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GigOptix, Inc. Message Board

  • aggies Mar 20, 2013 11:35 AM Flag

    Why does the good stuff ....

    have to come based on a question from the audience?

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    • Here are some signs that a startup needs a new CEO.

      The founder is unsuccessful raising money. The market is a pretty good barometer. For most early stage investments the team is a major factor.

      See what other startup mentors have to say about hiring a CEO.
      The founder has a difficult time attracting great talent. Or even not-so-great talent. Again, this is the market working its magic.

      The business is growing out of control. Or in too many different directions. A good CEO should be able to focus a startup on what is important.

      Often a founder is an expert in one area and seldom good as a general manager. When the needs of the company extend far beyond the talent of the founder, it is time to get help. For example, it is rare for a technical founder to be good at customer acquisition or marketing.

      In other words, there are times when the business itself naturally outgrows the founder.

      • 1 Reply to mazlat10
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        GUEST MENTOR Mike Binko, CEO of Kloudtrack: Sure, the thought of giving up the reins of a growing startup can be daunting, and even a little deflating for many startup founders, but the simple fact is that strong early stage companies often inflect — a term commonly used in VC circles to signify the period in a startup’s lifespan when it is poised for rapid growth – when professional management is consulted and/or recruited. The challenge is timing.

        While this ball often starts rolling when founders surround themselves with trusted advisers, boards and influencers, most high-growth startups do not typically hit hyper-drive until the founder(s) dedicates some time to meaningful introspection and figures out what he or she doesn’t know.

        See what other startup mentors have to say about hiring a CEO.
        Knowing What You Don’t Know. Knowing what you don’t know as an entrepreneur can often be an exercise in reverse-psychology, particularly for personalities that may be ego-driven or out to prove something. Being honest during this soul-searching phase is absolutely critical.

        Certainly, most startup founders realize they will need to roll up their sleeves and “build it—prove it” on their own, but the best founders also realize early what they don’t know and then quickly surround themselves with people who do.

        The ability to “know what you don’t know” is perhaps the most underrated trait of successful startup founders. This begs the question: How — and when — does a founder pass the baton?

        When and How. Many factors compound the challenge of knowing exactly when and how to bring on a professional management team and specifically a non-founding chief executive. The most obvious is life-cycle stage.

        Companies being birthed out of the idea/concept stage are not likely to benefit from recruiting a non-founder CEO. No matter whether the special sauce is intellectual property, technology or methodology, the value proposition at this nascent stage is still typically embodied in and best represented by the founder(s).

        Occasionally, the stage when first revenue is being produced can be seen as an indicator that a startup might be ready for professional management. However, other factors such as go-to-market approach, capital needs and research/development road-mapping might still dictate that a founder remain in the driver’s seat.

        Moving Targets. In my experience — having been a startup founder, active angel/VC investor, and having recruited startup CEOs — circumstances have indicated that the nexus point where management change and inflection meet is always a moving target. Personal history also shows that founder-to-CEO transition often results in success when the startup has proven the model to the point where outside investors are taking interest and discussions of deal term-sheets are underway.

        No matter whether investors at this growth stage are follow-on angels or institutional VCs, their needs from an operational awareness and structured progress perspective are often incongruent with the comfort zone of many founders. Investor needs can often tip the balance to help a founding entrepreneur realize that aligning with a professional CEO might be a wise and strategic move to maximize long-term value for all involved parties.

    • What was said aggs haven't had time to listen?

    • Please explain what you mean

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