Today on The Startup Chat, Steli and Hiten talk about replacing yourself as CEO or the founder of your startup.
One of the hardest decision a founder can ever make is deciding when it is time to hand the wheel to someone else. Why it may seem like something that needs to be done, it’s also something that Hiten recommends you don’t do as it can limit the success of the company amongst other things.
In this week’s episode, Steli and Hiten share their thoughts on why you shouldn’t replace yourself at your company, how to do this the right way if it’s something that has to be done and much more.
Time Stamped Show Notes:
00:32 About today’s topic
00:47 Why you should replace yourself as the founder of your company.
01:36 Another reason why you shouldn’t do this.
01:55 How replacing yourself reduces the chances of your company succeeding.
04:16 An example of an exception when it comes to replacing yourself.
04:43 The best way to do this.
05:38 Why it is better to promote someone in the company.
06:06 How your customer feels about changes to the CEO position.
07:30 Why a founder might want to do this.
3 Key Points:
Your chances of success once you replace yourself go down tremendously
You don’t replace yourself as a founder, you are a founder for life.
Your business still has to run.
Steli: ... Boom. Hey, everybody, this is Steli Efti.
Hiten: And this is Hiten Shah. Today we're going to talk about one of my favorite topics. I'm just kidding. I've been through it and it sucks. The topic is replacing yourself as CEO or founder. First thing I'll say is you don't replace yourself as founder. You're a founder for life. Sorry.
Hiten: But I want to say it because you might not be the CEO and you might try to replace yourself. So my reaction to this was very personal, and my reaction to this was, “Don't do it.” And I'm going to say why real quick and then, Steli I'm sure you'll have some thoughts. So I went through this at my company, KISSmetrics. We had just gotten through a major lawsuit after a couple of years. We had an independent board member who was in the company and we were basically considering making him CEO and we decided to do it. And, honestly, it was the worst decision I every made about a company. I was actually amicable about it. I think there were things about, ironically, sales, that I wanted to learn, and I thought this gentleman running the company as CEO would be able to help me learn those things. I was dead wrong. Nothing wrong with him. It just wasn't a good fit for our company, and I think people wanted a change. And the thing is, I never got to run the company and grow the company. I had to watch someone else try to do it. That's why I'm bringing baggage to this conversation. I rarely do, but in this case I am. The other baggage I'm bringing is when I went through this I asked many people. I asked probably like a dozen different CEOs and founders who have done this themselves and replaced themselves, and they all said, “Don't do it.”
Hiten: So ...
Steli: Go ahead, go ahead.
Hiten: No, no. Go ahead.
Steli: No I was like, first of all I love your honesty about this and it's great to find a topic once in a while that gets you riled up, right? Some kind of a personal experience that gets your blood boiling.
Hiten: It's worse. Steli, it's worse. I went in there again, for six months after, I don't know, two years. I was still at the company but ... Actually, I don't remember if I was still at the company.