding, product cycles. Conversely, founding CEOs are excellent at finding, but not maximizing, product cycles. Our experience shows—and the data supports—that teaching a founding CEO how to maximize the product cycle is easier than teaching the professional CEO how to find the new product cycle.

Jump back to the ToC

Question 2: What are common startup CEO mistakes?

The 18 Mistakes That Kill Startups by Paul Graham (YC)

Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

I wrote a brief summary of these 18 mistakes.

Avoid Decision by Indecision by Mark Suster (Upfront Ventures)

To me the sin is having the decision implicitly made for you. The weakness is not having conviction. And as I stated previously in this post, decisiveness is one of the most important characteristics of an entrepreneur. You won’t always be right. But if you’re right 70% of the time and correct when you make mistakes you’ll always be better off making the early calls.

Shared Command by Ben Horowitz (a16z)

Shared command always seems really attractive to the people at the top of the organization like the CEO and the board: “we have two world-class people, this gives us the best of both worlds! We shouldn’t get caught up in the conventions of years past. We’re all adults. We can get along.” It looks much less attractive to those who do all the work in the organization. To them it looks more like frustration, chaos, and delay.

Treating the Dysfunctional CEO by Scott Weiss (a16z)

Some of the most dysfunctional organizations I’ve observed have evolved from dealing with a leader’s idiosyncrasies: He’s stereotypically passive aggressive, erratic, a bully, or plays favorites. Whatever the weird behavior, it drives massive turmoil as the company adapts a workaround to the “Emperor’s New Clothes” syndrome.

Why Founders Fail: The Product CEO Paradox by Ben Horowitz (a16z)

And then he ran smack into the Product CEO Paradox: The only thing that will wreck a company faster than the product CEO being highly engaged in the product is the product CEO disengaging from the product.

Jump back to the ToC

Question 3: How should a startup CEO manage his team?

Delegating or micromanaging, threading the needle by Steven Sinofsky (a16z)

Share experiences, don’t instruct. As the work progresses there’s a chance that the manager will see a pattern or similar situation arise. There’s a good chance the way that experience is communicated can come across as either “sage sharing of experiences” or “more micromanaging”. If there are experiences to share then share the story and allow the learning to take place by allegory and not turn the learning into “just do these steps”.

Enforcing Your Top Priorities by Ian Small (Tokbox CEO)

To develop the list I think about the company’s calendar, milestones and key activities over the next three to four months, and send a draft list of the top seven priorities to the management team. If they agree with the list and order, we just drop the bottom two items. If they don’t, we hash it through until we agree.

Fight Like You’re Right, Listen Like You’re Wrong and Other Keys to Great Management by Robert Sutton (Stanford Engineering Professor)

He points to IDEO founder David Kelley as a prime example of a light-touch manager. “David is a master of what I call ‘management by walking out of the room.’” He might convene a meeting, but if things are going well and the conversation is productive, he’ll eventually walk out. “He knows the fact that he is an authority figure can mess things up. The discussion can be more creative without him there.”

Here’s the email summary from 1-Read-A-Day.

Part 9: How to hire a professional CEO by Marc Andreessen (a16z)

Don’t.

If you don’t have anyone on your founding team who is capable of being CEO, then sell your company — now.

If, Why, and How Founders Should Hire a “Professional” CEO by Reid Hoffman (Greylock)

Many of the greatest success stories of the internet era involve founder/professional CEO partnerships. During the dot com era, Yahoo!’s Tim Koogle helped build Jerry Yang and Dave Filo’s startup into the world’s most valuable internet company. Meanwhile, Meg Whitman helped Pierre Omidyar’s eBay become the second most powerful ecommerce company in the world (trailing only Amazon). The Web 2.0 era provides successful examples like Joe Kennedy and Tim Westergren at Pandora, and the current social era provides even more, including Dick Costolo at Twitter and Tony Zingale and Dave Hersh at Jive.

Here’s the email summary from 1-Read-A-Day!

