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What's the meaning of CEO for an Entrepreneur?

This post is not intended for the big shots in Silicon Valley or NY, it is aimed at young entrepreneurs around the world (the real ones who are currently working on a real Startup) so they can understand that this role is as important as other roles in the company and for the good of the position and the entrepreneurs CEO=Managing Director= Chief Executive=General Manager=Principal=President but bear in mind that this does not mean the same thing in a big company, in fact all these roles will appear slowly as the company grows.




Let's start defining CEO, according to Wikipedia is:

“A Chief Executive Officer (CEO) is the highest-ranking corporate officer (executive) or administrator in charge of total management of an organization. An individual appointed as a CEO of a corporation, company, organization, or agency typically reports to the board of directors. In British English, terms often used as synonyms for CEO are managing director (MD) and chief executive (CE).”

As you can see, the term "I am the CEO" sounds good but in reality it is one of the company's most diligent positions.

Now let's review the functions of a CEO (again according to Wikipedia)

“Typically, the CEO/MD has responsibilities as a director, decision maker, leader, manager and executor. The communicator role can involve the press and the rest of the outside world, as well as the organization's management and employees; the decision-making role involves high-level decisions about policy and strategy. As a leader of the company, the CEO/MD advises the board of directors, motivates employees, and drives change within the organization. As a manager, the CEO/MD presides over the organization's day-to-day operations”


Now let's go to the real world of an entrepreneur:

Usually a startup is born with one, two or three founders. In most cases, one of them will be the face of the company and at the moment will become the CEO / GM of the company. For that reason, the characteristics of that person should be:

  • More people-oriented
  • More oriented to sales and commercial issues
  • Dreamer and visionary (I'm not saying that other people are not, I mean a good CEO is like an astronaut: Always in heaven but in constant communication with the earth)
  • Always try to explore new areas / countries / territories / partners / technologies / products
  • Motivator
  • Build strategies (If this person plays Starcraft, much better)

And his responsibilities:

  • Propose company strategy
  • Motivate the company (Or at least try ... just kidding there’s no “try”)
  • Manage business relationships
  • Manage accounts with major customers
  • And do whatever it takes to move the company (this means everything from making invoices, leaving invoices, cleaning, interviews, QA, code, testing and more)

Now, based on my experience, I believe that the main reason why there is a CEO in a company, is because he is the one who must understand and know the dreams of the people who work with him to make them come true. It is also someone who, sometimes, cries silently to keep the spirits up and someone who will eventually put his blood and money to prevent the company from going bankrupt.

I’ll try to list the most difficult things in a CEO's life:

  • Trust in a team member and this one will disappoint you or will betray your trust and you'll have to take control or face the consequences.
  • When something happens let's say... a failure in the development, a bad decision from one of your team members, a mistake on an image or something so simple as a bad written email is most likely that the CEO of the Startup will be the one in front of the client to answer for one of all the above and could sound simple but is not, and it takes a lot of courage to do that (I been there several times... and I know it)
  • Realize that you are not getting paid (that's the worst case and thank God only happened to me once) or realize that your client don't care about you and because of that, your payments will be delay and in (special in some countries in south America) you’ll get pay after 30, 60 or even 90 days and if you don't have enough money in the company's bank account you'll be in trouble  
  • Take decisions without consulting your mentors and realize that you just take the worst choice ever and, even worst, the inversion of the company that in some cases could take the company into bankruptcy.
  • Realizing that because of your lack of experience (what is good until some stage of growing) you didn't put enough effort on the administrative part of the company and that's really important not only for the company but for everyone else.
  • Learning how to involve everyone in to the company's decisions and even harder learn how to recruit new team members because that's key, if you don't have good people you're dead.
  • Failing to someone (employee/client) that trusts you...that's something that really hurts.

Recommendations to the future and actual CEOs

  • Be always honest and transparent with everyone and accept your mistakes.
  • Never end a relationship in bad terms.
  • Learn how to manage your emotions because you represent a company.
  • Try to think ahead of any situation, I try to visualize playing chess in the dark, could sound funny but you must try get as many alternatives of everything in order to be prepare.
  • Do not take a decision that related to money until you have the money on your bank account, for many reasons that transfer could take a lot of time.
  • No one is indispensable, not even the CEO and always build your company based on roles and responsibilities and not in person names. This means a person could leave the company but if you have his responsibilities will avoid in some measure any damage to the company.
  • Plan as big as you can, else why you even bother? Not even the sky's the limit even when people close to you will say the opposite.
  • Being a CEO is a privilege and you exist in the company to serve the people working there, also you must inspire with example and doing what you said and never taking advantage of your rights as CEO
  • Also remember that Founder =! CEO =! employee what I'm trying to say is that even when you could be the founder you are also an employee and if you job is to be the CEO is nothing more than that, so I recommend that you forget that you own part of the company in that way you'll be able to understand more (at least that help me a lot)
  • The only way be a good CEO I believe is to involve everybody in the company and of course for that you need a good team (that's topic of another post) and make them believe that everything they want is possible... that doesn't mean that it will be easy.
  • “Trust me I'm an engineer” says the quote, well, in this case is: “Trust me I'm the CEO” sometimes is really painful and sometimes is nice... well that's life so if you really want to be the CEO be prepare for a journey.

I really hope that this post helps, if you have questions related to the article please write a comment or send me an email I'll be more than happy to help.


Kenneth Lopez

Tekton Labs CEO

Topics: Entrepreneurship, Startup