The Secret Sauce of Strong Founder CEOs

Michael Cunningham, June 20, 2017

The recent turmoil about Travis Kalanick is another chapter in the tech saga of “Founder CEOs who get their companies into trouble.” Kalanick certainly has his flaws as a leader, but in fairness he did build an industry-altering empire now valued at $70B. Kalanick’s embattled status as Uber’s CEO begs the question, what makes certain Founder-CEOs more effective operators and leaders than others?  

The first answer to this question is prior experience, something Kalanick possesses, having successfully founded and sold another company before Uber. However with the funding available in today’s market, there are many first-time CEOs without substantial prior business experience. Therefore, an assessment of their ability to lead and scale is based on inferred capability. 

Capability is a hard thing to judge when there is no track record. I’ve seen many candidate executives hesitate to join a first time Founder led team because they fear working for someone who is (potentially) arrogant, inflexible, controlling, unwilling to listen to new ideas, etc (this list of fears is long) … even if the technology is awesome. This is a big reason why Talent Partners at VC firms are building extensive networks of seasoned business people who can coach and mentor inexperienced Founder-CEOs.

That being said, there are plenty of Founder-CEOs building amazing technology companies today. So what makes first-time Founder-CEOs like Mark Zuckerberg (Facebook) or Katrina Lake (Stitch Fix) effective? Yes they are smart, but I believe a substantial part of leadership capability is based on character traits. If I were investing or joining a company led by an inexperienced entrepreneur, these are the critical personal attributes I’d look for:

  • Self-aware

    Someone who is willing to learn and is keenly aware of their strengths and weaknesses.

  • Perceptive

    Perceptive is derived from the Latin word percipere which means “to obtain or gather.” In this context we use it to describe someone who learns quickly and adapts to the changing needs of a growing business. This person will have strong intuition and common sense, especially as it relates to business principles.

  • Humble

    S/he doesn’t have to be the smartest person in the room and is okay with relinquishing control over certain operational areas as the business grows. This makes it possible to attract strong executive talent around the CEO. An inexperienced CEO is going to need a great team.

  • Confident

    Someone who has the gravitas to act boldly and be decisive at critical periods. This is someone who is cool under pressure and can weather the rocky periods.

  • Communicative

    As figurehead of the company, the CEO has to be someone who connects well with people and is skillful with messaging. People are driven by emotion and want to get behind someone they believe in.

  • Proactive

    Someone who thinks several steps ahead and builds systems now for later.

  • Possesses Grit

    Someone who is unwilling to give up and persists through difficult challenges.

Without a doubt, I could recruit a great team for a Founder-CEO with this profile. Does this describe the founder you work for?