Back in January, I tried to define my job of Entrepreneur CEO, and… epically failed. Little did I know that it was an actual category of jobs, with very little literature written about it- which is probably why it was incredibly hard to even define what I do (although here is a good article by Mike Myatt about it). Anyway, I thought I would write about what exactly happens in the awkward middle (during the product creation part but before rapid scale up) .
Phase I: Who is Paying you, What are they Paying You For, and Why?
Definition: In the beginning, you’re really just figuring out what 3 basic questions about your product is: Who is paying you, what are they paying you for, and why? It took us 9 months to really figure this out. We had 2 products going: a utility facing information product, and a consumer facing information product. After 9 months, we were gaining a lot of traction on the consumer side, but less so from the utility.
How do you Know you are Successful?: Phase I success means that you have a product, people are paying for it, and you know why.
What is the job of the Entrepreneur CEO?: During this phase, the Entrepreneur CEO is spending most of his/her time actually doing most of this work. 70% of the time is spent on getting results, while the other 30% of the time is spent on thinking about larger structural issues dealing with the next phase. These include: know what things need to be accomplished to move from the second to the third phase, hiring the team to make that happen, making the necessary contacts to scale/hire and making sure we are spending money responsibly, among other things.
Phase II: How to Give More People What They Want
With this new information, we moved into Phase II: scaling the consumer information product. Now that we knew what people wanted, we had to figure out how to give it to them. Instead of innovating on the product itself, we have to innovate on the product delivery and the logistics behind it. From 1,000 customers, we want to get to 20,000. Now there are a lot more questions to answer, but they are definitely easier to answer by comparison. Here are a few samples: How do we attract, retain, and ensure data quality of over 50 valvemen? How do we streamline the process of signing up customers and how do we place them in the correct valve area in a timely manner? And now that we have figured out the business model and the product, we have to raise money to do this on a much larger scale.
How do you Know you are Successful? : Phase II Success means that you are providing the product to a larger portion of the population (in this case, an entire city), and people are paying for it. We have also raised enough money/made enough money to scale to an even larger portion of the population. In our case, success means we have enough money to scale to 8-10 more business units. We still haven’t completed Phase II, but I think we are getting there.
What is the job of the Entrepreneur/CEO?: During this phase, the job description is similar, but less time is spent doing the actual work of Phase II and more time is spent making sure we have the finances for the next phase as well as hiring & allocating resources to most efficiently move to Phase III. Why this shift? For the simple reason that Phase II requires more specialized knowledge, and although the Entrepreneur CEO tends to be the visionary & idea person, they may not be the best person to carry out the specific tasks required to move to Phase III (as mentioned in Myatt’s article). I think a good Entrepreneur CEO recognizes this, and fills the gaps in the organization. Now, this is different if you have a background in whatever specialized job needs to happen (supply chain optimization etc…), but this tends to be more rare (in my case, I am not the best person to accomplish many of these tasks). As soon as the Entrepreneur CEO figures out what tasks need to be accomplished and hires for it, they spend the freed up time looking towards Phase III, and figuring out what tasks need to happen to make that happen. This usually means actually doing those Phase III jobs themselves so that they can write up job descriptions/figure out who they need to hire.
Phase III: Scaling & Moving Towards Profitability
This one may change (as we haven’t entered this part yet), but from what I can tell, this part means that we are moving to multiple cities and we are moving towards profitability. We are actively prototyping more revenue streams to figure out what works and what doesn’t. We are answering more logistic questions that have come up as we move to more cities, and we are also figuring more product/market fits. Phase III is essentially doing Phase I and Phase II simultaneously.
How do you Know you are Successful? : I’m not completely sure, but I think you know if you’re successful if you’re making money by this point. I think this is the point most financial projections start looking like a hockey stick. We don’t really have a hockey stick, but we do start going up here.
What is the Job of the Entrepreneur CEO: This is the point where the Entrepreneur CEO critically looks at whether he/she is the best person to be doing the job of CEO. What will I do? I’m not really sure- all I know is that I will be asking myself these exact questions. I want to do what’s best for the company, and if that means stepping down and taking a different position, then that’s what will happen.
As far as I can tell, this is the awkward middle for the Entrepreneur CEO. Comments/questions/suggestions are most welcome.