Hiring a CEO for your first (and maybe last) time.

Some comment before reading:

- Ok, a true microstartup will go very long not needing to add any “top management layer”, but if all goes well you might get to the position when you start to think that you need one.
- I mention ‘incubator’ now and then in the text below. I know, this isn’t always a good move for a boot-strapping startup, so if you want you can ignore that, or simply replace with “my mom and dad”, “my credit card company”, “some good friends I’ve borrowed money from” or something equally bad.
- I’m writing ‘he’ in the text below. I started writing he/she and so on, but it made it less readable. ‘He’ is, still more common, but this is changing to the better.
- Brevity is a bliss, I agree. What you see below is the RAW version. The final award winning product will be much  much shorter. I promise.

Now to the topic of hiring CEOs.

“Last” in the above title could mean that you’ll go all the way to startup heaven (I didn’t write IPO, because that is not always the goal), or, that you go out of business in such a brute way that you never want to start one again, even less work for one.

Over the years I've met many archetypes of bad and worse CEOs: the invisible one, were the middle managers take over; the ex-management consultants who executes greatly but everything according to a library of cookbooks, with a startup company that didn't make into a very good soup. Describing these and the rest of us in the startup will be a section of itself in the blog. I think I will call it “the Startup Zoo”.

Too early, or “hiring a pilot still building the plane”

All the CEOs did their best, at least in the beginning, but many just didn't know how to deal with a startup and many were just far too early having nothing valuable to add. There was nothing to sell, or even to show to investors. It’s like hiring a pilot still building the plane. Don’t even bother getting a former air force pilot, that is just more money ticking away on the ground. Some had just lied about their abilities and experiences (more about this later in the text). Needless to say, it is as in any established company - with some crucial differences: Timing and Board.

- Didn't you meet any good CEO?
- Let's say I've met one good, and let them all think it was he.

Too quick, or “saving days by loosing months”

I mentioned above that some even managed to get the position lying about their credentials. How on earth is this possible? There is no excuse, but it happened. Probably it happens more often than you think. It was possible because of complete inexperience on the recruiting side and them trusting some ‘trustable’ persons that this is a good CEO.

- Still. This is stupidity. If you’re this stupid you deserved it, you’d go out of business later anyway.
- We were convinced it was a show stopper, not having a CEO – no new investments, no customers, no time to do development, … So, we did the safe thing – met the (one) candidate, talked to some references, believed them all, and trusted the ‘insurances’ from some close trustees. We were quite happy after we ‘completed’ the ‘recruitment’.

Many startups feel that they are in a hurry hiring a CEO. They’ve got convinced by their 'friends' and/or existing and incoming investors/incubator all telling them that they need a CEO to meet with investors, they need a CEO to be credible, a CEO is the key to success. But they are often wrong. Hiring a CEO under time pressure is a bad idea for any company, for a startup it can be the last thing they do. Remember boot-strapping and cash flow? Having hired a CEO that has nothing else to do than pushing the developers to ship a product that won't be ready for many more months is costly - both in time, money and stress-level. I’m not saying that the development should let go and ship-fix-fix rather then fix-fix-fix-die. But sometimes it is really too early adding a CEO.

So take a deep breath, and stay calm. There is a better way.

Clean the table; get a functional board in place

What to do if it isn’t time to hire a CEO at this point? Focus on making your board better. My guess is that if you’re still early, the board consists of someone from the family/incubator (could be good, sometimes not) and the head founder. This is not the board you need to balance a strong CEO, or to find your way forward. Fix this first. Still there’s plenty of daily practical work – salaries, rent, … Hire someone to do this if you can’t do it yourself. But that is not bootstrapping.

Make sure your recruitment makes good to your company, or don’t do it.

Hiring a CEO is a very delicate and important recruitment - not something you probably have any experience of from earlier work. So, how do you go about finding your CEO? If under stress, and with no-one (make sure this isn’t true) to ask - you take the advice you have. E.g. you trust your incubator manager, he should know after all these years. Be sure to check the incubator's track record - ask some of the other startups they have handled. Friends giving 'advice', ‘advice’ just to keep a conversation, as a game. But this is not a game. Hiring the wrong CEO could be the end of everything.

Don’t put the decisions on others – it is you hiring this CEO

Don't put the decisions on others, it is you who do the hiring. Once you realize this, and even if you zero experience, get to the work.

- I don't have the experience or time to do this!
- No and Yes, you do. What you don't have time with is hiring the wrong CEO. If you do that, you'll need very much more time, time that you maybe don't even have. The downside scenario is that the company stops developing for periods when you're busy solving issues created by the new mix of people. Eventually firing the CEO. Good luck finding a new one.
- So. Hiring, not only CEOs, is the single most important part of your startup life, next to cash flow. So, again, get to the work. Do it.
- Ok, ok. But how? I haven't got a clue!

Dig, dig, and dig some more

Once you start digging into it, you see that every person has a google-able history and people you can get first hands comments from. Not only the ones used as references in his CV. You gather this together, put the pieces together, and meet with the candidates (pluralis) one by one in a detailed planned recruiting meeting. Do some home work here - don't just have an unplanned meeting. A successful recruitment meeting will have many positive spinoffs. A correctly interviewed candidate leaves the meeting with a feeling that he has got the right questions and a chance to fully show hiss strengths and weaknesses - that the candidate company knows who he is and what he is able to, and the candidate knowing what is waiting if joining the company. So, even if the candidate doesn't fit the company, or the company the candidate - the candidate will be positive about your company, and maybe bring this further to others. Also, when the company grows there might be an opening to do business later on.

You can see the recruitment process as a very deep marketing meeting with a few selected persons.

Warning bells trying to tell you something important

More, now practical things:
You do your research, you meet, you get more references to check - and you give the candidate a good look into the company as well. Things to pay extra attention to:

Warning bells. We all have warning bells ringing now and then, sometimes constantly, but most often very quietly. Please, take time to listen to these. They are your best friends. And, please, let your partners know you're having them. Some call it gut-feeling. It is your smarter me trying to get through to you. He has a message: "Don't hire this guy". If you don't listen to the bell, tell your partners about it and they will probably tell you that they too hear some noise in the background. Yes. Let's think again....

What could it be that the better you have found, or thing it has found? This also applies to the candidate about you:

Glitches between the story told and facts. Chemistry. You don’t have to love the candidate, or he you, but you will be working very closely for (hopefully) some time. Gaps in the CV (that weren't fully explained). Questions asked by the candidate, especially the ones he didn't ask. Answers to your questions - how they were delivered and how.

Of course, this is an interview, so the candidate might be a little on his toes. But, they should perform well, we’re talking about CEOs here, they will be in the middle of the heat. They should also be able to make the meeting a nice one and to the point.

Did he show genuine interest in your company and what you do? If he was you should have gotten to the point where you yourself don't know the answer to his questions. You start to work together, and it works. "Only hire infected people". I wish this was always possible, but if you find them, be sure to perform a good recruitment meeting that either a) hires the person or b) makes sure he stays positive about you and your company. Maybe a future employee or customer? Maybe you have found one of the rare evangelists?

This was the v0.1 written on my way back from yet-another-eu-meeting, this time in Lyon. If I get some comments, I’ll might do a beta release.