A while back, one of my mentors drew a mental picture for me as to why most first-time or prospective entrepreneurs want to be CEOs and yet *most* serial entrepreneurs who have been startup CEOs do NOT want the job again. I have since taken that mental picture, sketched it out, and used it in various talks. Never mind the spartan drawings (I never claimed to be artistic!), but I would welcome feedback/comments on the general principles.
First, we start with how most people view the role of the CEO. Generally, CEOs are perceived to be the senior decision-makers in an organization. They usually sit at the very top of most org charts, with everyone else (senior managers and staff) reporting up to him:
However, as most folks know, the CEO also reports UP to a Board of Directors, who in turn has a fiduciary duty to the company's shareholders and investors. Any entrepreneur who has raised money for a startup venture knows all too well that the burden imposed by serving outside shareholders and dealing with Board oversight can be quite imposing. The CEO splits most of his time between managing the company and pleasing his Board and investors.
Of course, that is not the only burden on the CEO. After all, a for profit business must acquire and service paying customers, which usually requires a new venture to create relationships with various partners. Again, in an early stage business, the CEO usually spearheads these efforts and regardless must ultimately be accountable to his customers and partners. At this point, you can probably see where this is all leading, as the burden on the CEO becomes greater and greater.
Finally, the CEO must deal with two other groups: his advisors (both professional advisors and more informal Advisory Board); and the general public. On the latter, the CEO is almost always--but especially in a startup--the public face of the company. As such, he must be vigilant to promote the venture during good times and to protect it during bad.
What does all of this add up to? Well, once a new CEO gets past the initial perception of power, fame, and glamor that seems to come with the official-sounding title, "Chief Executive Officer," he begins to feel a bit like he's caught in the cross-hairs of a sniper's rifle.
I realize that being CEO isn't ALL bad. However, it certainly is not for everyone, and it is not, as they say, all it's cracked up to be. I'll end this with one of my favorite stories that illustrates my point:
I have a good friend who is a very successful serial entrepreneur. A few years ago, he joined up with four friends--who were also very successful serial entrepreneurs--for the purpose of starting a new venture. They had all raised money from investors and returned handsomely on their investments. They had all been CEOs, but had each taken a different career path to get there (my friend had a background in finance, and the others each had experience in sales, operations, marketing, and technology, respectively). They figured that together they had to be the absolute best startup management team a VC had ever laid eyes on. While I certainly agreed with that assessment, I had to ask the obvious question, "With so many seasoned startup CEOs on your team, how did you decide who would get to be CEO of your new venture?" He laughed and said that none of them wanted the job, so they had to draw straws. The loser became CEO.
And on that note ... I'd welcome any thoughts, comments, feedback, or--even better--personal war stories!