What A CEO Does

I am posting this as a MBA Mondays post. But I did not learn this little lesson at business school. I learned it from a very experienced venture capitalist early in my post-MBA career.

I was working on a CEO search for one of our struggling portfolio comapnies. We had a bunch of them. I started in the venture capital business just as the PC hardware bubble of the early 80s was busting. Our portfolio was a mess. It was a great time to enter the business. I cleaned up messes for my first few years. I learned a lot.

Anyway back to the CEO search. One of the board members was a very experienced VC who had been in the business around 25 years by then. I asked him "what exactly does a CEO do?"

He answered without thinking:

A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.

I asked, "Is that it?"

He replied that the CEO should delegate all other tasks to his or her team.

I've thought about that advice so often over the years. I evaluate CEOs on these three metrics all the time. I've learned that great CEOs can and often will do a lot more than these three things. And that is OK.

But I have also learned that if you cannot do these three things well, you will not be a great CEO.

It is almost 25 years since I got this advice. And now I am passing it on. It has served me very well over the years.


#MBA Mondays

Comments (Archived):

  1. DGentry

    Why is it that when a company has an interim CEO and is engaged in a search, so many things seem to grind to a halt? Is it just human nature that we expect the boss at the top to make decisions, when in reality the boss at the top will simply delegate it? Is it that the kind of person who steps up to be an Interim CEO doesn’t want to delegate, and draws those decisions to themself?Edit: I suspect the CEO enables far more activities than they personally take part in. Delegating encompasses a whole range of activities to keep the wheels turning.

    1. fredwilson

      i think the company is marking time during those periods waiting for newleadership to emerge

  2. Scott Barnett

    Fred, when a new CEO comes into a struggling company, how long does she get to accomplish those three things? What other things have you found (consistently) that great CEO’s do?

    1. fredwilson

      it takes six months to get comfortable and another six months to get thingsmoving in the right directioni think a year is good

    2. JLM

      In the turnaround business, everything takes twice as long and costs twice as much as your original estimate. I promise you.

      1. Peter Beddows

        Totally agree with both JLM and Fred.Rather like buying a Fixer-Upper and thinking you can upgrade for just $xxK within say 12 weeks and then flip: Rarely if ever happens the way you think it will or it should because there are always things that are not “discovered” until you (metaphorically) take down the sheet rock and look behind the covers ~ always takes longer and always cost more than you ever might have expected from first review of details.

  3. William Mougayar

    That paragraph quote is so true and on the mark. The last sentence transcends a lot of activities, from fund raising to sound financial management. But I would say that at under 8-10 employees, the CEO/founder does a bit more diversification because there aren’t enough bodies to delegate to.

    1. Henway

      Yup, as CEO of my own startup DailySnap with just 5 employees, I’m basically wearing many hats everyday.. do some coding one day, hiring the next, strategizing everyday… it’s a tough job.

  4. Drew Meyers

    Love this advice — and think you´re right on the mark. Though I´ve never been a CEO, I will be one day.

  5. ExtensionEngine, LLC

    A corollary to “What a CEO Does” was told to me a few months ago by a friend: “What a Board Can Do”: 1) Invest more money (or not).2) Fire the CEO.That kind of wise simplicity makes the rest of a startup’s life a whole lot easier to navigate, in my opinion.Thanks for all of your wisdom, Fred!

    1. Harry DeMott

      I would add 1.5 between 1 and 2 which is:A Board should act as a sounding board and counselor for the CEO in his or her constant refinement of the strategic direction of the company

      1. fredwilson

        yes, but the CEO has to want thatotherwise it doesn’t work

      2. JLM

        This comment is similar to an earlier blog post about the role of mentors and coaches. A good CEO is in constant consultation w/ his own well-developed “kitchen cabinet”. Experts who have been cultivated who answer the classic question honestly.Does this dress make my ass look fat?As big as a freakin’ Duomo, sweetheart!The constant refinement of thinking followed by the minor adjustment of the azimuth is the surest way of staying on course.One of my greatest pleasures in life is testing my view of things w/ folks I consider to be wise, sages and just plain smart.Today I had the great pleasure of having lunch w/ a mentor of mine, a sagacious and wise guy w/ huge business interests in China. I also brought my 24-year old banker son along w/ me and made him listen and participate.It was a just a joyful experience. And great fun. I learned a bit.You are supremely lucky and blessed if you have but a single Board member with whom you can maintain such a relationship. You must invest the time to cultivate such a relationship.

        1. Tereza

          Some things you just can’t tell by looking in the mirror.Someone needs to give it to you straight, and has no other agenda than for you to be better than you are today.

          1. JLM

            Also folks verify that little voice which has been whispering in the back of your head. Guys in particular are trained out of following their instincts. Women maintain that talent.

  6. roshandsilva

    Fred, I like to feel that there is an additional role that good CEOs take on – that of the final authority on product utility, usability and quality. These functions need to be the responsibility of experts but ultimately the buck must stop with the CEO and he cannot run a company successfully if he is not on top of these areas. He should hold a veto on the launch of any product which he feels don’t match up to the standards he would expect in each of these areas.

    1. William Mougayar

      I would agree if in the early parts of a company, and if the CEO/founder is also the product/service visionary, but not after. Better to hire a professional Product Manager to do that.

      1. roshandsilva

        Agree with you William that the role is even more important in the early days of a company. However, lets say I was the CEO of Ford. If I was unable to deliver a great car, could I be doing my job as CEO?

    2. johnmccarthy

      A CEO holds the veto pen on everything that happens in the company. That goes without saying. The good and great CEOs know when to use it and when not to use.

      1. roshandsilva

        Agree John. It’s just that I feel CEOs need to pay more attention to the ultimate customer experience.

