Instigator Blog

First-time startup CEOs don’t have it easy. Regardless of how much previous experience they might have - whether it’s in business or from school - thrusting yourself into the role of startup CEO is like tossing freezing cold water in your face every day. Jason Goldberg recently left as CEO of Jobster and he reflected on his experience in 12 Learnings From My First Turn As Startup CEO.

What’s certain is that Jason (and any other first-time startup CEO) walks away with a ton of lessons learned. Most of which are hard earned, regardless of whether the startup is a success or not.

Looking at Jason’s points, I wanted to add my own thoughts…

Setting Trends or Following Them?

“Try to ride some powerful existing waves vs. just creating new waves. Find some big and important industry trends and ride on top of them. It is very very hard to create your own industry trends. Be careful about getting out too far ahead of any wave.”

You don’t need to be a trailblazer to have a successful business. We see plenty of companies that are in fact mashups of other entities, or companies taking existing ideas & technology and applying them to a new niche market or business case. Take something that exists and improve it incrementally - especially from a financial perspective. Can you offer something for less? Can you save a company money?

Two additional comments on trends and leveraging them effectively:

1. When it comes to generating press for your company (particularly at launch) make sure you understand how your company fits into larger trends. As much as you’d like full profiles down exclusively about you, reporters will be more apt to work with you if you can provide a bigger story. How does your company fit into global trends? What’s the bigger picture?
2. There are plenty of trends (and “best practices”) in software development, UI and design. There’s no reason to re-invent the wheel. That doesn’t mean you should copy every trend there is like a hapless puppy, but if you can provide functionality and interfaces that are more commonly recognizable to your customers, they’ll thank you for it.

Are You a Technology Company? Is That a Good Thing?

“Technology companies are all about the product. Getting the product right is critical before aggressively going to market. We went to market too fast in Jobster’s early days. Ultimately your technology company will be judged based on how good your product is and how your target users take to it.”

Product-market fit is critical. You can’t succeed without it. But I’m not sure Jobster was (or is) a “technology company.” To me, a technology company is one that has hardcore tech behind the scenes - patent-pending stuff that requires years of R&D. As well, I think it’s OK to launch early but where you have to be careful is how aggressively you market early on. My understanding is that Jobster went out hard and spent quite heavily on sales & marketing … before the product could support it.

Jason alludes to this in one of his other points, “Don’t listen to outsiders who tell you to go faster and ramp sales and marketing. Instead, listen to your current customers and users. The best sign that you are truly ready to ramp the business is customer/user satisfaction. Understand customer/user satisfaction drivers and gaps before ramping sales and marketing.”

Perhaps the mistake for most startups is that they think of themselves as a technology company. That sounds cold. Distant. Most companies are people companies - because they’re selling products to people. If you get lost in technology, in features, in product development and nothing else … you’ll lift your head out of the sand one day and realize you have no customers, lousy customer support and a ton of functionality no one wants.

Further to that point, Jason says, “…the rapid iteration model (ship early, learn from usage, adjust) works well for consumer services but works not as well for B2B services. Consumers will let you learn with them over time. Paying business customers, however, have less patience for your learning on their dime.”

There’s no surprise there. If a company is paying for something they want it to work. All the time. But my experience has shown me that business customers can be patient and lenient if you provide exceptional support, remain humble and get things done quickly. Accomplishing those three things isn’t easy, but it’s doable. Customer support rules all. Provide honest, quick and personal customer support - and even business customers will stick with you.

Spend it Fast or Spend it Slow?

“The value of your company is directly related to your capital efficiency. Spend every dollar like it is equity. Preserve cash! Preserve cash! Preserve cash! Yes, you need to spend money to build a company and to make money, but every dollar misspent erodes your valuation.”

This is such an interesting point, and one for debate. I can see - having raised financing - how it becomes easier to spend money. It’s not really yours, right? That’s an extremely dangerous trap. Jason’s right on the money (no pun intended) with this point, when he says “Spend every dollar like it is equity.” It doesn’t matter where you got the money, once it’s in your bank account it belongs to you. And spending it should hurt just as much as spending any other money. Contrary to popular belief, even VCs don’t have money trees. And even if they did, they’re not sharing them…

What’s debatable in Jason’s point is his argument to preserve cash. Talk to enough startup CEOs and VCs, and you’ll get a variety of opinions on this. How slow is too slow? Does holding the cash stunt your business growth opportunities? When are you spending too quickly? How do you know? It’s far from a black & white issue.

But Are You Enjoying Yourself?

“Have fun. Everyone looks to the CEO everyday to set their own moods and expectations. Being CEO can be lonely — someone once said to me that CEO is the loneliest job in the world as there are days that your board hates you, your employees hate you, your customers hate you, and your family hates you — true. That’s why you need to make sure to have fun every step along the way. If you are having fun, people will see that and they will follow your energy.”

Many people might ignore Jason’s last point. Have fun? Whatever. Don’t be so mushy. But it’s critical. And given the intensity of most startup CEOs you can bet this isn’t always easy. A great startup CEO is nothing short of an Ultimate Fighting Champion + Robot + All-Star Goalie + Shakespeare … wrapped into one. The startup CEO needs guts, operational wizardry, responsibility and passion. The startup CEO is willing to carry the whole company on his shoulders, or drag it along with a chain if need be.

I haven’t found the CEO job to be lonely (yet!), but without a doubt it comes with many sacrifices. You know the sacrifices are coming - you’ll see less of your family, sleep less, eat poorly and possibly go gray … but at the end of the day, you know you wouldn’t trade it for the world. My guess is Jason feels the same way.