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DATA VS THE MYTHIC CEO
A truly successful CEO is less about qualifications and more about qualities
Recently, I read an article in Pitchbook entitled, “Discovering the next unicorn founder with data, not gut instinct,“ that spun together information about unicorn startups and what made them successful, the linchpin being its founder.
Given my daily work, it got me thinking about the real qualities a CEO needs to lead a successful company. Alexander Davis, the author here, calls this kind of leader in the start-up world a “mythic figure,” then goes on to explain that a successful CEO needs qualities outside of what the typical corporate role could look like. Apart from those individuals hiring c-level executives, and within the Venture Capital and Private Equity space, a truly successful CEO is less about qualifications and more about qualities. Basically, soft skills.
“But the reality is that most of the star entrepreneurs coming into prominence show
none of those kinds of attributes, according to a unique dataset amassed by Ali Tamaseb…, a venture capitalist with the Silicon Valley deep-tech firm . His findings call into question whether the big VC firms really know what to look for in their quest to find the great company-builders of the future.
"The biggest signal I observed in the data is that a bunch of things don't matter, like age and university and being technical and this kind of stuff,’" Tamaseb told me. ‘What matters is having a history of having generated value, even if that value was small.’"
So what does it take to generate value?
A great team led by a CEO who falls outside of the typical corporate top down structure, is what sets a start-up CEO apart.
What’s typical? Or what CV rises to the top of the pile in terms of hiring qualifications? Most venture capital and private equity companies are staffed according to a certain ethnic background or pedigree. Pedagogy, certain academic outcomes, schools, athletics, or expectations for a career trajectory, do not result in data that satisfies the role requirements of a successful start-up CEO. Reality, based on the story derived from the data collected by the researcher in the article, and similar to the service my company provides, showed something else: success was based on both small accomplishments and failures that embed qualities like tenacity, grit, an agile and every-adapting mindset, plus clear communication. Still, large executive search firms, VC’s, and private equity companies use the paper pedigree then hire people like themselves. Small wins and failures, not so much.
Steve Jobs offers another angle to the hiring and qualifications protocols. Jobs wouldn’t hire career managers but instead took on people who had passion for the company and products, then trained that person to articulate the company vision to others. Jobs also implemented a flat rather than hierarchical corporate structure. By getting away from the corporate structure, he hired people who behaved more like entrepreneurs (or start-up CEO’s), building a company with people who are willing to take risks.
At the first stages of a startup, there’s immense risk, and to sustain that while keeping the faith in your product, you need tenacity. Those qualities are of course necessary to just do the work and keep doing the work in the face of daily failure. A CEO learns from this, learns from his/her team, and keeps moving forward building the company incrementally.
Basically, you can hand over a resume embedded with all of the right ATS words that shout pedigree, but that’s not real data. Data is very much a matter of character. Skills don’t necessarily come from school nor does common sense.
George Deeb, author of 101 Startup Lessons – An Entrepreneur’s Handbook, and Forbes Contributor, identifies the skills necessary to be successful in this role in Six Must-Have Skills of a Startup CEO:
“When it comes down to the core skills required, a startup CEO needs: (1) a clear vision of where the ship is sailing; (2) a finger on the pulse of the industry and competitive trends, to navigate the ship over time; (3) solid team management skills to keep all employees sailing in the same direction; (4) impeccable sales and motivational skills, while maintaining credibility with clients, investors and employees; (5) to keep the business on plan and budget; and (6) keep the company liquid.”
The qualities create a baseline to have the skills Deeb identifies above. “You’re going to need a bigger boat,” but you have to have a captain and the right people for the ride.
Arthur Tisi is Chairman and Chief Executive Officer of Hunova, an enterprise insights and solution tool based on people analytics including relationships, skills, psychometrics, and work style preferences, offering unbiased and validated data on human capital. Our products provide far reaching organizational benefits across every segment of teams, management and individuals.
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