  7. Herve Lebret

    I always thought that the CEO role is more about vision than operations, so I agree with you and would even put your “three things” in decreasing (same) order of priorities. That’s also why I thought founders or young inexperienced CEOs were ideal CEOs because/when/if they can communicate their vision and passion, therefore retain talents.

  8. Harry DeMott

    It is great to see a company evolve along with a CEO. What used to be done by the CEO or 1 or 2 others – all of a sudden gets done by a larger staff of others.In some capacity – if the CEO does his or her job well – he or she will ultimately outsource almost all of the initial responsibilities except for the strategy and vision thing.

    1. Mark Essel

      That’s a beautiful way of putting it Harry, Growing into the role as the company ages.How many ceo’s desire nothing more than for their businesses to outlast them? The more I learn the more I respect companies that span a century, it’s truly awesome.

    2. George

      I agree with this 100%… although when I’ve done it (evolved), it occasionally results in weird vibes or backlash from the people who were there at the beginning (eg when there were just 3-4 of us and I did a significant chunk of the day-to-day work).As the org has grown, and I spend more time at exec level/board, on strategy, etc., the team does occasionally ask “OK, WTF are you doing with all your time”. I tend to see that as a failure in communication on my part, but wondering if others have seen similar growing pains and have any ideas…great post and great comments thread

  9. Dan Ramsden

    What say you about Steve Jobs in the context described?

    1. fredwilson

      A++++ on #1A+ on #2and i don’t think a company he has run has ever come close to running out of cashi don’t like the way Apple operates as a company, but i think Jobs is one of the best CEOs of his generation. maybe the best

      1. Dan Ramsden

        Totally. So much so that his eventual departure already raises concerns about the company itself. And I wonder if that should be a #4 on the list of CEO criteria: becoming, within some reasonable timeframe, dispensable. This is a really difficult question though.

      2. awaldstein

        He’s amazing…And he knows what he knows, which is the magic of making tech products that enrich human behavior.And he knows what he doesn’t, hiring the best for ops, purchasing and retail.

      3. Horatiu Mocian

        I think he came near to running out of cash in 1995-1996, before selling NeXT to Apple. Both NeXT and Pixar were losing money, and both companies’ cash positions, as well as his fortune, were getting smaller. I don’t think it was a near-death situation, but it wasn’t far either.

  10. awaldstein

    Fred…close to the definition I’ve carried around with me”Exec with market vision, inspiration and who can manage to a P & L”

    1. RichardF

      Yep inspires (in all aspects of the business) is a special characteristic I believe.

      1. awaldstein

        Not all smart folks with a vision of the market and management chops can inspire though.And in early days of a company, that inspiration not only drives the internal teams and recruiting and fund raising but is often the voice to building early community and attracting enthusiasts.

        1. RichardF

          agree completely Arnold

      2. fredwilson

        the most important of all

    2. fredwilson

      you’ve shortened it to a tweetbrilliant

      1. awaldstein


        1. Pascal-Emmanuel Gobry

          My favorite tweet-length quote about being a great CEO comes from Jack Welch (paraphrasing): “Anyone can manage for the short term. Anyone can have vision for the long term. A great CEO is someone who does both at the same time.”

          1. awaldstein

            Great one Pascal…thanks.

          2. howardlindzon

            love it.

          3. Pascal-Emmanuel Gobry

            Thanks.Serendipity: just read your post on the what a CEO does meme & quoted the “thick skin” part. Hit home for me.PEGhttp://card.biz/peg

    3. Alex Murphy

      This is perfect. There is an important distinction here … you put in manage to a P&L. Ensuring there is cash in the bank does not mean you are managing to a P&L. You could be a great visionary and sell the “idea” that never materializes but still be able to bring in investment income.In my opinion, Managing to a P&L, to predefined goals, to revenue and profit targets, not just for this month, this quarter, or this year, but to ensure growth over the long run is the key responsibility of the CEO.

      1. awaldstein

        Agreed.CEOs build value…and to do that they need to have an eye on the business not just the pitch.

    4. RichardF

      re-blogged for my own future reference, not re-tweeted but worthy of it if I did it 😉

      1. awaldstein

        Glad it worked for you. Thanks!

    5. Ryan P.

      Forgot the part about recruiting

      1. awaldstein

        I’m not a maker of long lists Ryan…Recruiting is key but if you believe (which we all do) that teams win, not people, then this falls easily in line under building a business that is poised for growth.

  11. andyswan

    In other words, you’re not really a CEO until those three things are the three things you’re completely focused on.Until then, you’re a “founder”.p.s. I take back last week’s comment…..I’ve never been a CEO.

    1. Fernando Gutierrez

      Yeah, and to be able to just focus on those things you really need to have already formed a team to take care of the other things… that’s why I think that giving names to positions in a small companies is useless.

    2. fredwilson

      true, but even when you are a founder/CEO, you need to be able to do those three thingsand i’d argue that you need to do them really well

      1. andyswan


  12. GlennKelman

    So concise, so true. “Retaining talent” entails building a great culture and ensuring the company is a place where people want to work hard but it may be worth calling out on its own.

  13. awilensky

    Wow! What a great redesign, is that a template I can steal? Anyhow, on to the topic!I never got a straight anser when conducting due diligence:Diff CFO / VP FinController / ComptrollerGM Fin (gets the cars with Fed $$$??)

    1. Dave Pinsen

      I think a comptroller is a public sector, not business, position.

  14. Satish Mummareddy

    Fred, How do you evaluate a person for those three criteria? Is this only for when you are searching for an experienced CEO to replace a founder or the same holds when you are evaluating a founder?How do you evaluate a younger person (say 25 – 30) years?Thanks.

