It's pretty common to get the impression—from Hollywood, from press coverage of startups, etc.—that only the most brazen startup CEOs keep their ventures afloat and headed towards billion dollar valuations.
Inside Silicon Valley, arrogance runs rampant and investors seem to reward ruthless behaviour with piles of cash. – Business Insider.
Maybe it’s not specifically what startup CEO's are getting wrong, perhaps it’s the massive load they’ve put on their shoulders, and the growing external pressures that can distort their perspective.
“There’s a lack of a market need for their product.”
CB insights analyzed 101 essays by startup founders to find out what attributed to their downfalls. The number one reason for failure, cited by 42% of polled startups, is the lack of a market need for their product.
- 29% said a lack of sufficient capital,
- 23% said the assembly of the wrong team for the project,
- 19% cited superior competition as top reasons for failure.
Do nice guys really finish last?
If entrepreneurial success hinges on a founder’s mastery of psychology, it stands to reason that a founder’s flawed ego is often the root cause of startup failure. – O’Reilly Media, Forbes Contributor
Why do brash and cocky startup CEO’s reign supreme? This sort of delusional arrogance has put a distorted lens over the startup community made popular by the Steve Jobs mentality that it’s “my way or the highway.” Even though these are perfect made-for-TV moments, successful businesses by and large don’t operate that way.
Paul Graham, who runs startup accelerator Y Combinator, had this to say about arrogance in startup founders:
In fact, based on what I've seen so far, the good people have the advantage over the jerks. Probably because to get really big, a company has to have a sense of mission, and the good people are more likely to have an authentic one, rather than just being motivated by money or power.
In order to build and transform a company, the contemporary startup CEO needs to be firing on all cylinders and wear a variety of hats. Here are the 6 most critical skillsets needed in order for a startup to take flight.
The 6-core skillsets for a startup CEO
A startup CEO needs to be a hybrid worker, that understands all points of their operations—from communication to sales to finance. These are the top 6 skills that are necessary in a startup CEO’s DNA to avoid being one of the 9/10-failed startup statistics.
- A clear vision
A clear vision is what will keep your team bought into the program, and has to be unique and competitive enough to differentiate itself on the marketplace. A wavering vision is like operating a ship without a compass, the vast market will sink it.
- Excellent management skills
This is one of the major red flags that arise from failed startups. Too many young, hotshot CEO’s think they’re God’s gift to innovation and are too narrow-minded, often because they have never undergone any leadership training. Great leaders are constantly reinforcing the team vision, listening to feedback, making sure that everyone is firmly on board, and is actively pursuing the same goal together.
- Understanding industry trends
The ability to keep your finger on the pulse of the industry is critical for growth. They need to be malleable, and to understand when to pivot their model to adapt to economic, industry, or competitive movements.
- Sales and motivational skills
Being a cheerleader is an often forgotten skill that startup CEO’s need to have. They need to have the ability to motivate employees from the top to the bottom of their organization. This pairs well with the ability to sell. Entrepreneurs are natural hustlers and know how to convert.
- Keeping the company on plan and on budget
Every crew needs a strong and competent captain to right their ship. Maximizing time and money efficiently, while training team leaders is a finely tuned skill.
This is a no-brainer, but if a company runs out of capital or cannot sufficiently raise enough from investors—the dream will be cut short.
Why every team player needs to be a rockstar
Every team member needs to be delivering. In such small groups, every member has to be bringing more than their share to the table. In the context of rockstars, you simply cannot have a team of back up singers when you really need a team of Steven Tyler’s – minus the diva.
The right benefits package is important to play into the fabric of your company culture—but is everyone on board with your long-term mission? Do you actually value the hard work that every team member puts in? As an entrepreneur, you are only good as the people you surround yourself with, so the hires in the early days of your startup can literally sink or swim your vision. Here are three top tips to help reduce employee turnover and invest in your workforce for the long haul.