Nokia Startups Mistake #1 – CEO Who Can’t Sell or Lead The Product

This is part of my Nokia Startups Mistakes series. For a backgrounder, please read the introduction.

The first three mistakes I am going to discuss are all team based, intertwined, and will look at the team composition issue from three different angles. Warning! In this opening post, there is very little Nokia specificity but that will come evident in future posts.

What are the three most important things in a startup? Team. Team. Team. Building a high performance team is a matter of life and death for a startup. It is an extremely difficult undertaking. Having said this, building a great team starts with the CEO. If the CEO sucks, you are in deep shit. I am by no means saying that the CEO would be the most important or unique asset in a team – most likely not – but the CEO problem is psychologically the hardest to fix, and the shit will flow down the hill with high impact on the whole core team and their overall motivation and productivity.

What is the job of a startup CEO?

Startup CEO’s job is to transform a collection of raw ideas into a product that can be sold to paying customers. If he is not hands-on with the product and how it is sold – and I mean really, really hands-on – how could he drive the operations then? He can’t. Instead he becomes a helpless figurehead who runs around doing non-essential chores such as talking to press, networking with investors, or spending quality time with a beloved excel. While useful and important, these are not the core of a startup CEO’s job prior there is at the minimum a product prototype available. I have seen a number of these general management focused CEOs in Nokia-based startups. There, however, is nothing general to be managed in a startup until it has a sellable product. At the early stage, a CEO who can’t sell or lead the product becomes the worst-case free rider and cost center whose time has not yet come. Two different worlds!

A startup CEO in a software and hardware product business, based on my experience and common sense, must be good in either of the following two skills, optimally in both:

  1. He needs to be able to drive sales and close deals.
  2. He needs to be able to define and iterate product based on vision and customer feedback.

Why should you care?

These are not optional but vital skills that a startup needs to get off the ground and stay alive. Poor team composition, especially the one that starts with the CEO, is a company killer and a tough issue to fix, and here are a few reasons why:

  1. It eats your startup and its culture inside out. Other people will figure out that CEO’s hands-on skills are too far from things that can make it or break it right here and right now.
  2. It eats your startup outside in. Professional investors don’t invest as they don’t believe the CEO can efficiently contribute and lead the team beyond the pep talk.
  3. There is a lot of emotion and politics in play when it comes to team composition issues in general and specifically if the CEO is either part of the problem or the root cause, and this setting practically limits the honest direct feedback externally and internally.

Most consultants, incubators etc. are soft. Their job in Finland mostly focuses on helping you to improve on your pitch, be darn positive about everything (there is nothing wrong with that!), and they easily are a way too impressed that you once had a nice sounding Senior Vice President, General Manager something title. Don’t expect the consultants to tell you that you have the CEO problem even if they would suspect it. Why? Mostly people with the experience to notice the CEO issue and balls to share that with you are not consultants. And even if the consultants (or VCs, and angels) had the experience and the balls, it is a way easier emotionally to let you deal with team related issues internally, and jump in later on if and when issues are fixed.

What can you do to make things better?

Team composition is something you should get right in the very beginning. At the same time, it is quite unlikely that you would get it right the first time, while it certainly helps if you have worked as a team before. Here are a few take away rules:

  1. Make sure you do have a CEO who either can sell or lead the product.
  2. Fix the CEO issue before incorporation. Latest before you raise any external funding.
  3. Craft a shareholders’ agreement that allows other team members to get rid of the CEO if he doesn’t perform.
  4. Be aware that a startup CEO’s DNA and mentality looks quite different to that of a typical Nokia executive.
  5. Be lucky and ramp up the organization (and more importantly revenue and profit base) fast enough that you will need a CEO who excels in excels and leads the troops.

“If a CEO can’t sell or drive product definition, he might be a nice person and do well in a number of corporate or later-stage startup settings but an early-stage startup CEO he is not.” mumbles the Tough Love Angel. 

I hope you will enjoy this series, the thoughts it provokes, and the discussion it triggers. Please do participate to the discussion by sharing your own angle and experiences on this topic, or commenting on something, anything on this post. The preferred place for discussion is the Facebook page at https://www.facebook.com/ToughLoveAngel.

If you would like to get notified of a new post, please follow me on Twitter, and subscribe to the blog and its Facebook page.

8 thoughts on “Nokia Startups Mistake #1 – CEO Who Can’t Sell or Lead The Product

  1. Markus Ahonen (@forkweight)

    Nice post, Håkan. I’m with you.

    In general, sell or lead the product, yeah – but I’d emphasize “lead” most of all. Getting the rest of the folks fired up is a key ingredient, and the ability to get the team energized is key. That often comes from practical problem solving ability – e.g. being able to sell, or to solve product problems – in order to maintain momentum. My experience is that a sensation of momentum is the best way to overcome motivation problems.

    …Finally, I’d add one more skill to choose from: Listening to the customer. “Selling” is not a successful strategy. Listening to customers is the key skill required to get sales flowing.

    Reply
    1. anonymous

      If the people in a startup are not motivated and energized about what they are doing their place is somewhere else. They won’t need a CEO to do that or they are doomed in the first place.

      Again, the problem with an unmotivated team sounds like Nokia. Not like a typical successful startup.

      Reply
  2. Ltiilika

    Half of the effort is selling and the other half is delivering. Balance is the key, even in the one-man-startups. If you don’t sell, you don’t get the money. If you can’t deliver, you don’t get the money either.

    One of the biggest challenges in the startups is that often they are too product focused. Too many of them are trying to perfect the product, thinking that it will sell itself when perfect. Most of the time it is better to face the customers early on. That will reveal the potential of the product. If all that is part of the product definition, then it’s ok.

    The first customers will anyway have an effect on the product definition. The crucial feature of a CEO is thus to understand the customer in relation to product: What does the product mean (benefit) to the customer and how the customer will get it, i.e. how is it delivered. Sales and delivery.

    Reply
  3. Mikael Klug

    It is all about to tell your bullet proofed story (selling) and to convince potential customers in the first run or to try it out and to use/play/integrate your product/solution solving a pain or a need. This is the essential key today for a start up. Get out and show people in what you believe. In the first stage this must be done by the CEO!!

    Reply
  4. http://mariahmphoto.com

    Thank you for posting Nokia Startups Mistake #1
    – CEO Who Cant Sell or Lead The Product
    | The Tough Love Angel, I just actually was looking for
    anything very similar and was thrilled to come across the info through
    this posting.

    Reply
  5. http://byedodo.byedodo.com

    Hi there I am so thrilled I found your blog, I really found you by error, while I was researching on Google
    for something else, Nonetheless I am here now and would just like to say thanks for a incredible post
    and a all round thrilling blog (I also love the theme/design), I don’t have time to read
    it all at the moment but I have saved it and also added your
    RSS feeds, so when I have time I will be back to read much more, Please do keep up the
    fantastic b.

    Reply
  6. Pingback: Linkpedia vol.1 | HUB

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s