    1. fredwilson

      i believe a board should always be evaluating the CEOand i think you should evaluate someone younger on the same criteria

  15. morrillkevin

    You probably can’t be a great CEO without these things, but I think there’s more. Leaders like Bill Gates, Steve Jobs, Walt Disney, Jack Welch, Andrew Carnegie and J.P. Morgan all have a rich legacy of getting involved in managing operations beyond just leadership.

  16. Andrea Giannangelo

    Dear Fred, how could a CEO (considered as you suggest) be accepted by his/her employes?I think that in a Startup this must be considered unsustainable.I’ll tell a short story.I’m trying to be a Startupper myself (here in Italy) and I’ve a friend (and roommate) who worked in a promising web Startup for two years. She was fir… ehm, “unconfirmed” in July after a period while she was really hating her job. She was continuously asked to work overtime and the pay was always the same, fastidiously low.”We work in a Startup – the chief said -, and startuppers must work overtime!”.But this is not the main reason because she began to hate her daily occupation – something able to make your life horrible. The main reason was the CEO (who was founder, too).He did (and does, because he’s still there) exactly what you suggested: manage and rest, without seriously contributing, having the only care to keep his hands clean.To my friend (and to the rest of the employes), this attitude had become intolerable, especially every time that there were overtimes to offer for free, overtimes imposed from one who simply looked – to them – otiose.In the meantime something started to go bad, while the money was ending. I don’t think that the promising startup will last, but it taught me much.This is what I learned. Manage and rest: your team will hate you.A top-down approach generates conflict, and it will always do. The approach you suggest could be good – perhaps – for a big and structured company; it’s not definitely good in a startup, where I like a CEO who’s always on the front.Thanks for your time,Andrea Giannangelo

    1. CJ

      There is a certain merit to leading by example. If the company is tiny and everyone else is working overtime, so should you. If only for solidarity. However, if you don’t have any skills to contribute the best you’re doing is buying takeout for everyone else who are actually working. What’s worse, you’ll tend to get in the way of real work with questions, comments, engaging people in conversation who would otherwise be hard at work. There is a line between moral support and distraction, especially in a tiny company with a CEO who doesn’t do much work that requires in-house overtime.

      1. Fernando Gutierrez

        If people need to see you there to stay themselves is because they are not enthusiastic about what they do. You either:a) screwed recruitingb) or screwed keeping them engagedAnyway, if the company is to tiny that the ceo can do nothing I’d say he is not a ceo. As Andy said before, he is just a founder.

        1. CJ

          Well – it’s not to say that he can do nothing. It could be that he’s raising money or he has contacts with business that will become good customers, in either case his job doesn’t require him to stay much past 5, in fact his job might require a lot of smoozing after 5 outside of the office. I agree about the second part, he’s probably a founder and not the CEO in that case, but I think the point remains.

    2. brmore

      Wow, I didn’t see anything about resting in Fred’s words. Sounds to me like this CEO should be working on #3 and maybe #2 … no resting, ever.

    3. Aaron

      See rule above, “Lead by example”.

    4. Leonid S. Knyshov

      And I will argue that overtime is completely unnecessary.Overtime is the result of setting unrealistic goals given available resources. The deadline as set becomes unattainable and requires more resources that are available. Humans are capable of adding extra time beyond 8 hours. The problem with that is that expecting additional output for the same compensation tends to generate dissatisfaction.Abusing that emergency capability is simply not sustainable as people get tired and start making mistakes. Additionally, personal relationships suffer, which can introduce distractions even while the person is not physically tired. Dissatisfaction over a period of time translates into depressed morale company-wide.We have project management tools that should make overtime completely unnecessary. I use them. Set realistic deadlines (how long realistically would it take you to build feature X a team leader should ask his team) and let your people enjoy their work. It may take some extra time to finish the product, but the results will be better. The gains from slavedriving are not very significant and come at a tremendous cost.

  17. RJ Johnston

    I love the insight, your blog is now in my one of 3 must reads before I mark all read in Google reader :-). Thank you.

  18. LIAD

    …and you said last week you weren’t a CEO

    1. fredwilson

      i don’t think i amand it starts with what you believe about yourself

      1. Alex Murphy

        Do you set vision? Do you recruit great talent for your firm? Do ensure there is enough cash in the bank?

  19. akharris

    That “communicate with stakeholders” seems to have become a much fuzzier picture in a number of places. There is a demarcation between the community engagement/social interaction requirements met by the employee running a company’s social media campaign, and the major move, overall direction communication provided by a CEO to the board, on conference calls, to investors, etc.That’s an important difference, and it strikes me that an organization had best delineate between the two forms. They have different formats, styles, and intents – and require a different set of skills. Your CEO may very well be able to do both, but he had better carefully consider the message and audience and choose his tools appropriately.

  20. Youssef Rahoui

    Really great advice, thanks!I would have a slightly nuanced view for the third point. “Makes sure there is always enough cash in the bank to execute the strategy”.

  21. Anonymous

    Great post. My politics may be different from yours, but if the role of President is like that of CEO… Obama has three strikes.Has he sets the overall vision and strategy of the country? FAIL (Far too many “top priorities”.)Has he recruited the best talent? FAIL (Too many academics… And too many life-long politicians.)And has he ensured that there is always enough cash in the bank? FAIL (Just look at the debt and deficit.)