Line management by numbers by Cennydd Bowles (Twitter design lead)

Score your employee out of ten for:
-Current motivation
-Experience in the role
-Skills

Then look at the lowest number of the three.
0-3: adopt a tight, management-heavy approach until performance picks up.
4-7: take a supervisory, mentoring approach.
8-10: occasional coaching is all you’ll need. These are the good times.

Losing The Team by Fred Wilson (Union Square Ventures)

If I think about the times I have had to remove a CEO, by far the most common reason was the loss of confidence of the team in the CEO. You get the call from one of the senior team members. They tell you that they are going to leave and so is everyone else on the senior team unless you do something about the leader.

Making Yourself a CEO by Ben Horowitz (a16z)

A popular and sometimes effective technique for feedback beginners is something that experienced managers call The Shit Sandwich. The technique is marvelously described in the classic management text, The One Minute Manager. The basic idea is that people open up to feedback far more if you start by complimenting them (slice of bread #1), then you give them the difficult message (the shit), then wrap up by reminding them how much you value their strengths (slice of bread #2).

Here’s the email summary from 1-Read-A-Day.

Jump back to the ToC

Question 4: What should a startup CEO know about operations and day-to-day responsibilities?

13 Things You Must Do Every Week As A Startup CEO by Jason Goldberg (Fab founder)

Exercise. I can’t stress enough the importance of this. Make yourself go to the gym at least 4 days per week, preferably 5 or 6. Working out gives you the energy and stamina to solve complex problems. Being CEO is incredibly mentally challenging. Use the gym as a way to stay fresh and to clear your head.

As a startup CEO, what is your favorite productivity hack? by Dustin Moskovitz (Facebook, Asana) and others on Quora

One of my favorite hacks is No Meeting Wednesdays, which we borrowed from Facebook. With very few exceptions, everyone’s calendar is completely clear at least one day out of the week. Whether you are Maker or a Manager (http://www.paulgraham.com/makers…), this is an invaluable tool for ensuring you have some contiguous space to do project work.

How much should a start-up CEO make? by Seth Levine (Foundry Group)

I think market (and this seems to be true whether you’re in San Francisco, New York, Boulder or somewhere else) is that companies that have raised $1M or less tend to pay their CEO between $75k and $125k (skewed very much to the low end of that scale – companies that have raised less than $500k tend to top out at $75k for CEO comp). Companies that have raised between $1M and about $2.5M tend to pay their CEOs around $125k.

How to Be Startup CEO by Ryan Allis (entrepreneur)

Be as creative as you can, offering ownership in your company in exchange for early employees’ work or for critical services like legal and accounting, or requesting deferred payment so that you can pay when you are able to. Keep your costs down, as low as possible, until your monthly revenues grow and enable you to increase your expenses. And do contract consulting work on the side if needed to have money to live on.

The CEO’s Weekly Checklist by Scott Weiss (a16z)

Shortly after our first round of funding, my co-founder, Scott Banister, turned to me and said, “I’ve heard you tell 100 different people a slightly different version of the same story. I had no idea you spend so much time selling!” He was right, I was constantly selling: soliciting investors and advisors, signing recruiters and PR firms, hiring employees, securing first customers, conducting company meetings, convincing reporters and sparring with industry analysts.

Here’s my email summary from 1-Read-A-Day.

The Entrepreneur’s Guide to Conflicting Advice by Joe Heitzeberg (entrepreneur)

This blog post isn’t about how advice is useless, or that you should go it alone. Au contraire – surround yourself with SuperMentors, advisors and investors who are aligned with your goals and who believe in you and can bring out the best in you — by applying relevant experience to your particular challenges — now and in the future.

Here’s the email summary from 1-Read-A-Day.

What Harvard Business School is Teaching This Tech Entrepreneur by Ryan Allis (entrepreneur)

One of the key “HBS takeaways” from the last few weeks for me has been that to continue to grow beyond initial success, an entrepreneurial founder CEO must change their very nature and slow down to:
1. Create effective processes for disciplined information sharing.
2. Give up as many operational roles in the company as possible.
3. Bring the senior team in early on during strategy formation.

