“The company I founded has grown a lot in the last year and the expectations on me as a (first-time) CEO continue to grow. What pointers do you have for successfully making the transition to CEO of a scaled company?”
Most startup founders don’t set out to become CEOs. Rather, they find themselves in this role as a consequence of their success in building a product or service that becomes highly demanded — and their leadership requirements change dramatically as a result.
Scaling your company means transforming a small team into a complex ecosystem, with the needs of more customers, employees, investors and board members to juggle. That inevitably creates more noise, making it harder to prioritise and master the broad strategic thinking required of a CEO.
Your early investors, who backed you for your founder qualities, will question if you can transition from a builder to a scaler — two distinct profiles in the tech industry. Company culture is likely to become a tangible concern, and maintaining control over it might keep you up at night. As headcount grows, so does organisational complexity, potentially leading to ‘social debt’ — the accumulation of unresolved interpersonal and cultural issues that could put a company at risk in the long term if left unresolved. Your vision and storytelling must reach further than before to keep everyone aligned.
Sound familiar? This challenge is part of the maturation journey required to step up as a CEO. With the tougher scaling environment, it's no wonder we hear stories of founder burnout and CEO turnover — but that’s by no means inevitable.
Here’s how to scale with your business.
Navigating the transition
Having worked with many founders on this journey, I know it's tough. Many founders mistakenly believe they need to simply mimic traits of successful CEOs — such as being a visionary thinker and showing resilience — but this often lacks personalisation and falls victim to survivorship bias. My advice instead is to focus your attention on the unique factors that could stand in your way and develop a plan to overcome them.
The reasons for founder failure in the CEO role are more limited and consistent than the long list of ‘successful’ CEO traits. Interestingly, a lack of previous CEO experience is not a leading cause of failure. While prior experience can be helpful, first-time CEOs are not necessarily at a disadvantage. Many legendary CEOs, like Nvidia founder Jensen Huang, were first-timers. The key is not to get hung up on your lack of experience but to focus on the learning opportunity and self-awareness.
Develop essential CEO skills
In the early stage, most founders will not have mastered essential CEO skills. Two critical areas that founders often struggle with in particular are prioritisation and delegation.
At some point in history, the word 'priority' lost its singular meaning, and everything became a priority. As a CEO, time is precious, and it's essential to focus on the single highest impact business matter at any given time. At Sequoia, partners often repeat to founders the saying: "Keep the main thing, the main thing." Find frameworks that help you eliminate distractions and focus on your priority of the moment. In his tactical guide CEO coach Matt Mochary recommends implementing the ‘Top Goal’ practice: blocking two hours each morning for your highest priority, a habit that yields significant gains through daily consistency.
Delegation is challenging for founders who like to be involved in every detail. Every task you don't delegate takes time away from strategic work. Conduct a calendar audit and force yourself to hand off 30-50% of your tasks. Use a risk management framework to determine what things should and should not be delegated; Jeff Bezos famously has a probability/impact system for categorising all decisions as Type 1 (irreversible, should be made slowly) vs Type 2 (reversible, should be made quickly). Delegation requires trust in your team; if you struggle with trust or lack suitable team members to take things off your plate, consider making some team adjustments. Seek help from your investors and board for role calibration and benchmarking.
Know your strengths well, know your blindspots better
Skill development will take you part of the way, but without knowing your natural strengths and weaknesses, its effectiveness is limited. Understand your default behaviours (what you do) and your underlying personality traits (why you do it).
Entrepreneurial brilliance often coexists with derailing 'dark side' behaviours, which can emerge under stress. Visionary, headstrong founders might also be extremely stubborn, and detail-oriented founders that pride themselves on having high standards might struggle with micromanagement. A classic feature of derailer behaviour is that it is hidden or masked, emerging only when a person faces high-pressure situations (and startups are like one big pressure cooker). These hidden weaknesses can limit your success for both your company and career.
Seek support on your journey
- Mentorship: If possible, find a seasoned CEO mentor to share their experiences and advice. Listen to their stories and hear about their battle scars. Ask specifically about how they developed and used the skills that you are developing. Investors and executive recruiters can help make connections to potential mentors, or join networks like Boardwave.
- Coaching: Work with a CEO coach to understand your strengths and default responses to pressure, and mitigate your blindspots. Coaches aren’t magicians, but the right one can be invaluable as they can help drive self-inquiry that can improve your odds of a successful transition. The best coaches do very little marketing and often come referred by trusted sources.
- Team building: Recruit high-performing executives who complement your skills and compensate for your gaps. Find those who will provide you with direct, honest feedback. Investing time in sourcing this talent is priceless.
- Self-check: Regularly assess your happiness in the CEO role. If you feel someone else is better suited for the next growth phase, there’s no shame in stepping back. There are many ways to drive your business forward without being the CEO. Don’t suffer in silence — reach out to your cofounders and board members.
Recognise that this transition has no final destination and embrace continuous learning along the way!
Zoe will be answering questions from Sifted readers each month. Have something you want to ask? Reach out at askzoe@sifted.eu.