    1. fredwilson

      i’d say the same is true of Bush and many other recent presidentsthe only president that did a good job of this in my lifetime was Clinton

    2. Alex Murphy

      If the entire town is burning you have too many top priorities. Obama was not dealt this hand, he willingly walked into the fire and said I will work on putting them all out.You’ll get a lot of disagreement on the top talent comment. But, I would start with the fact that he kept Gates on from the Bush era which was a big win on the retention line and brought in Paul Volcker who has been given credit for engineering the US economy out of the the stagflation economy of the 1970s and server for 7 years during the Reagan Administration.Our debt cycle has been growing and growing. At no point has the deficit grown like it did from 2001 to 2008. That is not Obama’s fault and it wasn’t entirely Bush’s fault either. Bush didn’t cause the stock market bubble and 9/11 certainly wasn’t a help for him either. There is a lot of mis information and predictions based upon incomplete data about what will happen in the next 4 to 6 years, but there is one thing that is certain, if consumer confidence goes up because consumers are less concerned about their house values declining or what will happen if they get sick then the economy will grow, more people will start companies, and more people will find work. The jury is out on that. In the mean time, GM is going to go public and pay back the Gov’t, Tarp is being paid back, and there is less concern about money in the bank today than there was 18 months ago when Obama started. Seems like a victory to me.

      1. Dave Pinsen

        “At no point has the deficit grown like it did from 2001 to 2008.”Obama will have borrowed more in the first two years of his administration than Bush did in all eight years of his. Before the financial crisis hit, the deficit during the Bush years had peaked (at under $500 billion) in ’04, then steadily declined in ’05, ’06, and ’07 before spiking up again to around the $500 billion range in ’08. Obama’s deficit in his first year in office was $1.4 trillion, and the Obama administration’s own forecasts expect it to be even higher this year.Compared to Obama, Bush was a piker when it comes to deficit spending.I will say this, though, in regard to Bush: the decline in the deficits from ’04 to ’07 was likely due largely to the credit bubble fueling tax receipts, similar to how the surpluses at the end of the Clinton administration were largely due to the tech bubble (even the Clinton administration’s own initial projections hadn’t anticipated a surplus).

        1. Alex Murphy

          First, I voted for Bush, twice. I also voted for Obama. But facts are facts.National Debt on Jan 20th, 2001 = $5,728,195,796,181.57 (Bush’s Inauguration)National Debt on Jan 20th, 2009 = $10,626,877,048,913.00 (Obama’s Inauguration)National Debt on Aug, 26, 2010 = $13,376,189,739,693.60Source = http://www.treasurydirect.g…The increase during Bush’s Presidency almost doubled the debt. The point here is that during the last 12 months of Bush’s term, the increase in the debt was 15.6%. The increase in the debt over the last 12 months (Aug 26 ’09 to Aug 26 ’10) was 14.2%. This is still horrible. The burden of the national debt is something that too may people “write off” as being unimportant. While it is ok to carry some debt in the interest of growth, it is not a good life style choice and it is transferring our wealth to other countries. So, I am not saying that the continued spend spend spend is ok, I was simply putting the original comment into context to say that Obama has not Failed Failed Failed. He is dealing with a huge situation. Maybe he is not dealing with it fast enough, but he is dealing with it.

          1. Dave Pinsen

            Alex,Who you voted for is irrelevant to our discussion. And you are shifting the terms of the debate. Your initial comment — the one I responded to — referred to the growth of the deficit, not the debt. I refuted it, showing that Obama’s deficits (his first actual deficit and his administration’s projections for the next two) are far larger than the biggest deficits during the Bush years.As far as the federal debt goes, it remains to be seen by how much it will increase during the time Obama is in office, but his own administration’s projections and those of the CBO are not encouraging. Also, it’s worth noting that what matters more is debt as a percentage of GDP, rather than absolute debt (i.e., an increase in government debt is manageable if GDP increases at a faster rate). On this score, things don’t look promising either.

          2. Alex Murphy

            I only included who I voted for so as to show that I am not leaning in one direction or the other, you know, transparency.Budget Deficits and Surpluses drive the National Debt, thus they are interlinked.Yes, debt as a percentage of GDP is important, but debt as an absolute number is critical. Countries with a surplus, in other words “wealth” are in a position to positively affect the standard of living of their citizens in ways that countries that are in debt are not. This basic principle is true for countries, companies, and individuals. Debt is a burden.As Mike pointed out, how much of the current deficit is Obama’s fault per se. The jury is out on what Obama’s policies will do from a macro point of view and thus what the impact will be in years 3 4 and beyond. From 2001 to 2009, the decline in the annual deficit was over $600 MM, almost 5x GHW Bush, almost 8x Reagan. It is too early to say what Obama’s legacy will be, perhaps it will exceed Bush’s, the most recent signs show that the situation is getting better in the last 12 months as the debt is starting to grow at a slower pace.Current CBO projection: http://cbo.gov/ “CBO estimates that the federal budget deficit for 2010 will exceed $1.3 trillion—$71 billion below last year’s total and $27 billion lower than the amount that CBO projected in March 2010.”

          3. Dave Pinsen

            “Budget Deficits and Surpluses drive the National Debt, thus they are interlinked.Fine, but when you switched from deficits to debt, you compared the growth of the debt over 8 years of the Bush administration to a year and a half of the Obama administration — not exactly an apples-to-apples comparison. “the most recent signs show that the situation is getting better in the last 12 months as the debt is starting to grow at a slower pace.Current CBO projection: http://cbo.gov/“CBO estimates that the federal budget deficit for 2010 will exceed $1.3 trillion—$71 billion below last year’s total and $27 billion lower than the amount that CBO projected in March 2010.” Even the Obama administration isn’t claiming that. The White House just upped its 10 year deficit projection by $2 trillion. The reason why the CBO’s projection is lower is that the CBO projection assumes that all of the Bush tax cuts will expire at the end of the year, while the Obama administration has said it wants to extend all the Bush tax cuts except those on the highest earners (even though 75% of the deficit impact of the Bush tax cuts comes from ones the Obama administration wants to extend).

