How to navigate the treacherous path from founder to CEO

Starting up and scaling up demand two different skill sets. Some founders are makers, some are managers. This division might suggest why so many brilliant innovators struggle when it comes to actually running the company they’ve built. It’s key to understand which archetype you are, and how to avoid becoming the wrong one.

Markus “Notch” Persson, co-founder of the games studio that created Minecraft, is possibly one of the world’s best founders and the world’s worst CEOs. 

In 2012, former Facebook president Sean Parker flew Notch and his team to London to woo him into selling studio Mojang. Notch resisted this (undisclosed) offer among several others from VCs and tech firms who had gotten wind of Mojang’s USD $128 million turnover. 

In Minecraft’s early days, Notch was absolutely intent on staying in control of the game, and of the passionate playerbase he had cultivated from scratch.

But after Mojang upset fans by barring them from reselling in-game perks, Notch decided he’d had enough of “getting hate for trying to do the right thing” and agreed a sale to Microsoft in 2014 for USD $2.5 billion.

The problem with Notch was that he was literally a programmer who loved working on tools, rather than working on the business. In his own words: “I’m not an entrepreneur. I’m not a CEO. I’m a nerdy computer programmer who likes to have opinions on Twitter.”

Those “opinions” were unfortunately so problematic (there are too many homophobic, anti-trans, pro-white tweets to link here) that Notch is now barred from all Minecraft related events.

His world-building ingenuity, not just in gaming terms but in fostering a unique and fiercely loyal company culture, led Notch to a multimillion dollar valuation and a devoted playerbase of 140 million. But his complete lack of filter on his controversial political views made him completely unfit to stay on as CEO.    

Why do so many founders fail as CEOs?

Humans are complicated organisms. Talented staff are hard to find. They each have different management needs, and they all need to be paid on time. On top of that, as your company grows, you will not only be accountable to your founding team and staff, but also your investors and shareholders.

As you move past the seed stage, you’ll start to notice rising tides of responsibility. Common hurdles for first-time founders like recruitment, scaling, people management, and finance management will herald a gigantic shift in your day-to-day duties. 

You’re no longer just someone who generates ideas, but a manager. The leap will be particularly sizable if you are academically, technically, or scientifically brilliant. Dedicating your life to your field then to the invention of your product will have left you little time to develop the soft skills demanded by the tasks above. 

There’s a reason very few successful founders are educated to doctorate level. Being a CEO demands many strands of awareness and ability. By default, the more of an expert you become in a discipline, the narrower and more singular your field of vision gets. 

The inevitable choice 

You might see yourself remaining for life at the helm of the company you’ve built. Or you might have planned to sell from the outset. This is the ‘rich vs royalty’ dilemma: are you after money, or are you building an empire? Notch is a classic king – he loved the phenomenon he built, and cares very little for the money it made him.

Whether you want green or glory, whether you plan to stay put or sell out, the choices might not be yours to make. 

By the time companies go public, most founders have stepped down as leaders. 75% in fact. Some go voluntarily. Some are forced. Once external capital is brought in, one- or two-person founding teams quickly find themselves outgunned and outmanned by their board of investors. 

As your success explodes, so does the scope of your role, and by proxy you become less qualified. And it’s not you but your board of investors who will make the call. It’s a horrible paradox, and it’s happened to countless cofounding teams throughout startup history. 

Making the transition 

In your early days, your first major shift is moving from inventing and innovating to planning, managing, scaling, recruiting, and all the boring administrative things that seem at odds with your original vision.  

Your second shift comes when you have to stop handling all of those things. To stop acting as CEO (Chief Everything Officer). 

It’s not easy to stop doing something you worked so hard to master, or to stay at the helm as the years start to pass. But it does happen. 

British Trunki founder Rob Law remains the company’s CEO after 11 years of trading, a disastrous Dragons’ Den pitch, and a high court case where he oversaw the successful suing of a copycat kids’ suitcase manufacturer. 

Law describes himself as “fundamentally a product person driven by innovation” who prioritises staying “close to the customer” and “keeping the culture” in his small Bristol-based team of 30. 

Quality, child safety, and durability (each suitcase comes with a 5 year guarantee), in his words, “underpin” the brand. Law’s approach to expansion and identifying new global markets has been trepidatious and contained. Rather than pursuing new pastures or diversifying the range, Trunki has stuck with low-risk routes like e-commerce, strategic partnerships, and the popular suitcase customisation service ‘Made For Me’ which accounts for a third of all online trade.  

Making huge sums of money is clearly not Law’s reason for being. This along with his slow, modest approach to growth and utter dedication to the brand’s core values have allowed him to function indefinitely as both founder and CEO.      

It’s important to consider what specific roles you will need in order to take the company to the next stage, and therefore what work you should be delegating internally, hiring for. Additionally, what systems/processes you will need to establish in order to grow.

Combating burnout 

Burnout can be physical, rung in by sleepless nights, staring at screens, and stumbling from meeting to meeting. It can also be mental, triggered by the overwhelming pressure as the ultimate decision maker to achieve and succeed. 

One of the most damning effects of burnout is that people will see it, and people will hide from it. The more harassed your demeanour and the more furrowed your brow, the less likely your staff will be to “bother” you with both urgent issues and petty concerns. This results in a common problem for CEOs: “last-to-know-ism”. It signals a lack of team trust, and can spell disaster if major decisions are made without your knowledge.

Decide what you can handle and want to handle. Lean on your team, allow them to make mistakes and trust them to correct them, and keep recruiting so you can delegate as you go. 

Bringing in new leadership 

Surrendering control can feel like a betrayal to your staff, your customers, your co-founders, or even to yourself. But holding a high degree of emotion about the company you’ve built can lead to feelings of responsibility, guilt, and obligation, which in turn creates a void of enjoyment in what you’re doing. 

This is how toxic atmospheres are created and mental health struggles manifest. 

Deciding to step down might be the best thing you can do for your company, but it requires a huge mindset shift. That means focusing on how you’ll benefit rather than what you’ll “lose”. 

Seasoned CEOs are often brought in to target specific goals like rapid growth or global expansion. They are task-focused and tight budgeted. Their natural disconnect from the origins of the company and the passions that fuelled it give them a clearsightedness you may never possess. 

CEOs may be short term or even temporary. They’re there to get a job done. If you want to make money, hired CEOs are heat seeking missiles, dedicated to maximising value for shareholders (you included). 

You know your product better than anyone. But every founder is plagued by personality-based blind spots. Outside guidance is non-negotiable. 

Every founder hopes that when the time comes to transition, to move up or to move on, the choice will be in their hands. One of the best ways to ensure this is to make the decision when you start. 

Your actions from day one should be geared towards your goal; whether it’s building up a company to sell, or building one to run.  

How you respond to growing responsibility will be the key decider. You might be a manager, you might be a maker. Either way, very few startup founders have just one idea. Choose carefully which ones you stay with.

Burn baby burn: startup inferno

Burn baby burn: startup inferno

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