Velas Coaching

Seven Challenges for a Startup CEO


Many startup founders although driven, lack the management and leadership skills necessary to grow their business. In fact, on many occasions, the founder is removed completely once the company moves into a rapid growth phase. The most famous founder removed from the helm of his company was, of course, Steve Jobs. He later returned to Apple with more experience and improved management skills, enabling him to grow the company to the behemoth it is today. Budding startup founders can realize this kind of success early on if they play their cards right.

Below is a list of 7 challenges a CEO must face in the early phases of a startup to make the founderàCEO transition successfully:

1-  Hiring and building a great team. One of the biggest challenges a new startup CEO faces is attracting a talented workforce. Once the company transitions from the founder and a handful of friends to hiring a full-time staff, young CEOs must decide how they’ll compete for talent with behemoths like Google, Amazon, or Twitter. Well-established companies like these draw top performers by offering outstanding benefits packages, an advantage that can be difficult for a new startup to compete with.

What to do about it? To draw people who are exceptional at what they do and fit well into the company culture, startups need to offer what prospects are looking for. Most people understand that a new startup can’t offer premium benefits packages like the big guys, but what you can offer is communication and an opportunity to pursue their hopes and dreams. Prospects are looking for three things: the specifics of the role they are applying for; the importance of the role to the startup’s overall mission; and where they should expect to be as the company continues to grow. If you can afford it, get yourself a good recruiter, someone that understands your needs and will find the right people who can make your dream a reality. See the recruiting challenges many young CEOs have in this blog post. I’m sure you can relate.

2-  Shifting from a founder mentality to that of a CEO.  Founders are founders forever, while CEOs are transitional. Whether they stay with the company one year or twenty, they’ll eventually move on. A founder transitioning into a Startup CEO role is another animal entirely. A founder must shift their mentality from getting things done to enabling others to get things done. Founders suddenly go from being hands-on to overlooking all the other areas a CEO must be concerned with, such as operations, human resources, and unfortunately, office politics.

What to do about it?  Get the right mentors and tap into resources that can help you put these processes and procedures in place. Utilize resources like the Employers California Association ( or organizations like it. Look at your peers and see if any of them have already made the transition successfully. If so, recruit them as mentors. The key is to find someone who has already solved your problem,

 3- Losing the confidence of capital investors. This is a top concern for most founders. Two things could happen once the company loses its investors’ confidence: a) The founder is replaced by a traditional CEO, and b) The lack of funds derails growth and inhibits daily operations of the business. If you’re wondering why a venture capitalist would withdraw funding or refuse to provide funding at all, here is a list of reasons. Beyond these reasons, there are three things that will quickly erode your credibility with venture capitalists: you don’t do what you said you were going to do; you over promise and under deliver; you don’t listen to advice.

What to do about it? Avoid these mistakes by being honest, realistic, and open to resources the investors have to offer. If you need help, reach out to a coach or mentor. This will help you gain the confidence of your investors and grow your business. Trade in the “I can do it alone” attitude for that is open to input and advice.

4- Not having a clear vision: Whether you call it a vision or a mission statement, the goal is the same: to explain what your company is doing and why. Along with the startup team and market size, vision is one of the three factors investors base their decisions on. And of the three, it is the most important. Having a clear vision provides a direction in which to execute and is a basis for explaining decisions that must be made. Thus conveying a clear vision is paramount for your startup.

What do about it? Know your vision from the start. Why does your company exist? What is its reason for being? Develop a vision that will inspire you to stay on track from the get-go. A mission statement is like a photograph of your future business, and it will give your business shape and direction. Click here for some examples of mission statements and see how these can help you stay motivated and focused.

5- Neglecting personal health.  Running a successful startup takes a lot of dedication, but it should not be at the expense of your health or personal relationships. Working 14+ hours a day to stay on top of everything will do you and your team a disservice. If you’re sleep-deprived, you’ll become impatient and easily irritated by requests for help. Your job is empowering your team and being available to support them. If you don’t take care of yourself, you won’t be able to be there for them.

What do about it? Get enough sleep and exercise. Spend time with loved ones. Read and learn. Get to a CrossFit gym. CrossFit is the ideal fitness regiment for a busy professional. Moreover, if you bring CrossFit to your startup, not only will you be able to take care of yourself, but you’ll also create a culture of fitness and camaraderie. CrossFit is based on constantly varied, high-intensity interval training (HIIT). This means more physiological benefits in less time compared to doing one type of exercise at a low or moderate intensity, such going on a five-to-six-mile jog five days a week.

6- Accepting adult supervision: It is said that Google recruited Eric Schmidt to provide “adult supervision” for Larry & Sergey. About a decade before that, eBay hired Meg Whitman to provide experienced leadership for the company founded by Pierre Omidyar and Jeff Skoll. It’s more common than you think. Being able to accept the fact that you need help is big. If you’re not up to the task of being at the helm, find the right person with the right skills to team up with and grow your organization that way. You’ll be happier and more effective.

What to do about it? You need to figure out where your strengths lie. If you get your satisfaction out of creating something, then you’re entrepreneur material. If you don’t enjoy or don’t know how to manage and grow your organization, I suggest you find the right person to team up with who can help your organization grow. Focus on what you are best at and find somebody to complement your strengths with his or her own.

7- Letting go of control: One of the biggest components of a successful Startup CEO transition is the need to let go of control. This is a classic dilemma because smart, successful leaders have an overwhelming desire to add their two cents to every discussion. They’re used to getting their hands dirty, being in the middle of every decision, and running the show. But as the organization grows, the need to micromanage and add value to every single decision is not sustainable. CEOs must shift from execution to strategic thinking.

What to do about it?  As you shift to the Startup CEO role, your job is to let go of control and empower your team to make decisions. If you don’t, you’ll erode trust and come across as a micromanager. Get yourself a leadership coach who can show you how to do this. He’ll help you offset your to-do list by creating a “what not to do” list, so you can stop a behavior that might be inhibiting your transition. He’ll teach you how to let go of the need to be in the middle of the action and the desire to approve every single decision. Read this post about how successful people get even better to help you deal with the process of letting go of control.




Luis Velasquez MBA, PhD

Luis is a leadership coach, employee engagement expert, and management trainer. Formerly a University professor and research scientist, Luis holds a dual Ph.D. from Michigan State University; and an MBA in Organizational Leadership.

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