Being a CEO of a startup is the most exhilarating yet challenging of roles and everyday brings new learning. The role of CEO / founder in a startup is probably one of the most diverse jobs it is possible to have. There are many hats you’ll have to wear when you are in that chair to make sure things keep moving in the right direction. You do everything from buying the printer paper, to paying the bills, to developing the strategy. But the diversity is also the reward as you see your whole business grow and appreciate what went into that success. In this series I will consider some of the things I have learned over 35 years in and around startups and share some advice for new CEOs.
This month, we look at the importance of continuously looking at your market, talking to customers, and innovating to stay ahead of the competition.
Stand back and evaluate what you are doing from time to time. As CEO you must focus on the immediate term of what you are trying to achieve. But, every so often, it’s important to ‘back up’, look at the environment, the market, the technology, and make sure you are still on the right path. I worked for a Silicon Valley consultancy that had a futurist called Watts Wacker (yes, really!). He co-authored a very interesting book called The 500 Year Delta. One of the theses was that companies should have a 500-year strategic plan but a 5-year tactical plan. Aim for the long-term endgame but tweak the ‘here and now’ to deliver short-term results. If you run through a Business Model Canvas exercise for your company, it will help you confirm that your value propositions are still valid today for your key customer segments. Or it may highlight new customer segments or subcategories that could be addressed with new offerings. Fine tune the direction if necessary. Pivot into a wholly new direction if absolutely necessary
Getting a heads-up on what’s happening in your market can differentiate between success and failure. Always be talking to customers, to suppliers, and even to competitors. Find out as much as you can about where your market is heading and keep your business nimble so you can follow the trends. At one (very established) organization I worked at, a colleague and I were always coming up with ideas for new services. Unfortunately, we were generally told, “We tried that before and it didn’t work”, or “We’ve always done it this way and we don’t want to change”. So in the end, we left to work for a more innovative business. Make sure your team doesn’t do the same.
New CEOs never know everything. Be continuously looking up new information about your market, technology, and competitors. Look up to your mentor and use them. If you have the resources, have an assistant do a lot of the research while you do the analysis.
Every so often, you’ll need to shake the business up. If you are constantly monitoring your market, you will know when things need changing. Maybe a new competitor enters. Perhaps a new technology disrupts your main product. Maybe regulations change what you can or cannot do. Or maybe you instigate the change yourself to keep ahead, to keep innovating.
A shake-up could be a simple reorganization of the product team. Or it could be a pivot into a brand-new market. One of my startups was established towards the end of the dot-com boom (1999). We had a service that was beginning to gain traction, but then the dot-com bust happened and we were left with some technology but no market. We could have closed shop and disappointed our investors, but instead, we pivoted into the corporate banking market (as our team had experience here), adapted the technology and continued the business for another 20 years.
“No Business Plan Survives First Contact With A Customer,” Steve Blank famously said. You need to wake up and keep this in mind. Always involve your potential customers in product or service development. Always keep asking, are we solving a real problem, addressing a real need? Just because there is a gap in the market, doesn’t mean there’s a market in the gap!
Sometimes events can disrupt your plans and as CEO, you, and only you, know the real situation across the whole business. It is your role to keep your chin up even when things look dire. Keeping the team enthused and the investors off your back is vital if the business is to move forward. Signs of trouble will get employees looking around for alternative jobs, and the rumor mill can quickly destabilize a small business. Stay positive. Get stuck into the work with the team, if necessary, to show solidarity. Roll up your sleeves and show them that you are ready to work as hard as they are to get the job done.
David Tee has over 35 years experience in technology development, entrepreneurship and international consulting. He has founded and worked in Cambridge IT startups, consulted for a Silicon Valley-based advisory firm, and supported the development of innovation-focused incubation services across the world. He is currently on assignment in Turkey, and lives between Europe and India.