Thursday, June 6, 2013

How to Lock and Load the Right CEO for Your Startup

cofounders-lab-foundersIf you are a young startup founder, how do you find that CEO or other executive for your “dream team” to close on funding or complement your skills to kick start your company? It makes logical sense to scour the job boards, engage an executive recruiter, or scan the networking sites like LinkedIn for a good array of candidates, and then interview the ones with the best resumes.

But in fact, that’s just the beginning. To complement local face-to-face networking, you can always use one of the many online matchmaking sites that have sprung up in the last few years, like CoFoundersLab and Founder2be (think eHarmony™ for entrepreneurs, or Match.com meets LinkedIn).

There you can connect with thousands of potential executives and partners, or find a planned meetup in a city near you. Also, trusted advisors and experienced investors should be polled for good candidates. Sure, some executives are found from resumes, and relationships can be built online, but trust and executive chemistry are hard to deduce from a resume or quick meeting.

From the candidate perspective, the ideal executive is much more likely to sign up for your job if he knows and trusts you, versus just meeting you online or through the interview process. In all cases, never lose focus on finding someone who can meet the following top objectives, adapted from some old advice by Jeff Richards to startup CEOs:

  • Build the team. The CEO must focus on key management team hires and assume a few mistakes which need to get fixed. A great hire can make a company, but a single bad one can break it. As one company Chairman says, "The common elements I see in first time CEO's: a) they don't hire fast enough, b) they don't fire fast enough, and c) they don't manage their board and investors well."
  • Provide effective leadership. Remember that leadership is both upward, as well as downward to direct reports and employees. A good CEO provides leadership to the Board of Directors, company investors, and stockholders. There are several books written on this subject. A good place to start is "The Effective Executive - The Definitive Guide to Getting the Right Things Done", by Peter Drucker. In it, he says "Management is doing things right; leadership is doing the right things."
  • Create and sell a financial model. Even with a good CFO, your CEO is the top fund raiser. It's important that the CEO define alternatives and have a very clear view on how he will use the proceeds, including the option of not raising any outside capital at all. The CEO is the check and balance on the constant parallel pushes for more development, more marketing, and more growth.
  • Craft an operational plan and make it work. Most founders are product guys. They need an operational CEO who knows the market and the marketing game. He must nail down a sales process that fits the domain and economy. This includes the tactical as well as the strategic. The CEO needs to know how to qualify and close deals, as well as who to sell to, why do they buy, pricing, and what your strengths are against the competition.
  • Communicate company values and culture. Make certain you as the founder and the CEO are on the same page on mission, company values, exit strategy, and workplace model. Disconnects on how employees are treated or decisions will be made can be disastrous, especially with family-owned or closely held ventures.

Executive recruiters are the old-fashioned fallback, if networking doesn’t work out, but find one who has long-term relationships with many experienced candidates and business executives. I have found that most startups and small businesses can’t really afford to go this route (the average fee for a CEO is in the $40,000 ballpark).

So get out there and network today, online and offline, so you can be one of the lucky ones who has been nurturing a relationship with some candidates and executive recruiters before the real need arises. Your investors will love you, your company will prosper, and the new executive will be a hero. Everybody wins.

Marty Zwilling

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2 comments:

  1. "Everybody wins" that's actually a very highly positive statement and I am sure if start-ups follow the above mentioned tips they can actually sail through well.

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  2. Mr. Zwilling - I'm older than a baby boomer and in the throes of a multiple product and service start up ($1.85 million sales in 24 months) where the youngest principal is in his middle 50's -- meaning that we 3 principals bring multiple and complementary skill sets, as well as personalities, experiences, and "sense of life" to the endeavor. From that frame of reference, our lead sentence is "If you are a startup founder [of any age] of a young company, how do you find that CEO or other executive for your “dream team” to close on funding or complement your skills to kick start your company?" And our answer is that we are a "virtual" company, any one of us could perform as CEO but one has the most experience and is the imputed CEO, and we have no payroll to meet and want to keep it that way. Therefore, everyone who would be an "executive" under a traditional model is the owner of his/her own business and s/he or his/her business performs a specific, specialized function in accordance with a contract for deliverables and services. Keeps the overhead low and the capital burn rate low. Of course, being older, our combined contact databases are rich with people who want to do business with/for us.

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