Dear Mr. Founding CEO: Would You Hire Yourself?
When most software startup founders embark on creating a business, they envision leading it to greatness. These founders see CEOs like Bill Gates, Steve Jobs, Larry Ellison, and Mark Zuckerberg and aspire to be like them.
Unfortunately, it very rarely works out that way.
Typically, founding CEOs — whether they’re founders of US or non-US startups — never make it beyond the expansion-stage, when the business has grown beyond $10-20M in revenue and has begun to scale. In fact, in my eight years as an investor at OpenView Venture Partners, more than 50 percent of the companies we invested in experienced some sort of CEO transition a few years after our initial investment.
And there’s nothing wrong with that.
While every founder may aspire to be the next Jobs, Gates, Zuckerberg, or Ellison, the reality is that CEO persona required of the startup phase is very different than the one that required of a CEO leading a company at scale. Startup CEOs need to be highly entrepreneurial and/or technical, while successful later-stage CEOs must be exceptional operational leaders. And the likelihood of founding CEOs having all of those characteristics is very small.
Then, of course, there’s the unique challenge for international founders of migrating a company from their home market to the U.S., and having to harmoniously manage successful operations in both locations. All of a sudden, you’re wearing two hats, and finding yourself torn between your home country and your new opportunity. As ForgeRock founding CEO Lasse Andresen recently revealed in a conversation for my blog, those responsibilities can quickly take their toll.
Should Non-U.S. Founders Pass the Baton When They Move to the U.S.?
With all of that said, there’s no perfect time for an international founding CEO to step down and hand over the reins to a new leader. In fact, in most circumstances, that transition isn’t always best move in the early stages of a U.S. migration.
After all, starting a company and moving it to a new country require vision, energy, and the audacity to do something in the face of seemingly insurmountable obstacles and risks. It requires the passion to inspire others to take similar risks, as well as the tenacity and agility to attack a new market or disrupt an existing one.
Frankly, I actually think it’s imperative that international founders remain the CEO of their companies when they initially migrate to the U.S. — at least until the company is well established and executing against a successful and sustainable economic model.
Once the business reaches that point, however, international founders need to sit down and perform some much-needed self-reflection.
As Mendix’s Derek Roos told me in another blog conversation, it’s critical that non-U.S. founding CEOs understand the lifecycle of their company and assess whether their skill set translates to the stage it’s entering. If they truly believe that they possess the characteristics, capabilities, and energy to continue leading the company’s U.S. growth, they might be able to live the dream of being the next Zuckerberg, Gates, or Ellison.
But I wouldn’t necessarily plan on that happening…
Be Honest: Would You Hire Yourself as CEO?
Again, the role of an expansion-stage CEO at high-growth American company is completely different than that of founding CEO for a European startup.
Scaling a business — particularly in a market that you’re not familiar with — requires critical operational experience and the network to recruit highly experienced senior managers who have specific functional expertise. You’ll need to establish an operating rhythm that ensures your growing team remains focused on the right set of priorities. And you’ll need to be willing to abandon your home country, because once your business builds momentum in the U.S., you’ll likely be stuck here.
Maybe you are capable of those things, but there’s absolutely no reason to be ashamed if you aren’t. In fact, international founders who recognize their shortcomings and raise their hand first to point out the need for a transition are brave and shrewd, not failures.
So, put your own personal aspirations aside and dispassionately assess your skills against what the company needs right now and well into the future. Could you have steered the company better last year? Could you have better managed the company rhythm so that all goals you set were achieved? What was missing? Where did you fail and why?
Next, ask your board of directors to conduct a formal review of your performance, and jot down a list of the skills you would look for if you were asked to help recruit the ideal CEO candidate for your business. If you genuinely believe that you’re the best leader for the business as it transitions and grows in the U.S., then by all means say so.
But if your objective and honest answer reveals that you’re not the best person to lead your international company’s growth in the U.S., it’s probably time to figure out why — and then do something about it.