There are founders. There are CEOs. And then there’s the backbone of the Agri-Food and ClimateTech startup culture: Founder-CEOs.
Here at CS Partners we have been privileged to work with, and been inspired by, many founder-CEOs. In the business world, they are a unique breed, driven by their mission and the deep science and technological expertise they bring to their founding vision. It is those essential qualities that make founder-CEOs such a powerful force in the Agri-Food and ClimateTech startup culture.
This sector is, by nature, built on the precipice of change. Big corporations and their stockholders don’t drive fundamental change. Scrappy, mission-driven startups, headed up by founder-CEOs deeply steeped in the science and technology of their solution, willing to take risks and push boundaries are the ones that drive change. Or at least start the change.
Indeed, founder-CEOs are uniquely qualified to build excitement and secure funding in the early founding stages of a startup venture. Yet it is also the very same quality that often ends up jeopardizing their company’s success. Unfortunately, especially as our sector has matured and easy capital has dwindled, we have seen a rash of founder-CEOs floundering at the scale-up and market building stage of their startup growth trajectory.
Is it possible for a founder-CEO to ride the wave to the successful, revenue producing company they initially envisioned? Of course. But they must be willing to recognize the likely pitfalls of their founder-CEO journey and implement strategies to avoid them.
The Big 3 Founder-CEO Pitfalls
There are three main pitfalls founder-CEOs often fall victim to as their startup scales.
1) Having a “Build It and They Will Come” Go-To Market Strategy
Most founder-CEO startups are generally science or technology-led, not market-led. That’s great for coming up with amazing ideas, but not so great when it comes to finding a market for that disruption. Unless the are confident they have the runaway (i.e. time and money) to establish a new market, founder-CEOs need to be careful they don’t develop a product for a market that doesn’t yet exist.
2) Throwing (Investor’s) Money Away
For boot-strapped startups, it’s all too easy to feel flush with cash after that first, critical series raise. But this isn’t the time to throw dollars at maybes. How founder-CEOs deploy that money is critical to framing the foundation of future success. They must be cautious and strategic in the research, collaborations, hires, and partnerships they spend their precious capital on.
3) Falling Victim to Their Own Hubris
Founder-CEOs are almost always brilliant in their chosen field. It’s why they are visionaries. But, an acclaimed career built in science and technology does not afford the same skill sets as a career spent in business, marketing and operational growth. Founder-CEOs need to be careful to not fall victim to their own hubris. Startups don’t mature on vision alone.
4 Strategies to Avoid the Pitfalls
Once they recognize the pitfalls, founder-CEOs can strategize to avoid them.
1) Add Independence to the Advisory Board
Include a seat (or seats) on the company’s advisory board for independent directors with no financial stake in the company. Founder-CEOs invest not just money but their passion and mission. Board members with a financial interest in the company are committed, but will always have their financial stake in mind. A voice whose sole role is representing the company’s best interest can provide the pragmatic approach startups often need to make as they scale and grow.
2) Add a COO to Your Founding Team
All too often founder-CEOs add overlapping skills to their founding teams. But the last thing early-stage startups need is more science or technologists on their founding team. What they need is business experience. Add a COO (chief operating officer) to the founding team and give them power. The founder-CEO remains the face and vision of the company, and the COO sets metrics and drives the milestones for growth to achieve the vision.
3) Be Realisitic
Build a realistic business plan and set achievable goals. Pie-in-the-sky business trajectories sound good in pitch decks but shake confidence in the company leadership when the company fails to achieve them. Realistic business plans take into account the time and hurdles it takes build out production pipelines, develop markets, and establish channel partners.
4) Hire for Growth, Not Just Industry Experience
Especially in agriculture, startups often focus on hiring for industry experience and forsake growth experience. That’s a mistake. Yes, it is important to have team members that understand the industry but if they came out of corporate jobs they won’t have experience working in a growth environment. Make sure your c-suite includes at least some team members who have been part of a growth experience, have proven they can succeed and in an environment that will requires unique skills like operating in stealth and the rapid strategy shifts that are part and parcel of the startup experience.
Navigating the Founder-CEO Journey – You Can Do It!
Navigating the founder-CEO journey isn’t easy. But then again, neither is founding a startup in the first place. Founder-CEOs are nothing if not up for a challenge. It’s all about using your superpowers for good, but wisely and strategically!
So, if you are founder-CEO what do you think? Have you experienced these pitfalls? If not, what have been your biggest stumbling blocks? How have you overcome them? Where have you achieved your success? What are you still struggling with?
Here at CS Partners we are committed to supporting founder-CEOs by helping them recruit the talent they need to realize their company’s mission. Contact CS Partners, or feel free to email me directly at s.leich@cs-partners.net.
My lines are always open for a chat! Cheers!
Simon Leich, CEO
CS Partners
