Microsoft is one of the most incredibly successful companies of the last several decades. “How long did it take Microsoft to get to $50M in revenue?” Fresh off giving a talk to entrepreneurs during SXSW, Joel Trammell shared some of his presentation with us during our DC Sessions event earlier this month.
The answer is eight years.
Trammell explained that promises of quick revenue or outstanding growth have no place in an early business. You must be honest with your team about the growth you are achieving and exactly what plans you have to expand. If you keep overselling and underdelivering, people will lose confidence in you. You must produce a reasonable plan. Will you likely hit $500 million in revenue by year three? Knowing that not even Microsoft could do that, is it reasonable for you to make such a projection? Demonstrate to your team and to your investors alike that you confidently understand your industry.
An expert in coaching CEOs and business leaders to manage better companies, Trammell explained the evolution of the CEO role as a startup or small organization scales.
In the beginning stage, maybe what could be referred to as the “five people in a garage” stage, the founder wears just about every hat. The founder is the CEO, and is also the VP of Sales, the VP of Marketing, and the chief floor sweeper too. But as you transfer through the stages of your company, the CEO must give up the various roles to someone who is better at each. Wherever the CEO fails to “hand off the hat,” that's where the growth of the organization will plateau.
When the company is scaling, the CEO must spend his or her time more wisely. Trammell says that the really good CEOs will look like they are not very busy, because if they are doing these things right:
- Own the vision,
- Provide proper resources: people, capital, outside expertise,
- Build culture – of what you are, not of what you want to be,
- Make good decisions. how fast, who;
the CEO then can take these elements into delivering performance. What does “performance” mean – what does “winning” mean throughout all points of your organization? Define these things by wearing the “coach” hat.
Try to avoid the “player” hat and put on the “coach” hat more often: Recruit, train, and support players. After the CEO has been able to put away the sales and the marketing hats, what other hats might be worn?
- The “architect” hat: evaluate what you are building and whether you are using the appropriate tools to execute the vision.
- The “engineer” hat: measure what you are building and determining which metrics are correct to apply.
- The “learner” hat: keep it on at all times so that you can constantly adapt to new problems that your business faces each day.
- The “priest” hat: absorb the friction that is hitting your business on a daily basis and avoid getting brought down by negative forces.
Balance the swings that your company will face. This is exactly why the CEO role is pretty lonely: you might find it difficult to participate fully in the celebrations and you will have to bear the brunt of the challenges. Check out the full video here: