The Secret Sauce of Strong Founder CEOs

Michael Cunningham, June 20th, 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 Über’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 Über. 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?

Michael Cunningham

Partner, Lonergan Partners

Specialties: Big Data, Cloud, IoT and Health-Tech

650-413-6008

michael@lonerganpartners.com

Michael Cunningham Portrait