The Right CEO When You Launch Might Be the Wrong CEO When the Company Is Growing The skills and proclivities needed when a company is launched and when it hits its stride are so different few people can manage both roles well.

By George Deeb

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Not all startup CEOs are created equal. And, the skill sets a startup needs during its formative days are very different than the skill sets needed when the company starts to scale. Let's compare the role of a CEO in businesses between zero to $10MM in revenues (early stage), versus the role of CEOs in businesses between $10MM to $50MM in revenues (growth stage) to make sure you are hiring the right one for your business.

Early-stage CEOs.

For early stage startups to be successful, it really needs a hand-on leader that is involved in the details. That person is making sure all team members are clearly aligned with the vision. They are in the weeds of launching the products, to get it just right. They are helping to craft the early marketing messaging to properly tell the story. They are assisting their sales team in helping close initial clients. They are designing operational processes from scratch. And, so on. This inward facing, hands-on role is what is required to successfully get a business off the ground in the early stage.

Related: What to Expect When You're CEO of a Successful Startup

Growth-stage CEOs.

In comparison, for growth stage companies to be successful, the focus needs to move from inside the company to outside the company. This includes things like hiring the best talent, building a strong outside board of directors, romancing investors, working the speaker circuit and looking for interesting M&A opportunities, to name a few examples. Therefore, the CEO's role is to hire the best senior management team possible, and let them run the day-to-day of the business. So, this is much less of a hands-on role bogged down in the minutia of the business.

The challenge.

The problem here is very few entrepreneurs of early stage businesses, can successfully make the pivot into a growth stage CEO. Either because they are not aware their role needs to materially change in order to effectively manage the next phase of their growth. Or, because they simply cannot change their behavior (as most people cannot). They simply love working in the details and have to be involved in every decision.

Related: The Problem With Your Business Is You: Making the Shift From Founder to CEO

And, that simply is not a scalable solution. You can't have a CEO of a growth stage business acting as a bottleneck on all major decisions. And, you certainly cannot attract and retain the right senior level management team that is required to scale a growth stage business, if the CEO is constantly micro-managing them on every business decision. Growth stage companies need to be built on the shoulders of a strong team empowered to make their own decisions, as it relates to the day-to-day operations.

So, what does this all mean? Either the founding CEO needs to embrace the above shift in their role over time, and successfully execute upon such. Or, they need to acknowledge they are the wrong person to lead the next phase of the company's growth, and they should hand off the reins to a more qualified growth stage CEO. This is not about "pride of authorship" and keeping your job. This is about maximizing the value of your equity, to give your business the highest odds of success at maximizing its valuation over time. So, take a candid look at yourself in the mirror, and make sure you are the right person for the job, in relation to the revenue stage of your business.

Be sure to read my companion piece about The Role of a Startup CEO.

Related: Corner Office Turnover: Why CEOs Succeed or Fail

George Deeb

Entrepreneur Leadership Network® VIP

Managing Partner at Red Rocket Ventures

George Deeb is the managing partner at Red Rocket Ventures, a consulting firm helping early-stage businesses with their growth strategies, marketing and financing needs. He is the author of three books including 101 Startup Lessons -- An Entrepreneur's Handbook.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Business News

He 'Accidentally Discovered' a Semi-Passive Side Hustle in College — Now He's on Track to Make More Than $500,000 This Year

When a lack of funding put a stop to Zach Downey's pizza vending machines, he stumbled upon another lucrative idea.

Business Ideas

55 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Apple Faces Class Action Lawsuit Over iCloud's Alleged 'Enormous Structural Advantage'

The lawsuit asserts that cloud storage on iPhones would be "better, safer, cheaper, and more prevalent" without Apple's policies.

Business News

Here's How Much Amazon's Typical Customer Makes, Plus How Much They Spend on the Platform Per Year

A retail snapshot from data company Numerator paints a picture of who shops at Amazon and where they usually spend their money.

Business News

The Infamous Diner Booth from 'The Sopranos' Finale Is Up for Auction — And Some Fans Are Livid: 'Let Future Generations Enjoy'

The booth is still in the restaurant and ice cream shop in New Jersey where the finale was filmed.