What is the primary role of a startup CEO?

February 2024

Matt Compton

What is the primary role of a startup CEO? Provide Clarity, Make Decisions, and Fuel Growth

A startup CEO is one of the hardest jobs there is and can be very difficult to define. Descriptions such as “lead the company”, “define vision and strategy”, or “find product market fit” while technically are a big part of the job, seem too vague and often do not help prioritize a CEO’s time.  We’ve found the best CEOs focus on three key areas: providing clarity amidst ambiguity, making decisions no one else can make, and ensuring sufficient fuel for the company's growth. Let's delve into these fundamental responsibilities that define the essence of a start-up CEO's role.

1. Providing Clarity Amidst Ambiguity

Start-up environments are often characterized by ambiguity and uncertainty. This can be paralyzing or, at a minimum, distracting for employees, investors, and potential customers. CEOs provide a beacon of clarity amidst the fog of uncertainty. They articulate a clear vision and mission for the company, outlining the strategy that defines what problem the company’s product solves for which customers and how it’s differentiated. They clarify what success looks like by setting ambitious yet achievable goals, define key performance indicators, and make clear what the company is NOT going to pursue. The very best CEOs also define a clear culture so team members know what kind of organization they are a part of, how they will be working together, and what they can expect from each other.

When a company’s purpose and direction are clear, employees can build and navigate challenges with confidence, customers know how to buy, and investors will believe.

2. Making Decisions No One Else Can Make

Lack of clarity around who makes a decision is another start-up killer. There are some decisions only the CEO can make, and they must make them efficiently and effectively. These are typically the one-way door decisions or critical choices around strategy, resource allocation, customer segment, product differentiation, or key hires. CEO level decisions typically must be made with missing information and require a blend of intuition, analysis, and calculated risk-taking. The CEO often must make the decisions that require the most courage, making the right but unpopular call.

Just as importantly, there are many decisions a CEO should not spend time on - such as two-way door decisions, choices with less critical stakes, or decisions that someone else in the organization is closer to or has better information.  

There is a large body of work out there around decision making approaches A CEO should pick one that best works for their company. The point here is rapid decision making should be a big part of a CEO’s time. They should focus on the high impact decision that only they can make and empower their team to take on the rest.

3. Ensuring Sufficient Fuel for Growth

Fuel for a start-up comes in two primary forms: talent and cash.  It is the CEO's responsibility to ensure that the company is equipped with the necessary fuel to differentiate, grow rapidly, and thrive in a competitive market.

The CEO must attract and retain top-tier talent who align with the company's culture and vision and have the appropriate skills sets for the next 24 months of growth. One of our favorite tactics for this is for the CEO to be continually meeting with top functional leaders from other companies which are a stage or two ahead. This helps the CEO benchmark their current leadership talent and build relationships with people who they may want to recruit down the road.

The CEO is also responsible for securing the financial resources needed to fuel the company's operations and expansion. This can come in two forms: revenue and financing. Start-up CEOs must have a strong connection to the company’s revenue generation and personally drive revenue growth in the early stages of going to market. A CEO must also build a strong network of downstream investors, keeping them appraised of the company’s progress towards milestones and understanding what potential investors are looking for in order to participate in future rounds.

We encourage our CEOs to focus on, and potentially even track, how they are allocating their time across these three important responsibilities: Clarity, Decisions, and Fuel.  

EXTRA STUFF

In conclusion, the job of a start-up CEO encompasses a myriad of responsibilities, with a focus on providing clarity in ambiguity, making decisive choices, and ensuring the company's growth through talent and financial resources. It is a role that demands resilience, vision, and strategic foresight, as CEOs navigate the complexities of the start-up landscape, driving their companies towards sustainable growth and success.