How to Be Startup CEO

http://startupguide.com/entrepreneurship/startup-ceo/

by bsims • 13 years ago

148 21 13 years ago

startupguide.com

serginho2• 13 years ago

In the past I thought about CEO like about a big boss of some plant etc. Lee Iacocca, Akio Morita.

Good old days...

I only can keep in mind movie "Other People's Money".

> The entrepreneur of post-industrial America, playing God with other people's money. The robber barons of old at least left something tangible in their wake- a coal mine, a railroad, banks. This man leaves nothing. He creates nothing. He builds nothing. He runs nothing. And in his wake lies nothing but a blizzard of paper to cover the pain. Oh, if he said, "I know how to run your business better than you," that would be something worth talking about. But he's not saying that.

watershawl• 13 years ago

According to the chart they'd have you make your first sale in Q3. Why would you wait that long to validate your business model? Incorporating and setting up a location should be one farther down the list.

jasallen• 13 years ago

He's does say that you should build your Initial Product or Service Offering right at the beginning. I think 'start selling' is more like a 1.0, out-of-beta, ready for the pragmatists in the adoption-curve mindset.

ryanallis• 13 years ago

Hey Watershawl... the thinking is that it may take 6 months to build a product that customers are willing to pay for. Definitely try to validate faster if you can!

serginho2• 13 years ago

In the normal economy the first year You take care about the business, the second year You and Your business take care about each other and the third year the business takes care about you.

So stay tuned.

rdl• 13 years ago

There's some bad advice in here, IMO, although overall it's decent.

Fundamentally I think there isn't much value in laying out every detail of running a company from zero to scale, since initially all that matters is doing as few things as possible and not even thinking about what kind of org chart or employee handbook you'll need later. A huge document like this kind of deters people at best, or at worst convinces them to worry about the wrong things at the wrong time.

I don't really feel like going through every single point, but e.g. the advice to do non-standard vesting is bad (4/1 is standard, and even if you think 6/3mo is better, it is worse by virtue of being non-standard), and the "advisory thing" is really not something you need at all. There's a lot of focus in the early part on stuff which is non-productive. (I stopped reading before the later stage).

A lot of advice needs to be highly specific to time and place. Someone starting a business in a place where most potential hires are familiar with startups is entirely different from doing so elsewhere.

bsims• 13 years ago

One of the things I appreciate about Ryan and the information he shares is that he provides very detailed information and a lot of it. He leaves it to the reader to determine what parts are helpful, which varies by what stage each company is at to your point.

However, I'd rather have too much information and be able to determine what is helpful myself at that point in time than to have someone choose to provide less information.

radiusq• 13 years ago

That's great for you. But what about the new CEO with no experience? Lots in here to lead them down the wrong path.

mindcrime3• 13 years ago

I think very highly of Ryan, and I think this is a great article full of good advice. On a related note, his book Zero To One Million[1] is also excellent.

That said, Ryan presents one possible model in this post, for how to structure and sequence things. I'm believe there are very probably other equally acceptable models, and maybe even some that are better (depending on the circumstances).

In our own case at Fogbeam, we are much further along on the "build your product" dimension, but haven't assembled an advisory board (although we do have advisors and people that we'll probably invite to join our advisory board eventually. So I guess what I really mean is that we don't have a formal advisory board) nor have we done anything about "find a place to work" unless you count "work from our respective homes and the occasional visit to Starbucks, Barnes & Noble, or Panera Bread". Certainly we don't feel the need to rent office space or anything yet.

OTOH, I can't endorse the bit about "keeping expenses to a minimum" enough. I know I keep quoting this, but I am heavily inspired by pg's "How Not To Die" essay[2] and believe in the idea of keeping expenses down to where you have a runway that is - essentially - infinite. Of course, the runway may be infinite but the "window of opportunity" may not be, and you have to be making forward progress somehow. But if you can find a way to move forward without spending much money, I say go that route.

FWIW, to illustrate with an example, here's how much we spend at Fogbeam:

salary: $0 - both co-founders are working for equity only (we both work day jobs to pay the bills)

development costs: $0 - both co-founders are developers, so we write code ourselves

rent: $0 - see above. We work from our homes and/or public locations, or the local hackerspace, etc.

Github: ~$50.00 / month, IIRC. We have a low-end paid Github account for our few private repos (most of our repos are public though, since we're an Open Source company!)

