I agree with venture capitalist Michael Greeley of Flybridge Capital Partners who recently stated that building companies demands great passion, vision and intelligence but “it also helps to have done it before.” He goes on to say that what the marketplace really needs are “senior successful serial entrepreneurs” to serve on the next generation of entrepreneurs’ boards, to open up their rolodexes, and to share what worked and what didn’t work. He ends by noting that, “such mentorship is difficult to find.”
I would like to build on that suggestion; rather than having these serial entrepreneurs simply serve on boards, I suggest that in some cases they should actually serve as the startup’s interim CEO while the company is getting off the ground.
Every startup has a myriad of details and actions that need to be done. Rather than having a board member who simply advises, “You need to do this; and you need to do that,” in many cases the startup would be better served by a hands-on CEO who rolls up their sleeves and actually does “this and that.”
Once the startup is off the ground, say in 3 to 15 months, then the interim CEO can “morph” into that board position that Greeley suggests.
I base my recommendation on having been the first businessperson to join five different startups. And I base it on having completed ten interim CEO / COO assignments during the last decade, some at startups and some at turn arounds. In half the cases the founder asked me in, while in the others it was the investor that initiated the assignment. Most have nice exits, but that’s not always the case.
Each engagement generally lasts 3 – 12 months. And each has been a hands-on, operational role, not a consulting / advising role.
I’ve written a handful of short blog posts on interim management, answering questions like, “When does it make sense? What’s a typical engagement like? What do you do the first day; the first week? What does it take to be a good interim manager?
People who know me say that fifth or sixth post down – where I tell how the first thing I did at one turn around was to clean the kitchen! – says a lot about who I am.
If you’re forming a startup, consider finding one of Greeley’s “senior successful serial entrepreneurs” to join your board; then see if you can convince them to be your interim CEO / COO until your startup has, well, started up.
Change Agent 
2 November 2009 at 7:33 PM |
Interesting post. What do you think are the main reasons that doesn’t happen more often? Is it reluctance by the mentor to take that commanding a role or the less experienced afraid of giving up control?
2 November 2009 at 7:44 PM |
Jason, I think a third reason; Having an interim is not considered because there is a shortage of people to fill the roles because so few people HONESTLY want to do interim roles. I fell into my first interim assignment at Eink ( http://bit.ly/GAl1t ) and I’ve been doing them — and enjoying them — ever since. They are extremely rewarding. Also, some founders express concern when someone wants to join their company on an interim basis, thinking the interim person is not committed. That’s not proved to be a problem either.
3 November 2009 at 9:38 AM |
Jason, I’ve heard from one technical founder who answered your question such:
“I think another explanation is that so many “permenent” CEOs are looking for the big exit and being interim feels like it’s undervaluing their contributions (which are probably over-estimated by the CEO). Perhaps that’s the first sign of a bad fit — if the CEO isn’t willing to nurture the company and *win* the job then it won’t work out long term.
“I think what would really help entrepreneurs and startups is the venture industry embracing the idea of having different “lineups” of skills based on where the company is in its life as well as what kind of job they have in front of them. [Aside from Des: This is yet another reason to have interim CEOs; The only way to have different folks at different stages of the company is to be able to swap people in and out. Hence, interim.]
“For instance, my company should’ve had a “CTO+COO” combo from Day 1. We would’ve transitioned into a bizdev/sales-driven organization (crossed the chasm) years earlier.”
I concur.
11 November 2009 at 9:57 PM |
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