It goes without saying that founders and CEOs both shoulder a lot of responsibility. And in many cases, the two roles are handled by the same person, especially in a startup's early years. As companies grow, it's pretty common for founders to step aside and let someone else take the reins as CEO. That's often a good idea for plenty of business reasons, and it can make everyone's lives easier. But the simplest reason is often that founders just aren't always cut out for it. Here are a few signs you're a good founder, but not the best CEO for the job.
Being a founder and being a CEO involve fundamentally different responsibilities—both of which are pretty vast. Since many startup founders haven't served as CEOs previously, it's easy to imagine that those sets of duties (and the skills they demand) overlap more than they do.
A founder is there to inspire creative thinking and turn a vision into a reality. They listen to their teams and push others to be the best they can be. It isn't that CEOs don't do those things, it's just that they do them within a much more managerial framework. The goals are more about ensuring operations run smoothly, deadlines are met, and the business is running as it should.
Being both a good founder and CEO takes an incredible amount of dedication and drive, but shifting into that operational mind-set isn't something every successful entrepreneur naturally excels at.
Sometimes workload becomes the decisive tipping point that leads founders to hire a CEO. When one person tries to manage both roles, it’s common for one set of priorities and responsibilities to take precedence over the over. Without even realizing it, good founders have a tendency to keep being good founders, at the expense of becoming good CEOs.
And who can blame them? Hiring a CEO is a daunting thing—delegating some of the key responsibilities to another leader isn't something many founders are too keen to do. "Founders treat their company like it’s their firstborn child," Stanley Meytin, CEO of True Film Productions, tells me. "They are sometimes too passionate, and that passion can blind them from making the right decisions to grow their business. CEOs take a more calculated approach to help their companies achieve their growth goals."
But as a company grows, the risks that important aspects of the business will suffer if they aren't taken over by a full-time CEO can mount. And done right, those responsibilities can be shared, making everyone happier and the company more successful.
Founders and CEOs are both hardworking people. They dedicate themselves to their craft and are constantly moving forward. When those roles are shared by one person, though, it’s far too easy to get overwhelmed and pass that pressure onto your team—leaving everybody overworked and the company worse off.
The sheer amount of stress that comes from straddling both sets of duties requires founder-CEOs to lean more heavily on their team members to stay afloat. And there's only so much picking up after others that everyone else will be willing to do. Morale can sink, and so can a fledgling company's productivity and long-term prospects.
The best founders are known for being true visionaries. It’s in their nature—they build companies based on the innovative ideas that sneak into their minds. They build, grow, and share those ideas with others who believe in them. For founders, vision isn't the problem, but sometimes execution is.
The sad truth of entrepreneurship is easy to remark on but difficult to correct: A great vision doesn’t amount to much if you can’t make it a reality. For many companies, two heads are simply better than one. Bringing a founder's (or cofounders') ideas to fruition often turns out to be a group effort that rests on collaborative leadership. With a CEO to help steer the startup forward, founders are freed up to focus on developing and maintaining their vision while keeping everyone else inspired.
Sometimes that even means leaving to do something new. As Yoav Vilner, cofounder and CEO of Ranky.co, explains, "Founders are usually driven by their strong and intense emotions while the company is still young. However, due to their entrepreneurial characters, it’s only natural they will eventually take down a notch and start thinking of their next venture. When that happens, the CEO must be there to lift the energies up and maintain the company’s best interest from being discouraged."