20 September 2011 by Published in: business, rants No comments yet

Here’s the job of a CEO:  to make money.  To spend less than revenues.  That’s it.  It’s really that simple.  Everything else is the how of doing that–how to cut costs, how to drive revenue, whether to worry about the short-term or the long-term, etc.

The perception, though, is a lot different.  Stereotypically, the CEO is the guy with the nice car, the fancy office, the leather appointment book, the expense card, the guy who goes to board meetings, with lots of scary legal paperwork in neat little file folders, and who takes three lunch meetings a day.

Now all of those things can be part of a CEO’s job–if they help make the company money.  If you’re the CEO of HP, you might need the nice car and fancy office to close sales deals.  Board meetings in a public company are a must, just to appease the shareholders.  No argument there.

But if you’re a small bootstrapped startup, probably none of that matters.  All you have to do is build the product and then sell it.  Everything else is a waste of time.  Every minute thinking about whether you want a beige or brown appointment book, about whether to elect to be taxed as an S-Corp, about who to ask to sit on your board, about what kind of business expense card to open, is a minute not spent doing your real job.  Which is, make money.  In other words, paradoxically, by trying to act like a “real” CEO, you’re not being a very good CEO.

But that’s not how many “entrepreneurs” think.  They’re into cargo cult CEO-ing. of behaving like the CEO of HP in order to become the CEO of HP.  Microsoft has a board, therefore we need a board.  Apple has a legal department, therefore we need law firms on retainer.  But a person isn’t the CEO of a Fortune 500 because they have a cool appointment book, or a legal department, or a board of directors.  Nobody’s going to say to Rory Read  “Your checkbook is not made from leather, and therefore, you are demoted.”  They are way too busy worried about AMD’s financials.  You know, the CEO’s actual job.

The marketers have figured this out.  There’s a big market in selling people “the CEO lifestyle.”  You don’t just need to incorporate your company, you need this official-looking incorporation kit.

If only I had spent money on this instead of building our product

Whether you’re looking for a car, writing instruments, paper-holding devices, paperweights, wristwatches, clocks, a box, or  fancy clothes, an army of marketers is standing by to sell you a mountain of overpriced “CEO-grade” junk.  For just a few hundred bucks, you too can own the knickknack that no “real” CEO would ever put on his desk.  I’m going to go out on a limb and say that if you’re a small company, none of this stuff is going to make you one extra dollar.  Nobody’s going to back out on a sale because you’re writing checks out of your personal bank account.  Nobody’s going to refuse to sign the contract because you’re using a $2 G2 pen.

If you’re buying “executive” stuff, you’re doing it wrong.  If you’re doing “corporate” to fit in with imaginary colleagues, you need a wakeup call.  Even Tim Cook doesn’t buy this stuff–he has people buy it for him.  Until you get there, just get regular pens and such and spend your time thinking about your actual job.

It’s part of a larger trend–of business owners who are basically out on play dates like two-year-olds.  Sure, we have no revenue and no product, but we do have corporate minutes!  And an expense account!  And stock certificates!  So obviously, we are legit.  No.  You are legit when you make money.  I guarantee you that Steve Jobs didn’t start taking corporate minutes because he enjoyed it.  I’m sure he argued strongly against it, because it got in the way of, you know, building actual products.

You see this too when someone from a large company ends up at a startup.  They’re used to all the corporate nonsense that large companies legitimately need to function and they incorrectly apply those processes to companies that are fractions of that scale.  Before the first customer, we need a marketing plan.  Before the first product release, we need all these patents.   Let’s spend a lot of time thinking about the optimal accounting method.  These are the scariest types of businesses, because they are often the most convincing, until you get inside, and realize that there’s no real product and no real customer.  Newtonian physics doesn’t apply at a quantum level.

And while we’re on the subject, I think we need to take back the word “CEO”, and start limiting its use only to businesses with a million or so in revenue or investment, or equivalent nontrivial qualification.  If you’re posting about your unfunded business venture on Craigslist, you’re not a CEO.  If your company is three people in a garage, you’re not a CEO. Imagine if society humored people who wanted to be called “Prime Minister” because their two best friends elected them, and now they start handing out business cards with “Prime Minister” on them.    It’s absurd.

Anyway, if you make decisions for a company, in whatever role, don’t get distracted by the glitz and glam of some stereotypical idea of how an executive should look, act, or behave.  It’s all an illusion by the marketers to take your money.  It takes a lot more than a neat appointment book to run a company.


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