From a venture investor’s diary #6: 3 things on founder-CEO excellence

By ssyc1
July 3, 2025
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A most important topic: I often ask young technology company CEOs (typically founder-CEOs) what is his or her role.

There are 3 almost-indispensable things that CEOs have to do and they tend to be the most important things that drive value or determine success of the company (to avoid any mis-interpretation, I will make clear there are other key success factors that are less directly related to what the CEO expends his or her time and efforts on).

#1. Set direction (and therefore priorities which also means resource and capital allocation).
#2. Make the key hires in the team (at the right time).
#3. Evangelise / represent the company / be the company’s “face”.

How is the short list of key tasks – hence key drivers of excellence and success – of the young-company CEO different from that of the big-name, large-corporate, well-established-company CEO?

I always say my job is to boil down and adapt what I’ve known from “both ends of town” in both the “large company” and “small company” worlds to the most bare-bone basics, in an effort to make things very simple and “user-friendly” for the young CEO (who always has too much to do and is working with much uncertainties and, with luck, at high velocities also), hence my “list-of-3” above (“3 key points” is a useful metric for “what is important” or “what are the priorities”!)

The latest on CEO Excellence from the McKinsey tells me that about 40% of new CEOs (even at large corporates) fail within 18 months, but an interesting and actionable insight is that “excellent CEOs treated the soft stuff like the hard stuff”.

The specifics are captured in “the 6 mindsets that distinguish the best leaders from the rest”, which I’ve calling “M1” to “M6”:

M.1. Set a bold direction for the company by reframing the game, redefining success, and making big moves.

M.2. When aligning the organization, treat the “soft stuff”—culture, talent, and organization design—like you would the “hard stuff,” as elements that can be measured and managed.

M.3. Solve for team psychology by hiring individuals who will constitute a great team.

M.4. Engage the board by building a foundation of trust with your directors and investing in their knowledge and capabilities.

M.5. When setting the organization’s direction, start with “why.” Why does the company exist? What is its purpose in the world?

M.6. Manage your own effectiveness, spending time and energy on what only a CEO can do.

I find it interesting that M.1. and M.2 combine to speak to #1 in my list-of-3, while M.3. and M.4. together reflects #2 in my list-of-3 (I tell founder-CEOs to think of the Board as your “brains trust”-style resource, and to learn about the strengths of his or her investors and Directors so as to use this resource well [or avoid the advice as the case may be]), and it may also be worth highlighting that when you are responsible for bringing together the right team for what you are trying to achieve, you are inevitably also shaping the culture. And when you consider that “culture eats strategy for breakfast”, this tells you that my #1 and #2 are highly related.

M.5, helpfully, is a little like #3 in my list-of-3 except that (x) a large, well-established company CEO has less need to be “out there” to get known and build the brand, and (y) the young company “face” tend to be more product-driven than the large company’s (i.e. some founder-CEOs are “out there” to be the face of the product [and either help hone the product-market fit or highlight the exciting fit -which in the end is the “why” of the company’s existence!]). Underpinning my list of 3 is a CEO leadership effectiveness framework we use where self-awareness is top of the most major ingredients we look for (painful lessons serve to stress-test and refine too).

Summing it up: entrepreneurial leadership is a little different from business leadership in a large corporate or organisational setting, though some fundamental qualities are nonetheless very much shared.