          4. Alex Murphy

            I brought debt into the discussion because it is real time data. We can measure the actual debt as of last Thursday and for the prior 12 months. I wasn’t trying to debate the future or claims of what will or won’t happen, just the actual data points of what has happened and where we are.My original comments were focused in on the Fail Fail Fail statement that the original commenter put in. I am not trying to debate with you, I am nervous about the future too. I am just tired of reading posts by people that say Obama is Failing. Obama is dealing; could he be dealing with the situation better, perhaps. Could things be worse? Perhaps. We are where we are and the negative jabs just don’t help. We need more inspiration and “can do” attitudes.

          5. Dave Pinsen

            Alex,You attempted to compare Bush’s deficits invidiously to Obama’s, and I called you out on that. I didn’t engage in any of your broader comments about Obama’s performance.Regarding those deficits, a picture is worth a thousand words (and before you or someone else attempts to dispute this chart because it was prepared by the Heritage Foundation, note that the data for the chart comes from the CBO and the Obama White House’s Office of Management and Budget.) http://blog.heritage.org/wp-content/uploads/oba

          6. Alex Murphy

            Dave, you are mistaken. I was responding to the original comment:”And has he ensured that there is always enough cash in the bank? FAIL (Just look at the debt and deficit.)”My point is that the debt and deficit growth started under Bush and that Obama stepped into the preexisting flood and to date has been able to make a really bad problem a little less bad. I purposely am not using forward looking data because it is often misrepresented by organizations with a political slant, such as the Heritage Foundation.As I stated in my original comment, I wasn’t laying the blame for this situation solely at Bush’s feet either, I was simply stating the fact that Obama hasn’t failed. The future hasn’t happened yet. Whether its Obama or Bush, the Tech Bubble or the Housing Bubble, Greenspan or Bernanke, we have too much debt. Whether you look at it in terms of % of GDP or as an absolute number. That is the fact and the reality is that nobody in a position of power seems to worry enough about it in my opinion. Last comment, we need more energy focused on what to change to make the future better rather than on what the future “will be” based upon unknowable assumptions.

          7. Dave Pinsen

            Alex,This will be my last comment in this exchange because it’s clear by now that you will not acknowledge that this statement of yours,””At no point has the deficit grown like it did from 2001 to 2008.”Is belied by the facts (that the deficit actually declined from 2004 to 2007; that the deficit in 2009 was more than double the size of the largest Bush-era deficit; and that — by the Obama administration’s own projections — the deficits this year and next will be similarly huge*).And by the way, this,”I purposely am not using forward looking data because it is often misrepresented by organizations with a political slant, such as the Heritage Foundation.”Is a red herring. Taking data from the White House’s OMB and the CBO and putting it in bar chart form isn’t misrepresenting it. Last year’s chart from the Washington Post showed similar deficit projections, using the same OMB and CBO data: http://media-files.gather.c…I would have preferred to use a 2010 version of that chart from the WaPo, but I couldn’t find one.*The Obama administration itself just estimated that its deficit for this fiscal year (which ends September 30th) will be $1.58 trillion. And regarding your other comment, asking if I was aware that the Bush administration had some impact on the 2009 deficit, yes I was aware of that. Since the federal government’s fiscal year ends in September every year, but new presidents don’t get inaugurated until Jan 20th, spending that occurs between September 30th and when they get inaugurated counts toward their first year’s fiscal deficit (or surplus). Shortly after Obama came into office though, he passed the largest fiscal stimulus in history, which significantly added to the 2009 fiscal deficit.

          8. Alex Murphy

            Dave, the date is clear. Analyze it yourself. The National debt grew during the last 12 months of the Bush administration by more than it has in the last 12 months ending August 26, 2010. That means the current budget deficit is lower than it was when Obama came into office and was dealing with the last Bush budget. I would rather get the raw data and do the analysis instead of taking prepared graphics by organizations with a political agenda. Have a great day.

        2. Mike

          Not necessarily a fan of either, but I’m curious as to how you can arrive at this conclusion when it’s been widely reported that this is not the case. For example:http://www.nytimes.com/2009…I hope this doesn’t sound condescending. I’m generally curious what the evidence is that the bulk of the current deficit is indeed Obama’s fault. Does that include extending Bush era policies?

          1. Dave Pinsen

            Mike,You are responding to things I didn’t write. Please feel free to read my comment again and respond to what I wrote there. If you have a comment about what I actually wrote, I’ll be happy to engage you in a discussion about it.

          2. Mike

            Perhaps “fault” was the wrong word choice, as I may have assumed you were saying something other than what you intended. This is what I was responding to:”Compared to Obama, Bush was a piker when it comes to deficit spending.”

          3. Dave Pinsen

            The sentence you quoted just means that Obama has been a much bigger deficit spender so far than Bush, which has been the case.

          4. Mike

            I completely understood what you meant. My original comment was intended to point out that this is a mistaken assumption as the article I linked to pointed out.

          5. Dave Pinsen

            That Obama’s deficits (his first actual one, and his own projections for the next two) have been far higher than Bush’s deficits isn’t a “mistaken assumption”. It’s a fact.________________________________

          6. Alex Murphy

            Dave, do you realize that the FY 2009 budget was prepared by George Bush’s team and that the first year of Obama’s term was determined in part by the existing budgetary plan that Bush put in place? http://www.america.gov/st/u

  22. Anurag

    As close to a perfect definition as it gets.Fred, can you throw more light on how do you attract and retain the best talent in one of your MBA Monday’s? This is always a very real issue for startups.

    1. fredwilson

      i might need a guest post since that is the CEO’s job, not minei have a person in mind for it

    2. JLM

      You have to be unafraid to hire folks who are better than you. Coldly, unabashedly unafraid. Like an assassin. You have to step outside yourself.You will ultimately love yourself for doing it because you will have no work to do, if you do it right. That is a great pleasure and luxury.Recently I have hired three West Point MBAs (one was Marine officer) who had just gotten out of the military because they are just worn out from the constant deployments, stress and, oh yeah, combat.These guys are so good, it is scary. They like any job which does not include incoming mortar fire.I am in the process of hiring three more to fill out my management team.You have to look in funny places. You have to develop a world class interview technique and to work the deal. Hard.

