Fred Wilson’s Advice On The CEO Role

Fred Wilson just did a fantastic little post titles, “What A CEO Does.”  In the post, a venture capitalist states very succinctly that a CEO’s job is to do the following:

“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.”

Overall, I agree with the statement.  The last sentence referring to “cash in the bank” would obviously change based on the size of company.  In the startup world, you are typically trying to crawl into a position where you have positive cash flows.  Depending on your size and growth profile as a company, you could easily add a couple of others, including:

Growing share – if you are in a growth business which I hope that most of you are in, you’ll not want to compare just your year-over-year growth in terms of your own revenue and EBITDA.  You want to look at your relative growth against your competitive set.  When you are in a market that is growing at 20% and you are only growing topline revenues at 5% then you should be patting yourself on the proverbial back.

Huge goals– I would come up with a global “big hairy audacious goal” that the company can rally behind.  At Expedia, we were #2 to Travelocity for many years – we focused on them, beat them, and then focused on the next competitor.  Rallying around a metric or symbol is a powerful rallying cry for any organization.  Here is a post that that topic.

In a larger company, its easier to delegate everything else (like operating the company).  One of the most exhilarating things about startups is that you where all of the hats, you don't necessarily have the benefit of setting top level direction.  You are doing everything.