It’s common. You and a couple of friends start a company. Your friends regarded you as a peer, and now you’re the CEO. But there’s one tiny problem: Your friends/co-founders see you as a peer, not the CEO.
In this video, I’ll give you my tips for how to overcome this challenge. Plus, stick around till the end of the video for a free checklist that will help you as a first time startup CEO.
The video is called, How Do You Go From Peer To CEO? I hope you like it.
Read The Video Transcript Below:
It's a common problem. You and a few of your friends, or maybe you and a buddy, you start a company together and you go into it with this thought process that you guys are gonna make all the decisions together, and it's going to be great. And it's going to be so much fun and then reality hits.
And the reality is is that there can't be two leaders. There can't be two CEOs. There can't be three CEOs. There's just you, the CEO. But the problem is you guys have been buddies. So this video is all about how do you go from being a peer to being the CEO,. Plus stick around till the end of the video, because I'm going to give you a free checklist to help you with being the CEO and starting your company as well.
Hi, I'm Brett Fox and I've built several companies from nothing to over $100 million a year in revenue. And in today's video, as I said, we're going to talk about how you go from being a peer to being the CEO. So let's go, let's get started.
So let's start with the hardest part of the challenge of going from being a peer to being a CEO. And that's that you're no longer friends anymore. Now you may be friends off of work, but the reality is that during the time that you're working together, you're the CEO, you're the leader. And that means things have changed forever.
Whether your peers or your ex peers recognize it or not, you recognize it that you're the CEO, you're the leader. And that means there are some realities.
The first reality is you can't share everything anymore with your peers. You can't, there's too much risk. There are too many challenges or too many issues that can come from it.
You just can't do it anymore. So that means you can't share your deepest fears, your deepest challenges with your founders, with your peers, any more. It just doesn't work that way anymore.
The second issue is you're no longer one of the gang anymore. You're the CEO again, whether your peers or your ex peers recognize it or not, you're the CEO, you're the leader of the company.
That means you're essentially, I don't want to say above everybody else because you're not, but you are different than everybody else. There's a different thing. Nothing can prepare you for this. I can just tell you from experience that it's real and this will lead to the next reality.
The next reality is you're no longer going to make every decision together as a team group. That's really because it's very likely if your experience is similar to mine, I will share my experience with you in just a second, that some of your co-founders may believe that they are entitled to make decisions with you. And that's just not the way it works.
I had this problem with two of my co-founders. They had as much experience as me, maybe even more experience than I did. And they thought for whatever reason, that we should have an office of the president and what did they do? They waited until we were about to close our funding before they threw this one on me. And they said, Hey, Brett, we may not join the company unless you agree that we should form an office of the president. Isn't that nice?
I really didn't think so, but that's what they did. So here we are and they threatened, you know, that they may walk out and that would kill our fundraising ability if they did it. No matter how hard it is, no matter how tough it is, you have to say no, which is what I did.
I asked the simple question of my co-founders. I asked them, have you ever seen a company succeed with this type of alignment before? Have you? And the answer was no, they hadn't. That shut them up. And that ended it.
So whatever it is, whatever the pressure is on you, you have to resist it. You are the leader. That means you're different.
That brings me to my next reality that some of your co-founders may never accept the fact that you're the leader. And that is very uncomfortable. It's, to me, one of the saddest things about being a CEO is that there are going to be some people out there that for whatever the reasons are, they're just not going to accept it. And those people will inevitably leave the company. That's what is likely to happen either by their own doing they'll quit or you'll let them go.
In my particular case, those two co-founders within a year of them pulling that deal on me at the last second. One of them, I had to fire, and the other one quit before I fired him. That's what happens in these situations many, many times either they accept it or they don't.
But that doesn't mean you shouldn't go forward, because if you truly believe in your mission, if you're truly fanatical about what you're doing and to be a CEO of a startup, you always have to be fanatical. So if you truly believe, if you're truly fanatical, then you understand, you know what it sucks. And it truly does suck. But some of these people may not be there for the long run. And that means they have to leave. I know that's uncomfortable. That's just the way it is.
