In a company’s early days, the difference between C-level executives and the rest of the organization is simple — employees can walk away from a failure, leaders cannot. Under those conditions, certain types of people thrive in leadership positions and get a company from ideation to production. While there may not be a magic formula for what works and what doesn’t, there are common traits successful startups share in terms of the way their foundational leadership teams are constructed.
We’ve all experienced what it looks like on the negative end of the spectrum — people making points simply to hear their own voice, leaders competing for credit, and dueling personal agendas. When people want to be heard as opposed to help, the output suffers. A healthy leadership team is unafraid to let others have the limelight, because they trust the system and culture they’ve built together.
We are all imperfect human beings, including founders. There are always going to be moments they can’t predict, and mistakes come with the territory. The right leadership team should be able to help mitigate the unexpected, sometimes even make the future easier to predict. Putting the right people into the right early roles can be the difference between success and failure — and that starts at the top.
Start by determining who will lead your startup as CEO
Investors love founder-CEOs, and oftentimes founders make fantastic candidates for this role. But not everyone can do it well and more importantly, not everyone wants to! Startup founders should ask themselves a few questions before they lose any sleep over the prospect of handing over the reigns.
Do I even want to be CEO? If yes, for how long?
Can I maximize the potential of the company if I’m not the CEO?
Am I really the best person for this job at this stage?
An honest self-assessment is required, something that only exceptional and selfless founders are capable of doing. And in plenty of cases founders feel they need outside help to fill the role. While a CEO may not be your first hire — or even one of your first five — the person you choose will ultimately occupy your organization’s most critical leadership role, so choose wisely.
What to look for: Ambitious vision grounded in execution reality. Your CEO should have hands-on experience that allows them to see around corners, predict pitfalls, and identify opportunities.
What to look out for: Look for leaders who have respect for the founding vision and an ability to hire and balance an executive team quickly. A good CEO should be able to manage short-term cash flow and go-to-market needs without compromising the true north, while laying a foundation and culture for the long-term.
Then, hire an adaptable leader for your engineering team
On the engineering side of the house, the single most important quality a startup leader can have is flexibility. That applies doubly to leadership and exponentially to engineers. Big egos have no place in startup engineering, because they get in the way of the market’s feedback. Every company gets punched in the face. What’s important is the reaction. Maybe your idea just isn’t right. Maybe it’s the way it’s being positioned, or the features you’re prioritizing in pitch meetings. Engineering leaders who can’t accept feedback will fail at startups 100 percent of the time, and can easily take the company down with them.
What to look for: People who are comfortable with unexpected changes in direction will always be more successful in a startup environment.
What to look out for: Individual heroes. Many startups struggle to scale because their code is essentially kept locked away by a single person and nobody else on the team understands how to help. This model is simply not sustainable through growth.
Next, hire a product leader to turn your vision into reality
For most organizations, the most critical early hire is a capable product leader. Even if you, as the founder, are the most tech-savvy individual in the organization, there’s a big difference between ideation and execution. In an ideal world, the person ideating shouldn’t be taken away from that task to execute. Being a good early-stage product leader is more about knowing what not to do than what to do, and about having the conviction to hold the reins in place.
What to look for: Discipline, vision and an ability to continuously learn by speaking with customers are all important qualities.
What to look out for: Wildcards and squeaky wheels. This person’s vision for the product has to be aligned with the founder’s for a startup to have success.
After your technical leaders are in place, hire a sales leader to bring your vision to market
Strong sales leaders in a startup can find customers who see value in being part of the company-building process. They represent the conduit between market feedback and leadership, and should be able to comfortably and clearly communicate that feedback to those responsible for building the product. Some of these people will understand inherently how to grow into a big picture role as the organization expands, while others won’t — and that’s okay. Oftentimes, the kind of people who want to join a company in its ideation phase are different from those who thrive during the execution phase. Early on, you’ll want someone highly collaborative, someone who doesn’t just hit quotas but provides valuable input on the direction of your business.
What to look for: Customer acquisition all-stars who can turn your first 10-20 customers into active champions, share credit for customer victories with other parts of the business, and take ownership for the team’s number.
What to look out for: Someone intent on leading a hypothetical worldwide sales team years down the road is probably not the right fit for a scrappy startup environment.
Finally, hire operational leaders to keep your business humming
Good operational leaders allow a startup to grow, expand, and evolve over time. These are the people you want with an eye toward the future, paving a clear way for what comes next. Imagine if you owned a car that needed the tires sized up every time you wanted to go a little faster — it would take forever to get anywhere. For startups, finance is the most important early stage function here. At this stage, CFOs need to be enablers. They should be willing to spend. Their priority cannot be cost cutting, but rather, how to creatively balance the resources that allow your business to grow and succeed -- people, product and profit.
What to look for: Big-picture thinkers who can maintain a healthy balance between budget, people and product.
What to look out for: Constant push-back and naysayers. While sound fiscal process is important, speed and agility are the greatest advantages any startup has.
Leading a startup is not for the faint of heart. The moment leaders accept their roles, they’ve essentially agreed to be measured against the output of the company. They’re not just along for the ride. They’re riding the bull while it bucks.
Originally published in TechCrunch