The best way to prepare for a role is to follow a career path there. Are you looking to be a CMO? Start in marketing and work your way up. Are you hoping to lead a legal division? You’ll spend time as an in-house counsel before then.
But there’s no map to guide you to becoming a startup founder. Most startups are born from an idea, not a trajectory; case in point, before LinkSquares, I was in revenue operations, and before that, I was a computer engineer. So much goes into running a company beyond knowing the product and the market; more often than not, there’s no one to teach it.
As a founder, I've had to be an out-of-the-box expert from day one in a dozen areas I've never worked in my life. If you have a resume like mine and are considering starting a business, this one's for you. Here are five essential skills I didn't realize I would need to be a successful CEO.
Before LinkSquares, I hadn’t had much experience negotiating contracts in my life, but since then, I've done thousands of them. Unless you've worked on a deal desk before, there's a good chance this will be new territory, but when your company is small, someone has to build the muscle for negotiating contracts.
If you're fortunate enough to have an expert on staff, be it an outside counsel or someone else, you need them alongside you at all times to negotiate contacts because the fact is, if you don't close, you don't eat. At a certain point, after you've grown enough, you can pass off the responsibility. Until then, whether it's term sheets, fundraising documents, NDAs, or offer letters, you need to negotiate effectively.
The Ability to Forecast the Future
As a CEO, your entire life depends on being able to forecast your expenses, burn rate, and how much revenue you can generate. Before raising our series A, we decided to upgrade our forecasting model. We put 100 hours into building a model to forecast headcount, every single employee and operational cost, revenue generation, marketing expenses, and accounts receivable/payable two years in advance. It was a grueling process, but after completing a $15 million series A, investors pointed to our forecasting as a key factor in their trust in us.
Our model starts with revenue projection for the next year, breaking down new and existing separately. Our departments think through how they can support the revenue goals via sales, engineering, marketing, etc., and then project needed expenses. From there, we roll up a summary and pressure test it through unit economics and SaaS Metrics, leaning on published benchmarks as our guardrails.
Forecasting is one of the most difficult skills to learn. Unless you're formerly a CFO or FP&A guru, don’t try to fake this with VCs. Hire a fractional part-time CFO to help and put in the work. Regardless of where you stand today, investors are backing you for the potential to reach a large scale, and at that point, comprehensive multi-year forecasting won’t be optional.
No amount of preparation can truly prepare you for the discomfort of acting as human resources. It's never easy to lay someone off. Still, as a startup’s CEO, you will have to terminate employees with cause, which also means the delivery of difficult news along with prepping severance agreements that treat people fairly while protecting the company.
Likewise, you'll have to understand managing crises between employees. Conflict is inevitable when you're rapidly growing and bringing on new people. Even if you have a fledgling HR function in your company, conflict management ultimately falls on the leader. Approach conflicts carefully and always without bias. Investigate, collect the facts and remember that the entire company is watching how you handle this.
I advise hiring a people expert as soon as you have the money. Humans can be tricky to deal with, and you need a seasoned pro who understands how to document and respond to employee behavior and performance accordingly. Without proper training, managing employee issues is a minefield that can lead to alienation, mistrust, and even company collapse.
Closing Great Candidates
Once you're in the driver's seat, you learn that in order to bring in top talent, you need to be a great closer. Successfully recruiting strong candidates is a challenge, and it's highly competitive. You need to hustle to not only find these people but sell them on why they should work for you. Sometimes that means getting on a 20-minute phone call, building an instant relationship, and securing a commitment before you hang up. Success requires selling the vision, the opportunity, the culture, and the future as to what the role could become.
Closing excellent candidates is a very different skill than interviewing. You know you want this person on your team, so it's your job to ensure they commit to you. It’s still an interview, but you’re on the hot seat, and the clock is ticking.
Governing a Large Workforce
As the chief executive, every decision you make impacts your direct reports and your team at large. The implications only grow as your team does, so it's vital to think through each decision carefully and consider the repercussions.
When the time came to consider our future, much of our revenue team requested a return to the office thanks to the challenges of working from home in a role that can require up to 8 hours a day on calls. With our revenue workforce mostly local, it made sense for us. But many other departments are not as Boston-centric and don’t have the same obstacles as the revenue team.
After extensive conversations and employee surveys, we decided to allow our department leaders to make their own decisions about how work would function for their teams, trusting that a closer pulse would create a better result. By taking a less prescriptive approach, we expanded our hiring for engineer/product roles across 20 states while granting teams that require access to a workspace the ability to make their own decisions.
This experience reaffirmed my belief that CEOs cannot be dictators as companies scale. When the time comes to hire en masse, candidates who feel they have a voice will be happy to join and even happier to stay.
Becoming a CEO is the educational journey of a lifetime. You'll learn and grow with every challenge you face and become a better leader for it. Still, there is no replacement for having your dream team working alongside you. As your company gains momentum and resources, the best thing you can do is hire the best people, get out of the way, and let them work.
Vishal Sunak is the co-founder and CEO of LinkSquares, the company behind the fastest-growing AI-powered contracting platform for legal teams. Named among the 2020 Gartner Cool Vendors for Contract Lifecycle Management and Advanced Contract Analytics, LinkSquares is used by more than 600 legal teams at mid-to-large companies, including brands such as Drift, TGI Fridays, and Wayfair, to move their businesses forward faster.
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