Hosting: ~120.00 / month. We maintain a couple of VPS's at Rackspace for miscellaneous services. We host our website, a SugarCRM instance, Bugzilla, a Mediawiki instance, FUCIT - our "competitive intelligence" tool - and one or two other things.

Hoovers: $89.00 / month - We had been using Hoovers for free through NCLive, but I just signed us up for a paid account so we can use some features we couldn't get from the free version.

LinkedIn: ?? I don't remember, but I maintain the low-end paid LI account. Let's call it $50.00 / month, I don't think it's much more than that, if any.

So basically, it costs us $300 / month right now, plus infrequent expenses like copying and printing, domain name renewal, and renewing our company registration with the Secretary of State. And I can keep paying $300.00 / month out of pocket essentially indefinitely, as long as I have a dayjob.

Now starting this summer, as we get more aggressive about trying to land our first few paying customers, costs will go up some. I just paid about $150.00 for a list of contacts from Hoovers (above and beyond the monthly subscription) and on-site meetings with customers will entail some travel expenses. But that's exactly why we're focusing on customers in North Carolina to start, so that we don't incur large travel costs jet-setting around the world. Realistically, we aren't trying to do business with companies in Abu Dhabi, or South Africa, or England, or probably anywhere outside the continental USA. And we're really more interested in sticking to NC, and maybe VA, SC, TN, GA, etc. for the short-term future. Again, keep costs and overhead low, until we can demonstrate some traction, then we can start looking at what happens next (do we try to raise venture money, etc.)

[1] http://www.amazon.com/Zero-One-Million-Built-Company/dp/0071...

[2] http://www.paulgraham.com/die.html

ericb• 13 years ago

The pricing for small teams with many repos is free at bitbucket...

EternalFury• 13 years ago

7% for the first hire was too much? It's a nice post, but if the first hire is as key as the text says, I don't think 5% is too much.

capkutay2• 13 years ago

This might be a good guideline for someone who has never had CEO experience (and one day aspires to be a CEO), but I think it's almost offensive for one person to try to write the definitive guide to be a CEO from 0-x employees unless you're the CEO of some Fortune 500 company.

mindcrime3• 13 years ago

I don't know if you know this or not, and I didn't notice if TFA made this point explicit or not, iContact was successful enough to be acquired for $169MM, and he remained CEO right up to the acquisition. And they grew to > 300 employees at their peak, so it's not like this guy is talking out of his arse here.

capkutay2• 13 years ago

I never said iContact was a small company by any means. However, there are a many factors that can lead to a company growing >300 and getting acquired for that price. It might sound condescending so I understand the downvotes...but some of the things laid out in the post just sounded wrong to me.

tfb• 13 years ago

Growing up, I didn’t really know much about entrepreneurship and business, but as I began working in companies around the age of 16 and 17, and started my company, iContact, at 18, I discovered that there’s an entirely different world out there. In fact, there’s a world of prosperity and unlimited wealth out there for you to reach for. You can enter this world. But first, you have to be aware that it exists and you have to work hard to create value for others.

This kind of struck a chord with me. I've grown up in a relatively "unprivileged" (lower-middle class) family, and I think one of the main ideas I'm struggling to grasp as I build my business is that if I work hard to provide something people want, then I'm entitled to wealth in return.

Having lived a life where all I know is that everyone in my family has nearly always had financial difficulties, almost as if we're all undeserving of wealth for some unknown reason, it's hard for me to get into a mindset where I'm able to ask clients/customers for large amounts of money, amounts that might not even put a dent in most people's wallets.

I'm actually just realizing now that if I want to succeed, I'm going to have to break through this mental barrier.

eddyparkinson• 13 years ago

while I like the idea, my quick scan suggests there are two small holes. the quote ""examples are not another way to teach, they are the only way to teach" sums up the first. the second is learn by doing. practical excercses, learn by doing. the practical is a corner stone of good teaching. just my thoughts, hope you find them useful.

tempi35• 13 years ago

The one thing I've learned from top entrepreneur is that there is no blueprint for success. What worked for Ryan in one company between 2003-2008 doesn't have to work in different time place. The only thing is to run it and improve it all along.

r0s• 13 years ago

> Figure out how to convince people to work for you for next to nothing (in exchange for equity and deferred salary).

This is listed under how to avoid funding, but it's really just borrowing from other founders, without the promise to repay.

Assuming I make $80/year as a developer, a few co-founders like me are covering the $250k mentioned.

How to Be Startup CEO

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