Lessons from an Expert: What New CEOs Must Know before Launching a Tech CompanyPhoto by Steve Jennings/Getty Business Features Tech CEOs
I’ve been dabbling in technology since I was a boy, having broken my mother’s computer and not realizing I had basically wiped out the autoexec.bat file. I ended up having to learn how to write code, going from that to building PCs, to building a robot, to trading currency at Deutsche Bank. I’ve experienced a “crossing of the chasm” in every respect, be it personally, with team delivery or with leading a team.
The hardest part of the transition to becoming a CEO is making decisions that impact you, but coincidentally benefit the company as a whole. This follows the second, and more difficult task: the art of saying “no,” whether it’s to yourself, or for the frill and fancy of an extra feature in your app.
I’ve gained a tremendous amount of insight through the trials and tribulations of the last 20 odd years, and my teams (really my family as we spend so much time together) have taught me the most valuable lessons. I am the Co-Founder & CEO leading two multi-cultural, international companies—one in consumer and one in the business space—that have an aggregate revenue of $60 million to date.
Getting here was definitely not easy, and there are a few things I wish I’d known while starting up.
Employees Are Not a SaaS App, They Are Humans and Need TLC
Your team is not a SaaS platform, people cannot just be switched on and off—similarly, you cannot hire and fire just as you would add a seat to your CRM service. The offline water-cooler conversation is critical. This means that getting inside your team through a fortnightly head check is almost as important, if not more so, than making the right product decision or choosing the right investor.
You often hear about CEOs who are adored and how magically, employees love working for them. While this is awesome, it is also rare. It’s not critical to be loved as much as it is for your team to know that you will give everyone a fair opportunity and an equal chance. I remember I walked in one morning and saw one of our lead developers frustrated. I found out he was having a tough time convincing his girlfriend’s dad to let her marry him—something you’d think is outside the purview of your role as a CEO. So he told me his story, and how she meant the world to him, but her father (this was in India), didn’t understand the tech industry. The father was alarmed that he didn’t own a home, so he was skeptical. We eventually helped the employee finance his house, and put him on his way to getting married. From that day on, he pushed every boundary and excelled in our company.
As much as being a serious, stern and direct CEO may sound like a part of the job description, it’s not. Authenticity is a great way to break down barriers between yourself and employees, and help build trust, workplace morale and transparency. This is where balance comes in. You can’t be your employee’s best friend, but working to establish rapport, trust and overall comfortability is a great way to empower employees.
Don’t Build Everything and Its Brother, Focus on What Creates Most Value
“How much money should I raise” is one of those perennial things that CEO’s always think about. What we never realize is how inextricably linked this is to “focus.”
Having sat with my cousins a few years ago, I realized that we often look at how much to raise in the wrong way. In the last few years, a recurrent piece of advice I was told was “raise as much as you can when the opportunity presents itself.” While this seemed rational, it is actually the antithesis of what young-first-time-startups should do.
Those who have seen the “movie before” can afford to raise more as they have the internal discipline to stay focused.
Having spent time over the last couple of months thinking about this, and having read Eric Ries’ “The Lean Startup,” I think the biggest mistake any startup can make, especially first time entrepreneurs is, take too much capital. Inadvertently you lose focus…etc…
I have a simple example—you have three things you can do; each will cost you $1. If you only have $1, you will be so much more focused and you will only have ONE priority. Now imagine you have $3; what will you do—3x the one thing? Probably not…you will actually split your focus/attention and rationalize it by saying that you NEED to do this or that it diversifies risk?. Sometimes this is important, but having a real constraint means you’ll be that much wiser and a lot less “laissez-faire” about opportunity cost.
Also—the less you need to raise, the less you focus on building a business for venture capitalists, and you spend more time building a business and solving real problems. Intrinsically, this will attract investors, let you retain vision and control, and increase the probability of success.
Having less money also implies having a smaller team, which means that communication, planning and execution is just folks sitting around a table—and no lofty offices. This ensures that no money is wasted on things that ultimately are only needed to manage a larger team.
Smaller teams also mean that you have a true opportunity to grow culture and build a shared vision—which is critical if you want the team to be firing on all cylinders. If you add too many people too quickly,?you run the risk of dilution in core values, no matter how much you instrument culture. And as we know,??it’s not the idea, but the execution that defines success;??and execution is a people/shared vision problem?—?period.
Focus on what creates the most value for the company, its employees, and always remain balanced.
I Know You Want It to Be Perfect—But You Are Not the Film Producer
No one will notice the one pixel red dot at the bottom of their television set. As anecdotes go, I was super frustrated during one of our wedding functions when my uncle stopped me and said “why are you getting stressed son?” “No one is going to notice the detail that you will notice, because they don’t have the blueprint or the vision in their mind.” This got me thinking. The product manager’s dilemma or the CEO’s dilemma is always about building perfection because it’s an extension of you. However, this goes right against the fail fast process.
There’s simply no need to overwork yourself. If anyone ever failed to mention it before your first gig as a CEO, you’ll work tons of long days, that eventually turn into nights, that potentially turn into all-nighters. Remember why you got into the tech industry, so channel your inner passion and drive for the work, and recognize there’s more to life than work. It’s through experience that you will also see how your product or service impacts people, and how they react to it.
As CEOs working in the tech industry, we have the tendency to be workaholics, but for all of the long hours, there’s always a great reward at the end of the tunnel. I love seeing projects completed, another satisfied user, and a smile on each employee’s face at the end of the day.
Take these tips and run with them, use them and reference them, as these are the things I wish I’d known when starting off in the tech industry as a new CEO.
Sachin Dev Duggal is Co-Founder and CEO of SD Squared and Shoto. Duggal also heads up operations at Shoto, a photo swapping app that uses machine learning to identify the faces of anyone who appears in your photos.