Strategy Who should be the CEO of a B2B software startup?
As the CEO of a B2B software startup I was pulled in a million directions. But understanding my key responsibilities as CEO was critical if I wanted to support my startup to massive growth.
So, when I came across a startup recently with three founders who believed they could all be CEO and make decisions democratically—I knew I was looking at a potential nightmare. Every decision would essentially be made by “committee”, a counterproductive technique for a startup which needs to be able to move fast and should not deliberate over every detail.
Additionally, all three founders brought skills from different backgrounds: one financial, one legal, and the third was a software developer.
In a startup it’s best that the responsibility for different decisions is given to appropriate individuals based on their skillsets. In a typical startup that might look like this:
- CEO (strategy/sales)
- CMO (marketing/operations)
- CTO (all things technical)
Software Developer in the role of CEO in a software company?
Some schools of thought say that a software developer can make a great CEO for a company where technology is key. There is an advantage to truly understanding technology if that’s where your competitive advantage is going to lie. An often-cited example is Bill Gates and Microsoft. But there are many others, especially with pure technology play companies such as Veeam with Ratmir Timashev and Andrei Baranov. While this is definitely a factor to consider, the software developer background will only get you so far and then you’ll need to draw on other skillsets to successfully fulfill your role as CEO.
What are the key responsibilities of a CEO in a B2B software startup?
The CEO’s responsibilities can be broken down into 4 main areas:
- Strategy—defining what business you are in, and what business you are not in. If a big customer wants your product to do XYZ, will you pivot the whole business and do that, or not? This is hard, especially as you grow and learn how to differentiate your startup from the competition.
- Key Players—the CEO must hire the key people into the company to get the job done. In the early days the CEO might be involved in all the hiring, but that won’t scale. Over time the CEO will be less involved in hiring at the lower levels but will still be fundamental in placing people into roles like CMO, CFO, VP of Sales, VP of Customer Success and so on. They need to define the vision for the company and place the right people to make it happen.
- Company Culture—your startup will have a personality which should provide a competitive advantage. This should be something that helps with your differentiation in the market, talent acquisition, interaction with customers and more. These traits are often things represented by the personality of the CEO. It is the CEO’s role to define culture and help it grow at your startup.
- Position in the Industry—the CEO must really understand the specific industry and your startup’s positioning. In the early days, this will usually result in your CEO being the best person to close big deals. They should be able to connect with customers at the business level and solve problems with passion and determination. They must focus on revenue for your startup because revenue is the growth engine.
Some folks will say that a CEO needs to be good at fundraising. But that depends a lot on whether you are raising money or bootstrapping (see Should you bootstrap a software startup business?). Even if you are fundraising, a CEO who drives the vision for the startup, builds the right team and understands the market will probably do well in front of investors.
How did you decide on who would fulfill the role of CEO for your B2B software startup? Do you agree with the key responsibilities outlined above?