Jump back to the ToC

Question 5: How does a startup CEO create and maintain the right strategy?

2004 Founders’ IPO Letter by Larry Page and Sergey Brin (Google founders)

Our employees, who have named themselves Googlers, are everything. Google is organized around the ability to attract and leverage the talent of exceptional technologists and business people. We have been lucky to recruit many creative, principled and hard working stars. We hope to recruit many more in the future. We will reward and treat them well.

Here’s the email summary from 1-Read-A-Day.

From Vision to Values: The Importance of Defining Your Core by Jeff Weiner (LinkedIn CEO)

Mission – Overarching objective of the organization; should be measurable, achievable, and ideally inspirational. Should not be used synonymously with a vision statement. A great mission statement is brief, easy to remember, minimizes the use of the word “and” (to prevent a laundry list), shouldn’t require follow-up clarifying questions when first presented, and ideally proves to be uniquely identifiable to the company

Here’s the email summary from 1-Read-A-Day.

How to Analyze Your Startup Like A VC in 15 Minutes Or Less by Tom Tunguz (Redpoint)

The BMC describes the key operations of a business: the Value Proposition, the Key (Operating) Activities, Partners, Assets/Resources, Customer Relationships, Go-To-Market Channels, Customer Segments, Cost Structure and Revenue Streams.

How to build companies that matter by Eric Ries (Lean Startup author)

The Lean Startup takes agile practices and evolves them for use in a startup. The net result is a focus on experimentation and extremely rapid deployment. At IMVU, my most recent startup, we built the systems that allowed us to deploy code to customers fifty times every day. When releases are measured in minutes, not months, you can build a company culture designed to avoid the biggest waste of all: building product nobody wants.

How to Make Wealth by Paul Graham (YC)

There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars’ worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years.

Startup = Growth by Paul Graham (YC)

A good growth rate during YC is 5-7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing.

Here’s my email summary from 1-Read-A-Day.

Jump back to the ToC

Question 6: How does a startup CEO build the right culture and minimize politics?

Cult Creation by Steve Newcomb (Powerset founder)

The best way to prove to yourself, potential investors and to any potential future employees that you have a killer idea, is to get a number of A-level engineers to join full-time with equity-only deals.

Here’s the email summary from 1-Read-A-Day.

How to Minimize Politics in Your Company by Ben Horowitz (a16z)

The difference between managing executives and managing more junior employees can be thought of as the difference between being in a fight with someone with no training and being in a ring with a professional boxer. If you are in a fight with a regular person, then you can do natural things and they won’t get you into much trouble. For example, if you want to take a step backwards, you can pick your front foot up first. If you do this against a professional boxer, you will get your block knocked off. Professional boxers train for years to take advantage of small errors in technique. Lifting your front foot first to take a step backwards will take you slightly off balance for a split second and that’s all your opponent will need.

Here’s the email summary from 1-Read-A-Day.

What strong beliefs on culture for entrepreneurialism did Peter / Max / David have at PayPal? by Keith Rabois (Paypal, Square) and others via Quora

Extreme Focus (driven by Peter): Peter required that everyone be tasked with exactly one priority. He would refuse to discuss virtually anything else with you except what was currently assigned as your #1 initiative. Even our annual review forms in 2001 required each employee to identify their single most valuable contribution to the company.

Jump back to the ToC

Question 7: Stories and advice from the front lines

90 Things I’ve Learned From Founding 4 Technology Companies by Jason Goldberg (Fab founder)

It’s all about the product. Always has been. Always will be. The only thing that matters is how good your product is. All the rest is noise. At Fab, our virtual product is our website & apps, our physical products are the merchandise we sell, and our experience product is our operations and service. Getting all 3 parts of our product right is everything.

Here’s the short summary from 1-Read-A-Day.

