Letters to a Startup CEO

There are no classes in life for beginners; right away you are always asked to deal with what is most difficult. — Rainer Maria Rilke

In 1929 a collection of ten letters was published under the title “Letters to a Young Poet”, written by Austrian poet Rainer Maria Rilke to Franz Xaver Kappus, a 19-year-old officer cadet. The young officer had written Rilke a letter asking for guidance and they corresponded — the two never met in person. In this piece are “double-quoted” extracts from Rilke’s letters.

An American invention

When the great business thinker Peter Drucker wrote that the “CEO” title was “an American invention”, he was referring to this label in the organizational charts of large corporations. What’s odd about this title in startups is that nascent ventures tend to loathe formality, the startup is not a small version of a large company, it is fundamentally different.

Nascent ventures, like children, tend to loathe formality.

In fact the startup is more like a toddler or school-age child, what it does productively is learn about the world (the market, customers, etc.) by experimenting, testing boundaries, exploring. What does a “Chief Executive Officer” have to do with such an animal?

Startups are, after all, a very humble beginning.

The titles that really matter in this phase of ‘life’ are: mother, father or — following our analogy — founder. You would do well to adorn yourself with these labels and be better off for it, until such a time as formality has its proper place in the venture.

The power of questions

When running a startup you often feel pressure to come up with answers. Remember that what’s often more valuable are the right questions.

One of the most common unproductive quests for answers in young ventures is the “3–5 year business plan”. Imagine planning across multiple years for an infant or toddler? In reality the productive time horizon is days and weeks!

The more valuable planning exercise is to ask simple questions about the business, for example: if we raise capital, what milestones will we prioritize? how will achieving these milestones allow us to progress to the next stage?

What are the key bets the early-stage business is making and what questions along the way reveal if these were the correct paths to take?

It’s easy to get caught up in everyone’s search for answers and become frustrated. You may have come from a strong academic background where ‘having the answers’ was the key to success. In this role you’ll need to loosen your grip on these tendencies.

A lonely job

No role is more lonely than that of the ‘CEO’. Ultimately there will be things that you cannot discuss openly with your team or your investors, certain matters that you must deliberate on by yourself.

The founder benefits from trusted co-founders and quality investors who are business partners. The non-founder CEO benefits from trusted advisors, however this is not how most advisors are brought into the equation. Most advisors are experienced operators in the business who try to provide ‘domain expertise’ and are “eye candy” on the web site.

Most advisors are company website eye-candy.

This nearly always amounts to very little value over time as they are not kept up to date on the business and therefore do not understand it.

What the CEO needs in an advisor, (one is often sufficient) is someone who is an observer on the Board (if one is in place) and/or is updated on the business on a regular basis. This type of person, when trustworthy and a good listener, is very valuable and an antidote to the loneliness of this role.

Of course a trusted co-founder is of great value in this sense, a ‘co-parent’, some notable investors believe this is a key to success.

A very different role

What you will notice about this ‘CEO’ role is it’s not a ‘promotion’ but rather a fundamentally different role. As professionals rise up the company ranks within a specific discipline: Sales, Marketing, Engineering, there are levels of management within that function.

But the top executive is a fundamentally different position. The experienced sales executive who takes on a CEO role can no longer rely solely on his or her expertise in sales, they must be responsible for the overall business.

What helped you rise in management roles is no longer going to necessarily set you up for success in running the company, in fact it may hold you back.

What felt like a promotion may actually feel more like an apprenticeship in an entirely new position.

What worked and achieved excellence within a functional role may not be broadly applicable to other functions.

What you choose deliberately not to do

Because resources are scarce — a startup is measured more by what it chooses not to prioritize.

Bewilderment is a thing, particularly in a startup. A key part of your role is to prioritize what is important and not, most things will fall in the latter category.

The Silicon Valley VC firm DFJ once famously asserted “we can invest $5 Million in a startup or $15M in the exact same startup and we’ll learn far more from the smaller investment”. Resources are very scarce and this limitation forces difficult prioritization and more careful, deliberate learning.

Saying no becomes an art form.

Persistence and Determination

This is so cliché of course, the importance of determination in startups.

In running your business you need to gauge the degree of persistence in a great many things within the venture. If acquiring the next customer is approached from the “what makes this easy” perspective, you may be missing the mark, at the same time there are situations where impediments are overwhelming and an alternative path is needed.

Some things are never going to be easy.

Again if you are able to prioritize resources carefully, and have patience, some difficult hurdles will be crossed and the business will get to a higher plane of execution. It’s likely that your competitors may have the same challenges and this is important to understand.

Much has been said also about passion and dedication in entrepreneurship. Here again Rilke offers some serious counsel.

translated from German: (this is also an interesting tattoo)

The ultimate journey is your own

After many startups and decades of entrepreneurial work, I realized that the ultimate journey in these ambitious roles was an internal one. A journey of discovering your own abilities and range of motion.

Ultimately this is an internal journey.

You will make a lot of mistakes, you will learn a lot. You will face challenges that you have not prepared for, some will make you fall, others will teach you foundational lessons.

An entrepreneur who I had invested in, whose company I had served as a Director for over several years recently asked me about my goals. My response was simply “for me this is about pursuing bold journeys with people I trust”.

In the beginning it feels like entrepreneurial ambitions revolve around titles, money, notoriety, but in the end it must be about something else.

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Also worth a read:

If this article resonated with you, we’d also recommend that you read 6 Truths Startup Founders Must Know Before Starting a Business by serial entrepreneur Dzenan Skulj in which he lays out six crucial “truths” that entrepreneurs should understand BEFORE they decide to commit to starting a business.