Replacing The CEO

CEO Succession, early stage, founder, Revenue Growth, Scalability, startup, startup CEO, venture

The vast majority of early stage companies will companies replace the CEO in the first 2-3 years.

A person or group peers starts with an idea and turns a spark into a flame. Once that flame is s going they don’t want to let it die. They often conclude that a more seasoned, well connected, well rounded CEO will attract money, partners and revenues, taking the company to “The Next Level“.

All this will hopefully help the company grow in the right ways and produce cash flow. Cash allows small companies to fulfill growth and other objectives; cash generated organically helps do this without giving up ownership and control.

But t’s a bit more complicated. Introducing a new leader, whether internal or external, voluntarily or forced, s a delicate process. I’ve been the incoming CEO a few times, and found that acceptance happens quickly or usually not at all. Most startups have no experience doing this, are not prepared, and cause their company damage by not doing this correctly – they accidentally blow out the flame.

There are some basic guidelines that can help make the new CEO stick.

1. Choose the New CEO Very Carefully. This is where most startups make the wrong choice. They base their choice on the wrong criteria and/or a limited pool of candidates, or peer pressure, or using one of the investors, etc. Be methodical and objective here. Engage experts if possible.

2. Put The Egos Away – mMake sure everyone is on board and understands that the new CEO is the right answer, including the outgoing CEO. Outgoing CEOs who can’t let go are one of the top reasons early stage companies fail at this process.

3. No Sacred Cows – Allow the new CEO to make the changes he/she wants mmediately. This requires trust on the part of the extant management team but you must let them manage the whole puzzle, not just parts of it (see #1).

f these things are done correctly the succession process can actually be a great experience for all involved. If you would like to discuss further please contact me. @tomnora

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FINDING A CO-FOUNDER

early stage, founder, Revenue Growth, Scalability, startup, startup CEO

Over the past few weeks I’ve been casually looking for someone to work with, to develop and market a suite of mobile applications (iOS, Android) for the entertainment world. Describing this other person variously as a co-founder, partner, CTO, and collaborator, the focus has been on someone with the right combination of technical experience/excellence, mutual chemistry, plus the right timing and inclination in their lives to do this.

I’ve asked around, talked to friends and even put a little ad in craigslist in Los Angeles. Through all this there have been many responses, some very positive, and some pretty weird. I realized what I’m doing is inadvertently conducting a social experiment here. The explosion of mobile phones and mobile apps has created an almost visceral response when you mention mobile, or Droid, or especially iPhone, or iPad. Everyone wants to have a connection with it, whip out their smartphone, show you their aquarium screen saver. You either have one or wish you did. When I was a child, it was having the newest Schwinn bike, in a cool color. $37.95. Or the latest hot record album. You either had them or wished you did.

Now it’s another computer device that you can carry with you, is “always on”, and can do almost everything (and plays the latest hot album). Suddenly waiting in line somewhere you can instantly become productive if you want, or plat a game.

If you carry this one step further – actually being involved in developing and deploying mobile apps, it’s even more compelling. A higher level way to become part of the society and possibly make some money. The focus should be more on the functionality or enjoyment or how you’re improving the world, but it’s not – it’s more the idea of being part of this new baby-app world. The result is many apps and businesses that come and go quickly.

Over 300,000 iOS apps are deployed plus equal amounts of Android and others. Most are unused or have a short lifespan and very little revenue. It’s more of a hobby or personal challenge than a scalable business.

In looking for a co-founder, I’m searching for the combination that will allow us to build a long term growth company, scalable and adaptable over several years. I want to create long term jobs and products people will use. That’s not the sentiment of most CTO-types I talk to. They want Cash Now, to be paid for their work by the hour/project. The economy has changed the focus to short term survival, not entrepreneurship (except in Silicon Valley). People believe they can learn app dev in 3-6 months and then create their own long term income, and they’re right on the mark in many cases. Aside from revenue generation, mobile apps are needed for basic business existence in most areas. Almost all companies are retooling their public image while also increasing their ability to market real-time. The mobile phone/pad is becoming central to our lives, more than our computer in many cases.

I’m going to keep looking for a cofounder. I’ve been lucky enough to create a few new products in this world that stick, which creates the backbone of scalability,  I’m having more fun in this new domains than ever before. If you know anyone, send them my way. @tomnora @cowlow