Published on February 20th, 2018 | by Jose Vasquez2
Entrepreneurs Don’t Make Good CEOs for Startup Tech Companies: Here’s Why
Entrepreneurs aren’t always the best candidate to become CEO of the company they started.
The terms “entrepreneur” and “CEO” may seem interchangeable, but they’re two distinct roles. Entrepreneurs are the ones who come up with an idea and start a company from scratch, while CEOs are the ones who move into an existing company to lead and manage it and its people.
In some cases, the original entrepreneur of a company can become its CEO and lead the company to success (like Jeff Bezos or Larry Ellison). But in most cases, it’s better to have another, more experienced CEO take charge.
These are just some of the reasons why:
- Skillset. Entrepreneurs specialize in building companies from the ground up, while CEOs specialize in managing them. CEOs oftentimes have business degrees, while entrepreneurs can get by with a good idea and enough dedication to take that idea off the ground. Entrepreneurs are better at managing limited resources and putting infrastructure together, while CEOs are better at sustaining an enterprise and building profitability.
- Experience. Dedicated CEOs have years of experience managing companies, but this isn’t always true of entrepreneurs. Even serial entrepreneurs have more experience starting a company than actually running one. That experience makes a big difference when you’re facing a complex problem, or when you’re breaking into new territory for the first time.
- Adaptability. Entrepreneurs tend to be committed to their original vision. They don’t like the idea of changing their target audience, product, or original business blueprint, even when it’s necessary for the survival of the company. CEOs are better here because they’re less focused on the original concept, and more focused on making the company successful in the long term.
- Tough decisions. Similarly, entrepreneurs may have a tough time firing their original staff or making similar company sacrifices to preserve momentum, while CEOs have no such restrictions.
If you’re an entrepreneur, you can certainly become a CEO, but it may not be what’s best for your company. If you’re looking for advice on how to move forward, contact me today!
Re: the immorality of the boards of directors Seems to me that the immorality , or otherwise, of Boards is beside the point. What is strictly relevant, is their fiduciary duty the legal duty of a fiduciary to act in the best interests of the beneficiary legal duty acts which the law requires be done the shareholders. One”s immorality depends on what ethical system one feels bound by. Therefore it”s somewhat subjective. Their legal obligations (while also subjective) is more clearly defined. That”s where the emphasis should be placed. Change the law! Sharpen it via amendments, clarifications or whatever. That would be a start. Next, make individuals not companies responsible for transgressions. In short, don”t fine companies which can”t be imprisoned, jail individuals, even whole Boards, if it can be demonstrated that CEOs and Boards made decisions that were outside the law. Just imagine how that would sharpen the mind of Boards and CEOs. It”s individuals that make decisions and it”s individuals who must be held accountable. (Regardless of their felt moral position.) We live in a society that is (supposedly) governed by the Rule of Law. Why not make it a lived experience as well.
Jose Vasquez, thank you ever so for you post.Much thanks again.