      1. Peter Beddows

        Totally agree: We always need to ADD to and EXPAND our (both our own and our team’s) base of knowledge, experience, skills and capabilities; not to dilute it which would be the outcome if we were to create a team of carbon-copies of our self or of “ghosts” (less-capable) of our self.There is always something new to be learned and we cannot ever afford to be so egotistical as to believe “we are the smartest and brightest” without, in that very process, actually proving to others that in fact we are not so smart. On the contrary, you prove your own “smarts” by hiring smarter and better-capable people than yourself in relative terms for specific responsibilities.It is also perhaps ironic that ex-military officer’s such as JLM describes more often than not can be the most effective team-players and business people you could hire because few else in today’s world have had to actually perform disciplined real-time people, resources and logistics management under such demanding, real-world situations: A great resource upon which to draw.

  23. abbashaiderali

    As a company grows, only corollary I would add to the description is that the CEO should start focusing on hiring talent that can attract talent themselves for their respective teams. At that point the CEO becomes a closer for a lot of hires rather than the primary magnet.Abbas.

    1. Fernando Gutierrez

      I’d also add preparing the company for his departure.

      1. Connor Murphy

        Hi Fernando – Wouldn’t that be covered by #2 and #3

  24. Laurent Boncenne

    Some of your posts should be framed Fred, seriously.tho I’ll have to agree with some commenters that you ought to do a bit more than that when your startup is really only you and 2 other guys…

    1. Mark MacLeod

      I think the term “CEO” should not apply at that stage. Just be a founder or co-founder. Anoint yourself as CEO once there is an actual company to run

      1. Alex Murphy

        I think CEO = Leader. Leader means come follow me. That applies with 2 or 200 people. You just have different challenges at different sizes of companies which often means that the CEO for a company of 2 will be a different person then the CEO for a company of 200 … even if it is the same company.

      2. Kelley Boyd @msksboyd


      3. Donna Brewington White

        I had two clients who were founders in the same investment portfolio and would not take the title CEO — but rather president. Thought that was interesting at the time, but knowing what I now know, I understand.The biggest challenge was that they also wouldn’t hire “Vice Presidents” which gave me the difficult job of convincing people (1) to move to a startup and (2) to go from VP to Director title.What did work well though is that when it was time to hire a CEO, the founder could still remain as President.

        1. JLM

          Pretty damn………………………………………………………………………..shrewd!

        2. Peter Beddows

          That is really, clearly and thoughtfully thinking ahead ~ as well as rather unusual because choosing to accept such roles from the outset flies in the face of the more common ego-driven pattern. This longer range planning approach to staffing beautifully enables founders as co-presidents to drive the start-up in the direction of their vision without compromising their own relative positions in the future structure of the business as it develops. It effectively keeps future staffing options open even for them by keeping the upper and relative position staffing doors open for bringing in the brightest best-fit candidates at the appropriate time; one of the founders in that time frame quite possibly then being found to be the fittest candidate for CEO but neither losing out if neither is such a fit in the long run since they would otherwise remain in a strong position of influence in their own company.

      4. Laurent Boncenne

        something went wrong with disqus and I’ve only seen your answer one week later… go figure.thanks for your input, I thought the same when I wrote my answer.Cheers.

    2. fredwilson

      yes, i agree with them too

  25. brmore

    Maybe we could add an temporary / interim duty … clean up the mess made by the previous CEO. Put the cart right.

  26. LoJo_100

    Great definition. It was when my focus shifted to these three areas that I changed my title from Founder to CEO. There was actually a specific situation that caused me to think about all three of these items and forced me to make a tough, but necessary, decision. It made me realize that I’m doing more than building a product… I’m running a business.

    1. fredwilson

      such an important realization

  27. Dave Pinsen

    Doesn’t a CEO — particularly in a start-up — also need to be able to sell (to occasionally help close deals with large corporate clients, and to pitch investors if the company needs to raise additional funds)?

    1. awaldstein

      Yes and yes, I would say Dave.But not everyone can do everything well and it’s super difficult to build the product and raise funds at the same time.Friends who are start-up CEOs with DNA on the product side all invested early in a smart financial person who can take the lead in raising the funds, modeling and often, operations. There’s a new breed of financial folks who can bridge financial, HR and ops.

    2. Aaron Klein

      Indeed. I thought the title was Cash Extraction Officer. 🙂

      1. Alex Murphy

        That is part of ensuring there is enough cash in the bank.

        1. Aaron Klein

          True…but I hope most see it that way and don’t just think about raising capital. A CEO has to be deeply involved in sales in most startups, imho.

      2. Mark Essel


  28. Damien P.

    Thanks for your post. That’s the first time i come to your website and i found it great !

  29. johnmccarthy

    Useful 25 year old advice, which had probably been passed down to that board member by someone else who had gotten it from someone else, and so on. Nice reminder that good ideas are timeless and that there are a core set of tools which anyone in business needs to be aware of and conversant in. That has been the basic theme of MBA Mondays and that while the tools we are using today are new, shiny and fun, that underlying everything are some core concepts and principles. Forget them or struggle to re-invent them at your own peril.

    1. fredwilson

      great way to think about MBA Mondays Johnthanks for putting it that way

  30. Brian Posnanski

    A succinct mnemonic – definitely something I’ll keep in my own hip pocket!Would love to see someone take a shot at a similar definition for CMOs — perhaps the second most beleaguered position after CEO.

  31. Mike McGrath

    Agreed, but only after a company gets to a point of say 10+ employees. Until then your hands are in a lot of baskets.