Now, let's go to your mindset has CEO. Now that we've covered the really uncomfortable stuff of dealing with co-founders. So one of your mindsets is this. You are the CEO. Assume the position of being the CEO.
Now, what do I mean? Part of the challenge is there's a lot of indecision that we normally have when we assume a role for the first time. We don't know what should I do this? Should I be consulting these people? What should I do?
Well, assume the position. Act like the CEO. Be the CEO, make decisions like the CEO, because if you don't let me explain what will happen. There will be a vacuum that is set up, and by vacuum. I mean, there will be information missing. There'll be decisions that aren't made. And when there's a vacuum by definition, somebody fills the vacuum and who fills the vacuum?
Well, it could be your co-founders fill the vacuum. It could be other employees fill the vacuum. It could be investors fill the vacuum. None of that is good for the company.
That's why you need to assume the position as uncomfortable as it is. Now, here's the one thing you want to avoid. You want to avoid the, what I call, kill the company decisions. Now what's a kill the company decision. That's making this one bet that if you make this bet and you bet wrong, the company is over. Those are the ones you want to avoid at all costs.
Now, usually even though startups are in theory, like one bet things, they really aren't. If you do it right, you won't find yourself in this position. And the decisions that you're going to make, most of them are not going to be kill the company decisions.
This leads to my next point about what you should do. Remember this really good people want to be managed. They're expecting you to lead the people that aren't and the people that believe that they should be CEO and that they have an exalted status. They will eventually leave the company or they'll get religion and get onboard.
Don't worry about them. However, for the rest of the team, they're waiting for you. They're expecting you to lead. So lead them, guide them, tell them where the company is going.
Now, how do you do this? Will you do this through communication? There are few tools at your disposal. The first is have regular company meetings, regular meetings with the whole company, telling them what's going on. They want to know. They're interested. They need to know.
Now this leads to my next point. Be transparent with your team. Be open with your team as much information as you can share. And this will vary from culture to culture.
Share that information with your team. Don't be afraid to share bad information with your team. I've been surprised over and over again in my career. How by sharing bad information, I built trust with my team, and then when I really needed the team to come through and to step up, they stepped up. That's what I've seen over and over again.
Let me share with you. When we were raising money for our second round of funding, we had an investor that was just horrible to deal with. And they put us to the brink of disaster. They asked us to essentially shut down the company, right when we were about to get money. So we, I suggested because I'd done the planning before they brought this on me in a board meeting, and I happened to be prepared. And I said, you know what? Why don't we put everybody on minimum wage?
If we go to minimum wage, we get another six weeks of money for the company and we can play out the hand. We had several investors right about to give us term sheets. Our investors agreed.
Now the tough part was telling the company, hey, we're going to go to minimum wage. Who wants to hear that? It's not exactly a fun thing to hear, but because we had been transparent because we had told them the truth. When we told them we're going to minimum wage, we told them why, we told them we were asking them to sacrifice. It was one of my proudest moments being a CEO if not my proudest moment, being a CEO is I told them this. They asked me tons of really good questions for about an hour. I expected the meeting to end with them, walking out very quietly, back to their desks. Maybe leaving for the day because this was on a Friday afternoon.
We told them all of this. Instead, you know what they did, which blew my mind. They applauded. Who would have thought that they actually applauded what I was going to tell them that they were going to go to minimum wage. The reason why I believe they applauded was because we, as a management team, had been very honest with them. We'd been truthful. We'd been honest, we'd been transparent. So they believed us.
This is part of being a leader. Be transparent. It will pay off for you. Now, let me tell you about a free tool that have developed for you. This tool is a free start-up checklist. It has whole bunch of different points that you need to make sure that you've got covered. When you're starting your business. All you need to do. There's a link below this video. All you need to do is click this link and insurers. I've enjoyed speaking with you today. I'm firstname.lastname@example.org. Have a great, great day.
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