Thinking Like a Founder and Thinking Like a CEO

Because I fund very early (idea and pre-seed) companies and because I went through these stages myself three times as a founder, I have deep empathy for the way founders feel as their companies grow. One of the most painful transitions is the one from when you can do everything yourself to where you need a team. It’s a pretty universal trait that founders are do’ers and control freaks, because that’s how you build a great product and find product market fit.

But one day, you wake up and someone wrote you a big check and expects you to grow 10x. For a couple of months, you try to do what you were doing before, but harder and faster and better. Hopefully before you burn out completely, you realize that you need a better way of doing things. The most obvious thing to do is hire people. That even takes surprisingly long to do for many founders (and one of the main reasons I invested in contra.com and Marketerhire which solve this with freelancers). The main thing seems to be time allocation. To recruit well, you are going to spend 25–50% of every day hiring. For the maker personality that most founders are, that seems like a total waste. But eventually, mostly by hiring too slowly or hiring the wrong people, you realize you need to do that.

I want to talk about the next phase. Now you have figured out that hiring people is important. But likely you still think in terms of goals and problems to be solved. In general, that’s a good way for a founder to think. The problem is that if you are also the CEO, that way of thinking needs to be complemented with thinking like a CEO. Great CEO’s are results driven, but they tend to have multiple modes. One mode that is almost always a weakness for founders is ‘people mode’.

A good example of where ‘people mode’ is the most effective mode to be in is when you are frustrated with people. I remember as a first time founder, that I didn’t have people mode. As long as everyone was aligned, things went well. But when someone was screwing up, or things weren’t going correctly, I was a total jerk. I don’t think I meant to be, it just triggered this voice in my head which was ‘it would just be easier if I did this myself.’ I will tell you right now, that is the wrong way to think. You will ignore me, but let me tell you how a CEO thinks.

When stuff goes wrong in startups, it can be a strategic problem, a product problem, a go-to-market problem, a distribution problem, or one of about 1000 things. But we make it about the people. We are just wired that way as founders because people are the easiest to blame.

CEO’s think differently. When stuff goes wrong, they also get frustrated. But they are better at stepping back mentally and trying to understand why. The way to do that is to go into ‘people mode.’ To get to the bottom of tough problems in organization, your team has to feel that you’ve got their back. If you do what I did and quickly get frustrated and blame them, they won’t feel that. If instead you acknowledge there is a problem and get to the bottom of it by treating everyone respectfully as you make up your mind, they will feel trusted. Even if you ultimately decide someone’s screwing up, you are far more likely to think about them like a person rather than a chess piece if you’ve gone in to ‘people mode.’

Since this skill is probably the toughest for founders, try to start going in to people mode about the same time you start hiring. One of the easies ways to do this is by doing one on ones and consciously shifting yourself into people mode during part of the meeting. Tell a team member something vulnerable about yourself. Maybe you haven’t been sleeping well, your Mom is sick… Your goal is to build a bridge with each person such that when the problems happen and you are still awkward at going into people mode, they will give you some slack.

Eventually you will get better at this, I encourage you to treat thinking like a CEO as a first class problem if your ambition is to be a leader for the long term.

Co-founder and CEO NetGravity, Rocketship Education, Zeal Learning, Dunce Capital. john@danners.org https://dunce.substack.com/