The real role of the CEO
We’ve invested in 19 companies since our founding and we’ve seen some CEO’s use their time much better than others. In our view, below are the tasks a CEO should prioritize. After that we’ll share some of the things we see CEO’s do that aren’t a good use of their time.
Partnerships. One of your largest priorities should be to build partnerships with other companies for two reasons: i) larger partners ultimately become strategic acquirers that pay the biggest premiums for the business; and ii) great partnerships drive lots of revenue through integrations and the leveraging of the partner’s sales team to sell your product with theirs.
Major Customers. Helping close and keep major customers is a CEO role that never goes away. Large, marquee customers need to feel the CEO cares about them and they need to know they have access to you. You should be helping your sales reps close major accounts and accompanying them on major sales calls. If you’re not doing this already, guess what: the CEO’s at your competitors are. Once the major client is closed, they should have your email address and feel free to reach out to you any time. Additionally, good CEO’s check in with their major customers to make sure they’re happy and also explore upsells, additional uses of the product, and even leads.
Recruiting. As a CEO of a rising company in your industry, you should be in touch with the best talent in your industry and constantly trying to lure them to your firm. This includes C-suite executives but also the best sales reps, tech talent, and great customer success reps. Nothing is more effective in getting talent to a company as when the CEO reaches out directly and makes people feel wanted.
Do the three meat & potatoes tasks above, and your company will scale ad nauseum. Here are some of the things you shouldn’t be doing.
Visioning. Nothing scares us more than an aloof CEO constantly preaching about his vision. You can see these CEOs a mile away: they spend way too much time looking for speaking engagements on the conference circuit and are constantly pontificating about where the product is headed. They use the words ‘vision’ and ‘mission’ way too often, and don’t really get much done. Since they’re not actually executing with the sales team, CS team, and product team, all they’re doing is ‘thinking’ and probably don’t understand what it will actually take to execute.
Review legal docs. You are not a lawyer. You are not good at playing lawyer. So why are you reviewing edits to customer contracts? While you should certainly be aware of edits, this is something that should be left to a lawyer if it’s complex. If it isn’t complex, then just accept minor changes and move on. We’ve never seen an edit to a customer contract ultimately come back to hurt us in any of our 19 investments.
Speaking with VC. You do not need to spend much time speaking with VC unless you’re actually about to fundraise or are in a fundraise. Believe me, if your business is attractive, VC will be all over you when the raise is on – they don’t need a relationship. When we hear CEO’s talk about building a relationship with VC, frankly our eyes role. Those high level, superfluous calls you’re doing aren’t really providing information on what the VC will be like to work with. Also, while you were disclosing everything about your company during the love-fest conversation, the VC was comparing what you said to his notes from calls with your competitor. Did you really think he was building a relationship only with you? Nope, he’s doing calls like this with you and all your competitors and if he ultimately invests in your competitor, the notes from your calls with him will come in handy. When you’re really going to learn about a VC is during the fundraising process itself and from the reference calls you’re going to do on them as part of fundraising, so avoid the calls to get to know VC today.
Being CEO is hard. There is no playbook and every CEO role is different, but the observations above tend to apply no matter what your company does.
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