5 Most Important Leadership Skills for Startup CEOs

5 Most Important Leadership Skills for Startup CEOs
5 Most Important Leadership Skills for Startup CEOs

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Startups are environments characterized by high risk and innovation. And while passion and courage are hallmarks of the entrepreneurial spirit, CEOs have to be more than entrepreneurial cowboys and innovators in order to see their startup through the initial volatile phases.

The ability to be flexible in dealing with curve balls and to build relationships based on trust as well as towing the line between empowering team members and making top-down decisions are some key characteristics of a successful startup CEO.

Flexibility – Being a CEO of a startup usually means you’re operating without a blueprint. And if you do have a blueprint, you’d do best to throw it away as things will come up that you never imagined and you’ll have to make changes and adjustments to your finances, product, team, marketing and any other number of things you never imagined before. Someone else could come out with a disrupting product or service just before you’re ready to launch. Your competition might hit the ball out of the park with an excellent product that’s better priced than yours. Investors may not come through. Pandemics might strike. You might need to pivot to survive. Elon Musk advises, “Some people don’t like change, but you need to embrace change if the alternative is disaster.”

Building trusting relationships – Startups are often in a state of financial insecurity, and that makes it especially important to demonstrate transparency about finances to employees and investors. Employees who are working for little pay in the hopes that the venture will succeed would feel betrayed to know that the CEO is taking home a fat paycheck that should be invested in more resources to get the startup to the next stage. Make sure you and your cofounders are making the sacrifices you expect your team members to make to demonstrate solidarity and strong leadership ethics.

Likewise, CEOs are the ones in the meetings where investors are writing them checks. They have to show integrity in their reports and not make false promises about progress or data. Of course, any investor worth their salt will do some research before shelling out, but it’s never a good idea to take advantage of an investor’s ignorance in order to secure funding, even if you think the promise that you’re making to them will come true, there’s no guarantee. It’s not worth burning your reputation in the future. The ability to be honest and build trust will be worth much more than any exaggerated or fabricated success story. That way, you and your investors can grow together, and they’ll know they can always trust your integrity.

Balancing empowerment with top-down decisions - Startups are known for being environments where team members are given a lot of autonomy in order to stimulate greater and greater levels of innovation, ad infinitum. However, this is actually a huge amount of responsibility to foist upon team members who are in general young and without much leadership experience of their own. Additionally, they are likely already working long hours to get their jobs done without asking them to also look at the big picture and constantly come up new and with creative solutions. If you do this, you risk burning out your staff. Do encourage and give value to their contributions and ideas in regularly scheduled problem-solving sessions but also make sure they know that someone is at the helm of the ship and is steering them through the storm. Exercising your right to executive decision-making when appropriate helps to create structure and clarity about roles and responsibilities among team members while still allowing them to have creative freedom.

Younger team members particularly tend to value having the chance to make a significant contribution and find more fulfillment in their work when they’re given the chance to do so. However, while they might have great ideas and impressive knowledge in a certain area, the big picture is really your department as CEO as is being able to place their solutions within a realistic framework.

Decisiveness - Great startup CEOs are not perfectionists. Rather, they know when something is good enough to roll out and they understand that the startup game is about who got the idea out first. Early customer feedback is key to building a more valuable product so don’t delay. Abdulrahman Al Suhaymi, leader of the global entrepreneurship and innovation initiatives at the MiSK Foundation in Saudi Arabia, says, “Sometimes the key to success is speed and agility, especially when it comes to strategy and decision-making – whether you’re in the beginning, or if your startup is in the middle of its life cycle…Speed always wins over perfection, so this is something that most of the successful entrepreneurs share as advice all the time.”

Grit - Startups are not easy climates to navigate and their failure rates are notoriously high. In order to succeed, a fair amount of grit is necessary. Dealing with financing issues, organizing team productivity and product rollout, betting on the right time to scale and essentially inventing all this from scratch often means working very long hours and having little to no support. In fact, many startup entrepreneurs are often going against the advice of family members, peers and mentors who are trying to save them from what they perceive as disaster from the outside. In order to weather these moments of loneliness, uncertainty and doubt and still pilot your startup into the future requires patience, endurance and, yes, grit.


Successful startup CEOs know when to be flexible and how to empower their staff to innovate. They also have integrity and can build trusting relationships and know how to make quick decisions. Lastly, they are a tenacious group whose willingness to stick it out when others would have given up separate them from the startup failures. As Pierre Omidyar, the founder of eBay said, “If you’re passionate about something and you work hard, then I think you will be successful.”