    1. fredwilson


  32. Mark Essel

    My translation: a CEO is a master salesmen1) selling a product that cannot be made, selling a service that cannot be provided, a vision is something that has to be described and sold to business owners before it is ever realized.2) selling the opportunity of taking part in a legendary business to the brightest and most fanatic team3) selling the product/service and everything else, including shares in the business to keep capital flowing into the business.

    1. fredwilson


  33. Prashant Sachdev

    I think this definition of CEO applies to a growing company – that I can’t define the stage accurately but may be one that has already passed break-even point or has got a “cash engine” in place.Early stage CEO is quite different and it could be that CEO as explained in this post might not be required. Early stage CEO takes care of validating business model and getting customers on board. While early stage CTO takes care of having best talent (this applies in technology company).

  34. Venkat

    I am very interested in the talent question too. It seems to me to be by far the hardest one. In order of difficulty, I’d say talent>money>vision. Perhaps because founders learn the skills in the order vision first, followed by money hunting, followed by talent hunting.I am particularly struck by the difficulty of hiring into the very fluid and hard-to-define “pre PMF” roles. Tech is somewhat manageable. But things like customer discovery require a very curious mix of marketing/sales savvy, experimental personality, and a swiss-army-knife ability to do all sorts of new-fangled things like SEM, A/B testing etc.I’ve found the following to be true except in VERY rare cases:1. “Classical” marketing and sales people just aren’t experimental enough or creative enough in looking for “fit” hypotheses. This is exacerbated by the fact that they don’t really understand tech in depth, or get any of the tech-fueled methods like SEM, online A/B tests with landing pages and AdWords etc. To be constantly creating and tweaking fit hypotheses, you need a depth of business/product knowledge that these people typically lack. You also need an element of product visioning capability, since you are dealing with a minimum viable product and must be able to talk “complete vision” with users.2. OTOH, the SEM/landing page/AdWords hackers usually write terrible copy from a human perspective, don’t understand classic positioning theory at all, and often get face-to-face human psychology wrong.3. People who write good copy don’t get Web analytics, and vice versa.This makes it VERY hard to find single multi-talented people who can really drive CD. You end up having to either a) doing it yourself (i.e. it is not easily delegate-able) b) hiring multi-person teams, which pushes up burn rate (even if you get 2-3 parttimers, the team comm overheads add to costs).The problem is relatively easier in enterprise, where there are plenty of experienced enterprise sales people, for whom every big contract is an exercise in CD (many consulting company veterans are good at this). But for consumer/SMB the talent is hard to find.This problem is severe enough that I’d say customer development is also one of the functions of at least a pre-PMF CEO. The talent is just too thin on the ground.For the record, I am not a CEO. I am an EiR at a big company, but I find myself dealing with exactly these problems.

    1. ShanaC

      I still think these are trainable qualities- It’s like yoga- you can train people to be flexible, it is just painful at first.I’m also in JLM’s camp, not every business will need every one of these qualities to succeed- choose wisely what methods (and I think that’s the utmost form of creativity)

  35. howardlindzon

    Got to be the best salesman thew company has. period. At loeast in a start-up but I guess CEO does not mean much that early.

    1. David Semeria

      So Howie, how’s dem speed typin’ classes going ?

  36. Mike Hart

    Perhaps it is implicit in the definition of stakeholder, but the care and feeding of the board of directors is a huge component of the CEO’s job that shouldn’t be minimized.

  37. Glen Bressner

    I agree with these three, but highly suggest a fourth: CEO’s also need to sell.

  38. ajaimk

    Hmmm. I wrote a somewhat similar post a while back. More often than not these things seem pretty obvious but they do end up become hard to learn lessons.

  39. Doug Covey

    Spot on advice, the vision/strategy made me think of Joel Barker’s quote: “Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world.”I’m always intrigued on historical advice which is still very relevant to our times no matter the worldly changes that has happened in-between.Thanks Fred –

    1. JLM

      Great quote. Insightful. Thought provoking.

  40. Kamil Rudnicki

    Very good sum up. But I think the smaller company is, the more time CEO should do things and less things you described in this post. But never forget about them! Thanks.

  41. Drew Meyers

    This is kind of off topic — but have you thought about turning all these MBA Monday blog posts into an actual book? I’m guessing, among the AVC community, everyone could pitch in and merge the blog post & comments to come up with one fantastic article for a physical (or electronic) book on each topic. And, knowing you, I’m guessing you’d donate all the proceeds of the book in any case — which would be a fantastic thing. I’d be willing to spend some time helping out if all the proceeds of the eventual book went to charity.Give it some thought 🙂

  42. lindsayronga

    with regards to the recruiting piece — hire people who are smarter than you. don’t be afraid.

  43. knowledgenotebook

    Not surprised at the 3 cores (vision & strategy, talents and finance) of a CEO, unfortunately as a start-up entrepreneur, I don’t have the luxury of not doing the execution part myself… but you never know things could change quickly…

  44. Shaival Shah

    Nice post, Fred. One thing I would add from the perspective of an employee … when evaluating a CEO to work for, his/her ability to determine if a strategic direction is likely to succeed or fail before the outcome itself. And the ability to pivot direction without being emotionally connected to the original direction. This may be a technique to your 3rd point of preserving cash.

  45. mikemore

    Great post and I agree with the overall job description. I would add one tweak.” A CEO has passion for the vision of the company”Managing the CF,creating and executing near term goals and recruiting talent are functions of a job most executives with a general knowledge of business are capable of.Passion is something you have our you do not. I think passion added to being able to execute the basic functions of a CEO is what helps drive companies over the finish line.

  46. daryn

    Is the CEO responsible for the company’s execution?With your three roles, the CEO has set the stage for success, but who is on the hook when it doesn’t pan out as planned?