All CEOs Should Be An Outside Director For One Company by Brad Feld (Foundry Capital)

Now, imagine you are a CEO of a fast growing startup. Wouldn’t it be awesome to be able to spend a small amount of your time in that same emotional and functional detachment for someone else’s company? Not only would it stretch some new muscles for you, it’d give you a much broader perspective on how “the job of a CEO” works. You might have new empathy for a CEO, which could include self-empathy (since you are also a CEO)

Among Max Levchin’s lessons learned as a young entrepreneur, which are the greatest? by Max Levchin (Paypal, Slide) on Quora

If there is any doubt about hiring a candidate for your first 5-6 positions, there is no doubt — do not.

Here’s the email summary from 1-Read-A-Day.

Entrepreneurs Who Create Value vs. Entrepreneurs Who Lock Up Value by Andy Kessler (entrepreneurship author)

Carlos Slim Helu comes to mind who briefly passed Bill Gates in 2007 and 2010 to become the richest man in the word. He controls 90% of the phone lines in Mexico and 80% of cellular customers. He didn’t invent anything. He doesn’t drive down prices. There is little innovation. And why should there be? He is milking this franchise for all it’s worth.

Entrepreneurshit. The Blog Post on What It’s Really Like. by Mark Suster (Upfront Ventures)

You have secret doubts about your co-founder. She seems depressed. And she isn’t pulling weekends anymore like you are. I know, right? Total bullshit. She’s just not as committed as she once was. I don’t think she really believes any more. If I told my VCs would they then lose interest in our next round? Would they blame me? Would they back me or think I had gone off the rails?

Here’s a related Suster post on CEO health and fitness.

Startup Advice by Sam Altman (Loopt, YC)

Hire friends and friends of friends. Go after these people like crazy to get them to join. Some other candidate sources are ok, but I always got bad results from technical recruiters.

Here’s the short summary from 1-Read-A-Day.

Swapping Drivers on this Long Road Trip Together by Rand Fishkin (Moz founder)

Sarah likes to describe the last 6 years at Moz as a road trip. I’ve been driving and she’s been in the passenger seat, navigating. But while I really loved having the wheel for most of the journey, we’re getting into terrain I don’tlove as much, and it might be time for Sarah and I to switch positions. She’ll be a different kind of driver and I’ll be a different kind of navigator, but we, the vehicle, and the passengers, will all be fine.

The Hardest Lessons for Startups to Learn by Paul Graham (YC)

Startup founders are naturally optimistic. They wouldn’t do it otherwise. But you should treat your optimism the way you’d treat the core of a nuclear reactor: as a source of power that’s also very dangerous. You have to build a shield around it, or it will fry you.

The Struggle by Ben Horowitz (a16z)

This is not checkers; this is mutherfuckin’ chess – Technology businesses tend to be extremely complex. The underlying technology moves, the competition moves, the market moves, the people move. As a result, like playing three-dimensional chess on Star Trek, there is always a move. You think you have no moves? How about taking your company public with $2M in trailing revenue and 340 employees, with a plan to do $75M in revenue the next year? I made that move. I made it in 2001, widely regarded as the worst time ever for a technology company to go public. I made it with six weeks of cash left. There is always a move.

What does it feel like to be the CEO of a start-up? by Paul DeJoe (Ecquire founder) and others on Quora

You feel guilty when you’re doing something you like doing outside of the company. Only through years of wrestling with this internal fight do you recognize how the word “balance” is an art that is just as important as any other skill set you could ever hope to have. You begin to see how valuable creativity is and that you must think differently not only to win, but to see the biggest opportunity. You recognize you get your best ideas when you’re not staring at a screen. You see immediate returns on healthy distractions.

You’re not the CEO – you’re the Fucking Janitor by Zach Bruhnke (entrepreneur)

My employees never looked at me as a boss but always as a colleague. They knew that if they didn’t pick up that broom to sweep the floor then I certainly would and that led to a much more productive work environment.

Jump back to the ToC