Anyone familiar with business in all the existing forms and sizes, knows there are clear differences between starting a sole proprietorship type “shop” business and something that is intended to become a vertically integrated company (with a leader at the top called the CEO). More often than not, the difference is an outward manifestation of the original intent of the owner. (Note: For this discussion, we will look at the start up where the CEO is the founder, as opposed to being a hire during the growth process.)
A CEO for a company normally enters into the start-up process from one of two frames of mind. The first frame of mind is someone who has definite plans to take what he is doing big, and understands the vertical integration structure that is common to larger operations. The other frame of mind is one that has a hope of building a successful organization that makes the start-up CEO as much money as possible, but with much less knowledge of the vertical integration structure (and even less about how to achieve that structure).
At first glance, it might seem that a CEO who has frame no. 1 will have the advantage in a start-up. Surely, it never hurts to begin with the end in mind. It is even better if they have prior experience in the process. If they don’t have experience, but they have the big ideas for growing big, they can actually be at a disadvantage. On the other hand the person with the open mind might be more geared to actually making money and then financing the growth of the company with a strong balance sheet.
The point is that a CEO can start what becomes a large company coming from many different points of view and levels of experience. Still, common threads for executing a start-up and becoming a company (where a business owner becomes a CEO) exist, and should be the point of your focus as the leader and driving force of the business.
In his book “The Art of the Start”, venture capitalist Guy Kawasaki advises every business owner who wishes to go big and become a CEO of a large organization to not only begin with the end in mind, but to have great clarity in the way of a specific business plan. He rightly points out that growing bigger and stronger as an organization is not normally the result of accident or luck.
He also advises a budding CEO to be best prepared for the difficult road of growing a business by choosing a business that is centered on being meaningful. Meaningful businesses make the world a better place, or increase the quality of life, or right a terrible wrong, or prevent the end of something good. The reason this is important is businesses that are grounded in a valuable meaning at the outset are much easier to take big by making sales and attracting investors. These businesses just resonate better with people on an emotional level. More importantly, these businesses engage the CEO emotionally and keep him going when times are tough.