Mastering transition from founder to ceo

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

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


Five Stages of a Startup CEO
• Startup CEO
• Fund raiser
• Leader & the crisis manager
• Post-startup CEO
• The transition


The Startup CEO
• Often an engineer thrust into being a CEO
• Engineers are problem solvers
– High IQ, but low EQ
• Unexpected role & demands


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


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


Culture
• Culture is “how things are done when there
are no written procedure”
• CEO/founder actions defines the culture
– Collaborative?
– Authoritative?
– Consensus-based?


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


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?


Difference Between Sales
Marketing

• Not everyone can make the transition

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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!


Types of Sales People

1. “Hunters” or “gladiators”
2. Business development experts
3. Account executives
(“professional sales” person)


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


“the Professional Salesperson”
• Usually trained at a big company
• Require support staff to succeed
• Good at taking orders & building
relationships
• expensive


Biz Dev Professional
• Good at making large
alliances
• Expensive to maintain
• Usually needed once you
have a product


Timing
Bootstrap seed series A series B series C exit

Product Proliferation
Understand
customer’s unmet development
need
Deployment

Prototype


Timing
• You will need different people at different
stages

Bootstrap seed series A series B series C exit


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


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?


Leadership
• Leadership is not pleasing everybody
• It is doing the right things, for the right
reasons

• Are you willing to be unpopular


Managing the Board
• Trust – build it, earn it
• Communicating bad news
• Communicating good news
• Being prepared
• How often to approach them


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


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


Email
• Conquering emails
– Open email client only twice a day
• 11 am and 5 pm
• Find blocks of time to do “projects”


Essential Skills
1. Clarity – in your thinking
2. Networking
3. Communications
4. Empathy


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


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


Know the Timing
• Who exerts control & power in a company

Startup 1st Product Sales $1-10M Sales to $100M

R&D Sales Marketing Finance

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


Founder
• This is an honor & obligation
• Wear it well
• It is beyond the title that you may carry


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


Don’t Lose Perspective


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!


Mastering transition from founder to ceo

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