I Was Naive. I Thought Everyone Was Like Me.

What thirty-three years of entrepreneurship taught me about recognising a good CEO, and why the answer always depends on the stage the company is in.

For a long time I lived with one misconception. I thought everyone was like me. That everyone was passionate, thought analytically, burned for the cause and was willing to give everything to the business.

I then judged the people around me against this template. The result was exactly what it had to be: almost nobody was good enough. I was dissatisfied and felt surrounded by people who were not giving everything.

The mistake was not in them. It was in the fact that I had a single template and applied it to everyone.

I do not want this to sound as if I have since become wise. I still think I do not know more than ninety percent of things and that the best is yet to come. But one thing I have clarified well over those years.

A Typology of Good CEOs Exists. It Just Is Not One

It is simple to draw up a list of qualities of a good CEO. Visionary, driving force, empathetic leader, hard executor. The problem is that such a list assumes the company is always the same. It is not.

Steve Blank puts it precisely: a startup is a temporary organisation searching for a repeatable and scalable business model. A company is a permanent organisation that operates such a model. Searching and operating are two different crafts. And I add: they require two different people.

Larry Greiner, back in 1972 in the Harvard Business Review, described five phases of organisational growth, where each calm period ends in a crisis that demands a different management style. Leadership crisis, autonomy crisis, control crisis. This is not armchair theory. It describes what I have seen in every company I built or invested in.

I once divided people on this blog into journeyers and goal-setters. With CEOs I have a similar divide, just a different axis: finders and builders. A finder can identify what the market actually wants. A builder can construct a company capable of delivering that every day, at scale, even without him.

I consider myself a finder. And I openly admit that I am still learning how to manage in the more advanced phase.

Early Stage: Sacrifice Is Unavoidable. And I Am Not Telling You to Do It

Now comes a sentence I dislike repeating, but it would be dishonest of me to conceal it. In the early phase, you need to sacrifice almost everything.

If you do not give all your free time and then some, it usually does not work. That tenacity a founder must have for himself is what drives him to polish the foundation.

At the same time, I am not telling you to sacrifice your health, relationships and family. I know what I am talking about because I went through it. Back then, I absurdly believed that a relationship was also about performance. Fortunately, I grew out of it.

The difference lies in what you are sacrificing for. Giving up weekends for two years because you are building something of your own is a choice. Breaking your family in the process is a price nobody asks of you and one that cannot be returned.

Paul Graham calls it Founder Mode: the founder goes into detail, does not delegate entire blocks of the company to managers. Ben Horowitz described much the same as Wartime CEO. Both are true. And both are a disaster when you stay in that mode five years longer than you should have.

My Strongest Signal: Does He Ask Why?

When I talk with a founder in the early phase, I notice one thing: whether he asks why. Not what should I do. Not how do you do it. But: why did you do it this way? What mistake did you make and why did you think at the time there was no other way?

It sounds like a detail. It is not. Whoever asks what takes away someone else’s answer and blindly copies it into a completely different context. Whoever asks why takes away the reasoning. And that can be used again, even when the situation is different.

Taiichi Ohno built Toyota’s entire problem-solving approach on this question: keep asking why until you reach something that can actually be fixed, rather than stopping at the first plausible-sounding answer.

A founder who asks why a lot develops significantly faster. He does not have to pay his own tuition for every lesson, because he works off part of the cost through other people’s experience.

The Valley of Death Is Not Crossed Alone

Talk to those who have taken that bend. Who have walked through that valley and are on the other side. They will tell you what to do right in that moment.

But I would add one thing I only learned later: also talk to those who did not make it. The survivors will tell you what worked for them. The others will tell you what killed them. And that is information you will not find in success stories, because it does not get written about.

Ethics: The Mirror the Next Morning

I do not have a directive on business ethics. I have one criterion that I use both when founding and in crises: I make decisions so that the next morning I can look in the mirror and tell myself I would not have done it differently.

Over thirty-three years that has saved me more money than it has cost me. And above all it has kept the people who stayed with me.

The Hardest Skill: Recognising When You Are Getting in Your Own Way

The early phase will eventually end. A moment comes when the idea, product or service is validated by the market and the company starts to be built. And from that point the finder must be much more sensitive to the question: am I starting to slow the company down?

A good CEO recognises early when he is no longer fulfilling his role. When he is not delivering what the team expects of him. And usually it is because he cannot do it. But what a person cannot do is generally something he does not want to do and resists. And when there are enough unfulfilled duties, he starts to slow the company down.

You can see it in concrete things. Decisions made too quickly where the company now deserves deliberation. Fast people replacements. Resistance to rules from someone who never needed rules himself.

Noam Wasserman studied 212 American startups and found that within three years of founding, half of founders were no longer in the CEO role. In the vast majority of cases it was not their own decision. They were removed.

When someone admits this to himself, there is a better path available. He starts looking for a new CEO, steps back into the owner role and takes one area he understands, is good at and enjoys. This is not a demotion but a role change in which he is useful again.

Scaleup: We Agree on the Goal, They Choose the Path

Then comes the phase when the company is managed at several levels. With rules, directives, systems. And here I value completely different people than in the early phase.

I value those who agree with me on the final goal but define the path themselves. Patton put it better than anyone in business literature: never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.

Predictability is an underrated virtue in a large company. People do not have a problem with a demanding boss. They have a problem with a boss who is unpredictable.

Jim Collins calls this Level 5 Leadership in his Good to Great research: a combination of personal humility and professional will. Ambition directed at the cause, not at oneself. This is exactly what I look for in a CEO to whom I hand over a company.

Freedom Is Not Softness

The fact that I leave the path to others does not mean I am soft. I respect people and take seriously that they know their domain better than I do. At the same time I firmly require what we agreed on.

Goals stand. Deadlines stand. When something is not working, I want to know early and I want to hear why, not an excuse but a line of reasoning.

Freedom in method and firmness on goals are not opposites. They are two sides of the same agreement. Whoever wants freedom without commitment to results does not want to be a CEO. He wants to be an employee.

How I Recognise a Good CEO

When I summarise it into the signals I watch for myself:

1. He asks why, not what. He is interested in the reasoning behind a decision, not a ready-made recipe to copy.

2. He knows what phase the company is in. And can say whether he belongs in this phase or not.

3. He seeks out those who have been through it. More experienced people, their mistakes, their bends. And is not afraid to ask those who did not make it either.

4. He makes decisions so he can look in the mirror in the morning. Ethics is not a separate chapter. It is the filter every decision passes through.

5. He can say I cannot do this. And does not hide behind resisting it or putting it off.

6. He recognises when he stopped delivering before the team does. This is, in my view, the hardest and rarest quality of all.

7. He agrees on the goal and can justify his path. He has his own idea of the steps and can work through them.

8. He is predictable. For the owner and for the team. Demanding people can handle. Unpredictability they cannot.

Notice that there is not a single quality among them of the type charisma, visionary or ability to carry a crowd. Not that they would not matter. It just turned out they misled me for years.

In Closing

The hardest thing about this reflection for me was not drawing up the list. It was admitting that for a long time I was not measuring people by it, but myself, and I was simply assigning everyone else to that image.

Today I see it differently. I am not looking for the best CEO. I am looking for the one who fits the phase the company is currently in, and who will recognise himself when that phase ends.

And at the same time what I said at the beginning still holds: ninety percent I do not know. The best is yet to come.