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Mastering transition from founder to ceo

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  • 1. Founder to a Successful CEO Mastering the Transition Naeem Zafar UC Berkeley-Haas Business School, Charter Member TIE SV www.NaeemZafar.com Twitter: @naeem Entrepreneurship All rights reserved © Naeem Zafar 1
  • 2. Personal Background • Faculty at Univ of Calif Berkeley Haas business school • Founder Concordia Ventures – advisory to entrepreneurs • CEO of three companies (semiconductor & software) • Worked in engineering, research, marketing & sales • Experience at one large multinational & 6 startups • One IPO (Initial Public Offering) • Wrote six eBooks on entrepreneurship (www.NaeemZafar.com) • Raised over $70M in multiple ways (VC, asset sale, debt, angel) • Traveled to 73 countries, lived in 3 • Brown University ‘81, Univ of Minnesota MSEE • Charter member of TiE Silicon Valley • President of OPEN Silicon Valley • Advised or mentored over1000 entrepreneurs Entrepreneurship All rights reserved © Naeem Zafar 2
  • 3. Five Stages of a Startup CEO • Startup CEO • Fund raiser • Leader & the crisis manager • Post-startup CEO • The transition Entrepreneurship All rights reserved © Naeem Zafar 3
  • 4. The Startup CEO • Often an engineer thrust into being a CEO • Engineers are problem solvers – High IQ, but low EQ • Unexpected role & demands Entrepreneurship All rights reserved © Naeem Zafar 4
  • 5. Startup CEO • Living in the “fog” • Most of the time on trivial issues – What is urgent vs. what is important • Most problems are people problem Entrepreneurship All rights reserved © Naeem Zafar 5
  • 6. Getting Used to New Role • (almost) no one will tell the truth • You will never be liked (again) • You will have to learn to read between the lines • Whom to consult with Entrepreneurship All rights reserved © Naeem Zafar 6
  • 7. Culture • Culture is “how things are done when there are no written procedure” • CEO/founder actions defines the culture – Collaborative? – Authoritative? – Consensus-based? Entrepreneurship All rights reserved © Naeem Zafar 7
  • 8. Fund Raising • Fund raising is most important job that a founding CEO has O2 – This cannot be delegated • It will consume you • Methodical about not over-shopping the company & researching before you approach investors Entrepreneurship All rights reserved © Naeem Zafar 8
  • 9. Filling the Roles • CTO: outward facing technical evangelist • Technical architect vs. professional development manager • Sales head: look for a gladiator (not a professional sales person) • What to outsource? Entrepreneurship All rights reserved © Naeem Zafar 9
  • 10. Difference Between Sales Marketing • Not everyone can make the transition All rights reserved © Naeem Zafar 10
  • 11. Building Sales Organization • You must be the first sales person yourself • Do not hire too soon • Sales people are hardest to hire – But easiest to fire! All rights reserved © Naeem Zafar 11
  • 12. Types of Sales People 1. “Hunters” or “gladiators” 2. Business development experts 3. Account executives (“professional sales” person) All rights reserved © Naeem Zafar 12
  • 13. Gladiators • Solo hunters • They go away, don’t check-in frequently, bring back customers having sold “the product” • Make sure that they sell what you make All rights reserved © Naeem Zafar 13
  • 14. “the Professional Salesperson” • Usually trained at a big company • Require support staff to succeed • Good at taking orders & building relationships • expensive All rights reserved © Naeem Zafar 14
  • 15. Biz Dev Professional • Good at making large alliances • Expensive to maintain • Usually needed once you have a product All rights reserved © Naeem Zafar 15
  • 16. Timing Bootstrap seed series A series B series C exit Product Proliferation Understand customer’s unmet development need Deployment Prototype All rights reserved © Naeem Zafar 16
  • 17. Timing • You will need different people at different stages Bootstrap seed series A series B series C exit All rights reserved © Naeem Zafar 17
  • 18. Founders vs. Employees • Owner mindset vs. employee mindset – Employees have entitlement mentality • First 10 hires will set the tone for the rest of the company’s life Entrepreneurship All rights reserved © Naeem Zafar 18
  • 19. Startup Hiring • “A” players hire “A” players, • “B” players hire “C” players • Are these the very best people in the world that I can get for this job? Entrepreneurship All rights reserved © Naeem Zafar 19
  • 20. Leadership • Leadership is not pleasing everybody • It is doing the right things, for the right reasons • Are you willing to be unpopular Entrepreneurship All rights reserved © Naeem Zafar 20
  • 21. Managing the Board • Trust – build it, earn it • Communicating bad news • Communicating good news • Being prepared • How often to approach them Entrepreneurship All rights reserved © Naeem Zafar 21
  • 22. Board Communication • Three buckets – Things that you are informing the Board – Things that you want to present to the board and seek their input before YOU will make the decision – Things that you want to present so that the Board can make a decision Entrepreneurship All rights reserved © Naeem Zafar 22
  • 23. Priorities • Separate what is important from what is urgent • Spend at least one day a month of disconnecting & thinking about the big picture • Create emotional buy-in from people Entrepreneurship All rights reserved © Naeem Zafar 23
  • 24. Email • Conquering emails – Open email client only twice a day • 11 am and 5 pm • Find blocks of time to do “projects” Entrepreneurship All rights reserved © Naeem Zafar 24
  • 25. Essential Skills 1. Clarity – in your thinking 2. Networking 3. Communications 4. Empathy Entrepreneurship All rights reserved © Naeem Zafar 25
  • 26. Crisis Manager • Over communication – Avoids gossip • Listen, gather information • Look in control – Even if you don’t feel like it (and you wont!) • Explain your actions Entrepreneurship All rights reserved © Naeem Zafar 26
  • 27. The Post-Startup CEO • Time will come to create processes • Design efficient processes • Structure can create efficiency • Think scalability • When to be frugal • Minimize fixed costs so that you can be nimble Entrepreneurship All rights reserved © Naeem Zafar 27
  • 28. Know the Timing • Who exerts control & power in a company Startup 1st Product Sales $1-10M Sales to $100M R&D Sales Marketing Finance All rights reserved © Naeem Zafar 28
  • 29. The Transition • The time will come when you are not the right person for the job • Deal with this gracefully • Help plan it • Seek mentors outside the company Entrepreneurship All rights reserved © Naeem Zafar 29
  • 30. Founder • This is an honor & obligation • Wear it well • It is beyond the title that you may carry Entrepreneurship All rights reserved © Naeem Zafar 30
  • 31. Things Founders Forget • Control is not same as ownership • All ideas have to be chiseled away to be refined – encourage debate • Learn about vesting, protect equity Entrepreneurship All rights reserved © Naeem Zafar 31
  • 32. Don’t Lose Perspective Entrepreneurship All rights reserved © Naeem Zafar 32
  • 33. Summary • This transition is not easy & there is no school for it • The most important asset is people – invest in people & reward loyalty • This company is not the end game! Entrepreneurship All rights reserved © Naeem Zafar 33
  • 34. www.FiveMountainPress.com All rights reserved © Naeem Zafar www.startup-advisor.com 34