I founded a software company at 24 and grew it to $1 billion plus valuation over 10 years. I learned slowly and painfully through trial and error, but you don’t have to. Here are my top 7 mistakes as CEO –– and how to avoid them.
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1. Didn’t say “no” enough.
“Good” ideas are everywhere. I put too many in play, which confused and distracted my team.
- Create a forum for new ideas, but a system to filter.
- Stay true to your annual goals and use them as a way to say “no” to other ideas.
- Don’t listen to someone simply because they have “more experience.”
2. Hired sales too late.
I used to believe that great products sold themselves. Nope. Years of growth were wasted by relying on the product (and myself) to acquire customers.
- Once you prove that someone will buy it, it’s time to hire.
- The product feedback from a sales rep alone is priceless.
- In an ideal scenario, hire two sales reps as an A/B test.
3. Didn’t coach well enough.
“Fire fast” is a well-known saying, and correct in many cases. But looking back, I lost good people because of my inability to give direct feedback.
- Don’t be intimidated to coach others, regardless of their past experience.
- Coach them on what you want to happen.
- Don’t coach them on how to do their job.
4. Had too many goals.
In the early years, I used to have five to 10 annual company goals. That led to confusion and competing priorities all year long. Create a maximum of three annual company goals.
- Make each one short, clear, and measurable.
- Have everyone on the team create their own goals that align to the company’s.
5. Let product investment get out of whack.
There’s naturally a tug of war for resources in any given year. I under-invested in product once we had our sales engine going.
- Don’t take your foot off the product accelerator.
- Use sales as a valuable source of product feedback.
- But product should lead sales, not the other way around.
6. Didn’t define our values.
As the company grew, not everyone understood what our core values actually meant. And in some cases, they took them in the wrong direction.
- Don’t just create core values, define them.
- List three bullets under each that describe what they mean.
- For bonus points, provide real-life examples.
7. Raised money from the wrong people.
This one almost took the company down!
- If you can, stay bootstrapped longer.
- Vet prospective investors, then vet them again.
- Make sure they are values-aligned (different for each company).
- Don’t give them special rights.
Scot Chisholm founded software company Classy (acquired by GoFundMe), serving as CEO for over 10 years and leading it to $1 billion-plus valuation. More recently, he founded Haskill Creek Farms, a new spin on the traditional pharmacy. He coaches founders/CEOs, helping them transition to high-impact leaders.
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