- The most common mistake growth founders make is not realizing that their job description changes as the company grows.
- In the early stages, the CEO's focus should be on building and selling the product.
- As the company grows, the CEO's job shifts from doing to leading.
- The CEO needs to transition from being hands-on to building the company and focusing on areas like building a management team, establishing strategy, and nurturing culture.
- Many CEOs struggle with this transition and can become a bottleneck to decision making.
- The second biggest mistake is rushing hiring decisions and not spending enough time recruiting and getting to know executives.
- These mistakes can set the company back and hinder growth.

Ali Rowghani is the CEO of YC Continuity, where he invests in and advises growth-stage startups. Ali directly contributed to the growth of two great companies -- at Twitter, as CFO then COO, and at Pixar as CFO and SVP of Strategic Planning.

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What are the most common mistakes you have seen growth founders make?

Probably the most common mistake or category of mistakes is due to the fact that sometimes founders don't realize that their job description changes when they go from a smaller company, you know, 10, 20 people who are just, you know, everyone's jamming and trying to like build out the product, to a company that's 50, 100, 200 people.

The job description of a founder CEO changes dramatically as a company changes.

And said simply, in the first phase it's really just about building a product.

And the company's only going to succeed if the product finds product market fit.

And so in most cases the CEOs are involved in building the product, designing the product, selling the product, demoing the product to customers, et cetera, all of the above.

And unless you're doing all of that, you're probably not doing the right thing.

You're not supposed to be specializing or worrying too much about leadership and building a team, et cetera.

Phase 1 is all about building a product that people love and getting an early enthusiast or group of adopters.

And it's all hands on deck, and the CEO is just sort of 1 among many, the first among many when it comes to like building, selling, designing, supporting the product that you have.

But as the company grows and you get to this growth stage, so call it 50, 100 employees, at that stage the company needs real leadership, So the CEO's job shifts away from doing to leading.

And so you have to transition from doing less, you shouldn't probably be answering support tickets anymore, or being the only person who demos the product to customers, or being the primary salesperson, or being the person writing a bunch of code.

And that transition is hard psychically for someone who maybe is really great at writing code and now really shouldn't be doing it anymore.

It's also sometimes jarring to the company.

We're like, wow, you used to be the biggest code committer and now you're not writing any more code.

But at the growth stage, the unique job of a CEO is to build the company.

If in stage 1 it's to build a product, in stage 2 it's to build a company.

And so, as I mentioned, like, you know, building a management team and making sure those people work together, establishing the strategy and alignment around that, and worrying about culture and nurturing that, Those are the characteristics of the job description for phase 2.

So where I see people go wrong or when you have bumpy times, often it's because a CEO doesn't understand that their job needs to change.

They grasp things they shouldn't do and they become a bottleneck to decision making and action for the company.

Probably the second biggest mistake I see has to do with mistakes in hiring and either it being rushed or forced or decisions that are made that end up not working out and setting the company back.

And those mistakes are often made because hiring decisions are rushed and the CEO is too involved in the doing to be able to step back and spend enough time recruiting and getting to know executives.

That I think is the highest correlate to executive hires that don't work out.

So I would say those are the 2 biggest, biggest sort of patterns that I see.


Speaker 0: What are the most common mistakes you have seen growth founders make? Probably the most common mistake or category of mistakes is due to the fact that sometimes founders don't realize that their job description changes when they go from a smaller company, you know, 10, 20 people who are just, you know, everyone's jamming and trying to like build out the product, to a company that's 50, 100, 200 people. The job description of a founder CEO changes dramatically as a company changes. And said simply, in the first phase it's really just about building a product. And the company's only going to succeed if the product finds product market fit.

And so in most cases the CEOs are involved in building the product, designing the product, selling the product, demoing the product to customers, et cetera, all of the above. And unless you're doing all of that, you're probably not doing the right thing. You're not supposed to be specializing or worrying too much about leadership and building a team, et cetera. Phase 1 is all about building a product that people love and getting an early enthusiast or group of adopters. And it's all hands on deck, and the CEO is just sort of 1 among many, the first among many when it comes to like building, selling, designing, supporting the product that you have.

But as the company grows and you get to this growth stage, so call it 50, 100 employees, at that stage the company needs real leadership, So the CEO's job shifts away from doing to leading. And so you have to transition from doing less, you shouldn't probably be answering support tickets anymore, or being the only person who demos the product to customers, or being the primary salesperson, or being the person writing a bunch of code. And that transition is hard psychically for someone who maybe is really great at writing code and now really shouldn't be doing it anymore. It's also sometimes jarring to the company. We're like, wow, you used to be the biggest code committer and now you're not writing any more code.

What do you do? But at the growth stage, the unique job of a CEO is to build the company. If in stage 1 it's to build a product, in stage 2 it's to build a company. And so, as I mentioned, like, you know, building a management team and making sure those people work together, establishing the strategy and alignment around that, and worrying about culture and nurturing that, Those are the characteristics of the job description for phase 2. And it's hard to make that transition.

So where I see people go wrong or when you have bumpy times, often it's because a CEO doesn't understand that their job needs to change. They grasp things they shouldn't do and they become a bottleneck to decision making and action for the company. Probably the second biggest mistake I see has to do with mistakes in hiring and either it being rushed or forced or decisions that are made that end up not working out and setting the company back. And those mistakes are often made because hiring decisions are rushed and the CEO is too involved in the doing to be able to step back and spend enough time recruiting and getting to know executives. That I think is the highest correlate to executive hires that don't work out.

So I would say those are the 2 biggest, biggest sort of patterns that I see. You you

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The Two Most Common Mistakes Growth Stage Founders Make