[00:00] Shift your focus from execution to strategy to culture
As you scale as a business and as you scale as a CEO, it’s important at some point to shift your focus from day to day execution to strategy and culture.
When you’re running a startup execution is king. You need to make payroll so you need to execute really well. But as you scale and you hire managers and executives it will become their job to execute.
Your job is to set the strategy and build the culture so that everyone has alignment and everyone’s making decisions that are mutually consistent with each other.
[00:25] Pick investors wisely
As you scale you’re going to have to think about who you bring on as investors and the perceived wisdom is that you go with the highest valuation.
Investors are more than just money, they’re obviously a source of capital, but they can also be people that help you hire, they can be people that help you sell, they can provide strategic advice, and they can be a great sounding board.
And usually the people that are all those things as an investor, are not the same people that are going to offer you he highest price, because they don’t have to.
Usually the people that are really great, are in demand. And hence they can pay something more like market.
It’s important to know what you want in that investor, when things are going well it may not matter, but when things are going poorly you want somebody that’s there and supportive.
In the long run, the supportive investor will add more value than getting a few extra points on your initial valuation.
It’s important as you think about performance, not to get too focused on maximizing shareholder value. Shareholders are but one stakeholder.
You have customers, you have society at large, you have employees and you have shareholders.
[01:16] Balance the needs of all your stakeholders
You have to balance the needs of all of these folks. You capital is an input, and there’s a market price for that capital, but trying to maximize it is going to lead you down a bad path.
The one output from your business is what you sell to your customers. Your job is to maximize that, that’s the reason that you’re in business, is to drive that.
Sure you want to pay great salaries, sure you want to pay great returns.
That’s how you get investors and great employees, but if you’re not delivering maximum value for your customers, you’re going to let the other stakeholders down.
The role of the CEO is a lonely role. Ultimately the accountability for the position rests with you.
You have outside investors, you have outside parties that can give you advice, you have employees that are in it with you, but full accountability is on your shoulders.
[01:55] Stay level
Things are going to go up, things are going to go down. You’re always going to be disappointed in things, week-to-week, day-to-day.
The important thing is to not worry about the small things, focus on the overall trajectory.
The thing that’s bothering you today, you’ll probably have completely forgotten out in a year, so just focus on the big story, don’t worry about the little things.