Today is an exciting day. Return Path Founder and CEO Matt Blumberg is launching his book, Startup CEO: A Field Guide to Scaling Your Business. Matt has run the gauntlet in his journey with Return Path and I’ve been fortunate to be a part of it from the very early days. The company started with a single product that turned into a small feature, and today Return Path is a leader in Email Intelligence. During that time, Matt has grown and developed himself as he led the company through its various stages. His dedication to knowing and understanding his own skills (and limitations), building a culture of constant learning and his willingness to take risks and run organizational experiments are among the traits I’d encourage Startup CEOs everywhere to embrace.
Matt got an amazing group of entrepreneurs and venture capitalists (including my co-investors in Return Path, Brad Feld and Fred Wilson) to contribute to the book. Below is an excerpt from my contribution. Let us know what you think (and buy the book now!).
How the Role of the CEO in Execution Changes Over Time
The role of CEO in a start up changes radically as the company grows and as the focal point of the company changes. These phases overlap so this framework is admittedly a stylized view. Running a company from start up to growth phase through these phases requires completely different skill sets, so in some ways resembles my favorite sport, the triathlon, where you swim, then bike, then run. It requires a variety of skills exercised in different proportions at different times – and a lot of learning along the way.
CEO as Product Manager: Achieving Product Market Fit
In a newly minted Startup, the CEO is typically one of the founders. In this case, she is often the person who invented the product or at least the one who first spotted the problem and brought resources together to create a solution. The first job is all about product, starting with finding Product-to-Market Fit by clearly identifying a problem and finding prospects or customers who will work with you to solve it.
CEO as Lead Sales Representative: The Sales Learning Curve
A start up CEO needs to be able to sell effectively, but the key success factor during this phase is to help the company learn how to sell in a scalable way. A common misperception is, “We’ve built the product and have a few beta customers, now all we need to do is hire a sales guy.” It’s much harder and more complicated than that.
The CEO as sales leader has some unusual characteristics that other sales people won’t have. She knows the market exceedingly well, may have created the product, and often has a founder’s natural charisma and leadership. She can adapt on the fly in a face to face meeting and make up new features based on customer feedback. Carrying the CEO title adds stature and she can commit company resources on the spot. A sales rep, or even a new VP of Sales, is never going to be able to sell the way the CEO does. Hence, understanding and mastering the Sales Learning Curve is a critical next step.
I describe the Sales Learning Curve in more detail in a sidebar Start Up CEO, but the essential steps are:
- CEO as Craftsman: just you, your product, and a whiteboard.
- CEO as Master Craftsman: facilitating an apprentice’s journey to develop a more replicable selling approach.
- CEO as Plant Manager: Building the initial sales factory, automating your approach.
- CEO as VP of Operations: Scaling up the factory by finding the metrics that matter and optimizing for them.
CEO as Leader and Manager: Building a Learning Organization
After core product market fit has been demonstrated and the sales approach is repeatable, the CEO role shifts into another gear. Where previously she had to be focused on product and sales – because the company’s survival depended on it – the company has evolved to where she can raise her head a bit and focus on some other areas, such as strategy, culture, and hiring. Of course, any good CEO has been doing these things all along the way, but as she gets into Scaling, they are more important than ever.
This only scratches the surface of all the elements of being a great CEO from Startup through the Scaling phase of the business. But if you master Product Market Fit, the Sales Learning Curve and Build a Learning Organization you will be ready for more challenges and open for more growth ahead.