How to Transition from a Startup CEO to a Scaleup CEO




The day your startup grows up and graduates into a scaleup business is a good day (pretending just for a moment that this happens in just one day).

You’ve successfully established yourself as a viable business, figured out how to acquire customers, and assembled a team of like-minded go-getters.

It’s absolutely worth celebrating.

But once you’ve taken a celebratory tequila shot and signed a new lease, it’s time to reevaluate some things.

As your business grows and transforms, so must you. The skills that got you where you are will no longer serve you in a scaleup environment, and failing to acquire these skills may prevent you from realizing your full potential.

I’m passionate about this subject because when my company transitioned from a startup to a scaleup, I failed in doing this as timely as I should have. For me, the transition took over a year. During this year, we could have grown much faster, but I was stuck in startup (survival) mode.

So if I can use my experience and help a fellow startup CEO become a successful scaleup CEO, it will be well worth it.

In this article, we’re going to discuss what makes a great startup CEO, what makes a great scaleup CEO, and then how to successfully transition for the betterment of your company.

Traits of Successful Startup CEOs

A startup CEO’s number one priority is to validate the business model and establish a foothold in the market. For most industries, this requires a jack-of-all-trades approach, with an emphasis on business development. Startup CEOs are in the sales meetings, getting to know early adopters on a personal level. This face to face value is huge. It’s often the reason a customer will choose you over “the established guy.”

A startup CEO must also learn to thrive in “survival mode.” They must pay close attention to cash flow and other resources (like personnel) to maximize output while minimizing costs. Knowing day to day costs and operating budgets allows CEOs to make quick, proactive decisions.

Both the long and short game must be taken into account, but generally, startup CEOs must focus on the short game of the business. That’s because a startup’s long-term play will change on a weekly basis due to shifts in the short game. To coin an overused Silicon Valley term, you must be able to “pivot” on a dime.

Finally, a startup CEO must be scrappy and they need to know how to recruit early-stage team members that share that same quality. Putting together a small team that shares the same work ethic and values is one of the most important things a startup CEO can do.

Traits of Successful Scaleup CEOs

As mentioned before, the skills required to be a successful startup CEO will not serve you in a scaleup because once you’ve hit this milestone, you must transition your focus to the medium/long term strategy of your organization.

Hitting this milestone can be quite nebulous. When you’re in the thick of it, it’s hard to see the forest for the trees. The best advice I can give is to be aware of the difference between the two roles and make time to reflect where you’ve come from vs. where you are. Self-reflection is a good place to recognize your version of this milestone.

Once you’re there, work on these skills.

Get the Right People on the Bus

If you’ve read Jim Collins book “Good to Great”, you’re no stranger to this concept. I believe it’s one of the most important things to implement in your scaleup business.

Jim Collins spent years researching what made companies great, and the resounding characteristic was the concept that “who is more important than what.” To summarize, when you figure out the who, these things happen:

  1. Your company can adapt to market changes. “If people join the bus primarily because of where it is going, what happens if you get ten miles down the road and you need to change direction?”
  2. Motivating and managing people is easy and rewarding. “The right people don’t need to be tightly managed or fired up; they will be self-motivated”
  3. If you hire the wrong people, everyone will be miserable, including you.

Develop & Retain Talent

Developing and retaining talented team members is also essential. When you let your team grow into leadership positions, suddenly you can focus on bigger, more strategic business goals. On the flip side, failing to let others lead will only hold you back from thinking long-term and growing the foundation of your business.

There are two ways to acquire leaders: Build or buy.

To build is to train the talent you have on hand. To buy is to recruit experienced leadership. There are pros and cons to each of these strategies, and they should be thoroughly thought out.

Foster Innovation

Developing your leaders coincides with fostering innovation. You won’t have the time to think of every new product feature, sales strategy, and marketing campaign. Instead, you need to find talented individuals and then encourage them to innovate.

This motivation typically comes down to workplace culture. Things like creating a culture of trust, letting your employees take risks and fail, and rewarding good ideas as they come across your desk.

Tactically, one of the best ways to foster innovation is to listen. Listen intently to ideas as they come your way. Even more than a CEO, become a CLO (chief listening officer).

Discovering New Market Opportunities

New markets are out there, and often it takes creativity and perseverance to find them. If you’re in the weeds of your work, they’ll pass you by.

A scaleup CEO will be on the lookout for new market opportunities while enabling expansion of the core business.

Unwavering Vision & Commitment to Culture

Maintaining culture in a scaleup can be difficult. Startup cultures are synonymous with constant collaboration, enthusiasm, friendships, and steadfast work.

As a company grows, it’s easy to lose many of these things.

You implement processes that reduce collaboration and inevitably sacrifice (some) creativity. You grow your team and not everyone knows each other. Your success may warrant a more relaxed approach to getting work done.

These changes can be wonderful things, but failing to define and actively implement an intentional culture can negatively impact other areas of your business (all the items listed above).

As CEO, it’s your duty to help establish a culture and train your leaders to implement it. If culture fumbles at the top, it will trickle down until your team is no longer happy. Turnover increases, it’s more difficult to recruit, and your company loses its edge in the market.

How to Transition from a Startup CEO to a Scaleup CEO

The only way to begin transitioning from a startup CEO into a scaleup CEO is to surround yourself with talented individuals, and then let them run. Start delegating your old responsibilities so you free up your time to focus on the things outlined above.

If you hesitate, you might find yourself bogged down with responsibilities that aren’t contributing to strategic business goals. While this may not cause catastrophic damage, there is an opportunity cost. You don’t want to be five years down the road and wonder what could have been.

Final Thoughts

I’d like to reiterate how difficult making this decision can be.  It may never feel like the right time. You may always have the “what-if” feelings that linger from startup-CEO-mode.

If you’re in this territory, ask yourself what the end goal is. Do you want to go into maintenance mode, because you like the idea of keeping things as-is? Or do you want to scale and grow quickly? Depending on your answer, transitioning into a scaleup CEO may or may not be for you.

If you have decided that scaleup mode is for you, then you must start playing the long game for growth. You’ve got to switch from defense to offense. You’ve got to get out of survival mode.

Focus on the skills mentioned above and master them. If you do so successfully, you will scale your company and continue on the path of growth.

If you’re a CEO and would like to connect with me, please reach out. I would love to extend my experience and help you achieve your business goals.

Author: Brett Truka, CEO of Devetry