Home Article and Opinion 5 traits of a great CEO

5 traits of a great CEO

While all are important, the one you can’t do without is being an A-Team builder

Leaders must raise capital to operate their business. Their related questions include: How much capital does my business need? How does the amount of capital vary by stage? What are the advantages and disadvantages of raising venture capital? What do venture capitalists look for in a CEO?

Last week I spent 40 minutes video-conferencing with an incoming student to Babson College’s one-year MBA program. Calling in from Zimbabwe, the student — who is currently running an IT equipment distributor — was looking for answers to these questions.

He was happy with the answers I provided. As he wrote me, “The education you gave me yesterday, from the company growth stages, qualities of a competent CEO, qualities of companies that get funded and the cons of taking venture funding will last a lifetime for me.”

Of all these questions, I think business leaders should focus first on whether they have the traits of a great CEO and what they should do if they lack some or all of those traits.

Based on my interviews with dozens of venture capitalists from Hungry Start-Up Strategy, here are the five traits of a great CEO and what you should do if you lack each one.

  1. Industry Thought Leader.

Investors want to provide capital to a CEO who is solving the right problem. In my book, that often means someone who has customer pain, tries to find a company to solve it, fails to find one, and starts a company to make that pain go away.

Investors want to be confident that the CEO cares so much about relieving that customer pain that they know more than anyone else about the industry — including the problems facing customers, the strengths and weaknesses of all the technologies that could solve those problems, and the most compelling vision for its future.

If you are not an industry thought leader, you are less likely to raise venture capital. You might be able to hire someone to bring you up to speed, but unless you can stay ahead of rivals, you will struggle to win and grow market share.

  1. Will to Win.

Running a startup is an all-consuming challenge which demands a spirit that is not easily discouraged by unexpected problems.

Investors want to back CEOs who have a demonstrated track record of winning — whether in academia, sports, or other competitive fields. Moreover, investors look for winners who are still hungry — that is their passion to keep winning is deeply ingrained.

If you lack the will to win, venture capitalists will lack the will to invest in you.

  1. High Clock Speed.

The problems facing an entrepreneur are often ones that others have not solved already. To investors, high clock speed means that the CEO has a voracious hunger for new information that can help solve the novel problems they face.

Investors look for CEOs who are smart, curious and doers of fast-frugal experiments. That last trait is easily learnable and a great way to learn fast. To be good at doing such experiments, a leader must

Identify a problem,

Guess what the solution would be,

Design and execute an experiment — for example, build a prototype of the possible solution, give it to customers, and ask customers how well it works,

Evaluate the results, and

Repeat the process until the solution is clear

  1. Risk Manager.

Venture capitalists take big risks — typically only about one of 10 startups in which they invest generate enormous returns. VCs want to increase their odds of success by betting on CEOs are are good at quickly identifying and eliminating as many important risks as they can.

For example, it is better to target a market that is much larger than $1 billion because VCs typically do not think that a startup can get more than 10% of any market. To go public, a company generally must top $100 million in revenue.

So you can lower the risk that your company won’t reach that scale, by targeting a huge market — especially one where your company offer customers an irresistible bundle of benefits for the money.

  1. A-Team Builder.

Traditional VC wisdom is that A-players try to hire people who are smarter than they are and B-players higher C-players who are guaranteed not to outshine their managers. And VCs are eager to bet on the most talented team in the industry.

To do that, the CEO must be an A-team builder. Such business leaders have charisma, integrity, and the ability to attract, hire and motivate the best team available on the planet.

Of the five great CEO traits, none is more important than this. How so? If you’re an A-team builder and lack one of the other four, you can hire people to offset your weaknesses.

Inc

RELATED ARTICLES

SCOA Boss Commends Unity Bank, Others for Facilitating Supply of N15.5b worth of Trucks, Equipment to Julius Berger

LAGOS. 16.09-21. The Group Managing Director/Chief Executive Officer of SCOA Nigeria Plc, Dr. Massad Boulos has commended Unity Bank Plc and other banks...

Rite Foods’ Bigi Brand Powers Abeokuta 10km Marathon

Rite Foods’ Bigi brand is fully prepared to power the Abeokuta marathon as the headline sponsor of the10 km race scheduled to...

The wealthiest entrepreneurs have this essential characteristic in common

The wealthiest entrepreneurs have this essential characteristic in commonDo you have what it takes to join the ranks of the most successful...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

SCOA Boss Commends Unity Bank, Others for Facilitating Supply of N15.5b worth of Trucks, Equipment to Julius Berger

LAGOS. 16.09-21. The Group Managing Director/Chief Executive Officer of SCOA Nigeria Plc, Dr. Massad Boulos has commended Unity Bank Plc and other banks...

BREAKING: Buhari critic, Femi Fani-Kayode led by the spirit of God, formally join APC, meets Buhari

Femi Fani-Kayode, a former minister of Aviation and chieftain of the Peoples Democratic Party (PDP), has formally joined the ruling All Progressives...

BREAKING: EFCC Chairman slumps

The Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa slumped at the third National Identity...

Primate Ayodele’s Prophecy On Nigeria’s Economy Collapse Already Coming To Pass

The Nigerian economic situation is getting worse as the day goes by. The dollar rate is on the high side and prices...

Recent Comments