    1. Drew Meyers

      The CEO is on the hook, but is still only as good as those he delegates work to — which is why attracting top talent is so crucial to their job duties.

      1. daryn

        Agreed. If the team is right, and everyone is executing to their fullest without success, than it comes back around to the CEO to steer the company in the right direction.At the same time, I don’t think the failure of a company necessarily means the failure of the CEO, what do you think?

        1. Drew Meyers

          I don’t think the failure of a company always means the failure of the CEO — but the CEO unfortunately bears the brunt of the blame in most cases anyway. Good CEO’s take the blame even when it’s not their fault — shielding your employees is part of attracting top talent. If the CEO just blamed everyone else for all problems that arise, no one would want to work for them.

        2. JLM

          Never, ever take counsel of your fears. They will find you and, if strong enough, will kill you.Never, ever be afraid of failure. It will find you and, if strong enough, will kill you.If you give everything you have to an enterprise and you are brave enough to be tested and stand naked to be judged by the results, then you will ultimately emerge stronger even when you are lying in your own blood. What does not kill you, strengthens you.Life is a campaign, not a single battle and you should not be afraid to retreat and then attack or to attack and then retreat. When the opening presents itself, go in for the kill.There is no greater fun than saying — I voluntarily allowed myself to be tested to my limits and found out they were far greater than I ever thought. We are often our own greatest limitations.

      2. JLM

        Good CEOs attract talent (athletes) and then train them for the position that needs to be played and then makes a team of the whole lot of them and then coaches up the team and then executes the game plan.Attracting talent is just the first step.

  47. Jim Posner

    Carly Fiorina had some interesting comments on the deltas between running a company and running the country, not that she knew much about either, but her comments did spark some interesting conversations about CEO skill sets.

  48. Francis Moran

    Hi, Fred.I have long done a presentation called “Francis’s Favorite PR Fictions,” in which I debunk some of the myths surrounding public relations. The subtitle is “Everything I know that’s wrong about PR I learned from technology company executives.”Where am I going with this?All my favorite fictions are direct quotes from C-level technology company executives. One, from a CEO, is, “I do all my own PR.”In keeping with your what-a-CEO-does philosophy, if “doing all my own PR” is part of a CEO’s personal job description, then that guy is not doing a CEO’s job. In fact, when I present, I tell the audience that if they own stock in a public company whose CEO says something like that (And the CEO who said that to me headed a publicly traded company!), then run, don’t walk, to your broker to place the sell order.My point is, if a CEO is so distracted from the strategic vision-setting and the two other critical functions you list as to be mucking about in the tactical implementation of PR and messaging, then that company is probably doomed.-Francis.

  49. JLM

    Obviously having been a CEO for over 30 years, I have had ample time to think about what it takes to be a “good” CEO.I agree with what Fred says — completely — from the perspective from whence he speaks as a Boardmember and an investor. It is a however a bit formulaic and simplistic — not in a “bad” way but in an Executive Summary kind of way.I have been a CEO of fairly large private and small public companies. In multiple industries. Companies which were stable and ones which were growing and ones which were terminal. I have started companies, bought companies and sold companies. I have tickled companies out of the bassinet and I have drowned a few in the bathtub.I write to you not as someone who is “observing” but rather as one who is a practitioner. Who has made just about every mistake possible but has made it to the pay window enough times to make it all worthwhile and who has found a few ideas that work and enhance the probability of making it to the pay window again. I have hit a few good licks.The CEO has to be a leader in the context of leaders being folks who get organizations to places they would never get by themselves. He has to want to be a leader. He has to be comfortable being a leader — or able to deal with the attendant discomfort gracefully. He has to be able to say — “I am responsible for EVERYTHING that happens or fails to happen at this company.” And then make it so and believable and live it.Let’s not bullshit each other — the most important characteristic of any CEO is to be a moneymaker. It is not particularly dignified to say it that bluntly but you can sugar coat whatever you want and it all comes down to “can you ring the bell.”The CEO has to set the tone of everything — big and small by the values he projects, by the way he conducts himself and by the he deals with everyone and everything. The CEO has to go to the trouble to formulate these values in a concrete way. I have a little booklet which I have developed over 30 years which quantifies the values I am looking for and I personally give it to every new employee their first day of employment.The CEO has to set a vision for the company. Commit it to writing. Argue for its attainability — even when it is seemingly nuts. This is the FIRST sale that any company has to make. It has to sell the idea for its own existence.The CEO has to be a good thinker, a better writer and a powerful communicator. When a CEO gets done communicating — you have to believe you really could bite the ass off a bear. Guess what, you could!The CEO has to tranform the idealistic vision into bite sized specific objectives which are SMART — specific, measurable, attainable, realistic and temporal. How do you eat an elephant? ONe bit at a time — the CEO has to hack off the first bites for the rest of the executive staff.The CEO has to organize the functions of the company to provide a logical way of accomplishing the vision both through the objectives noted above but also by talking folks through their respective duties. By coaching his subordinates to execute at a high level of competence and excellence even — especially — when the fledling efforts are terrible. This is particularly true in new companies.The CEO has to be a trainer able to train folks — different than coaching which is primarily mental — to discharge their duties. When you hire good experienced folks then all the CEO has to do is document what is going to be done rather than training them as to what to do.The CEO has to be a disciplinarian and has to invoke accountability within the organization — not a raised voice stinging kind of discipline but rather a “you have to eat your vegetables” kind of discipline that says not only is this a good way to do things, you have to do it this way because we are in a competition to win. Discipline means — in it, to win it.The CEO has to recruit, inspire and drive talent to levels of personal and team performance that exceed the expectations of the practitioners themselves. He has to remember that there are cycles of energy and that you have to find the right time to make things come together particularly when dealing with a team and team building. You do not produce Rangers in a long weekend and a company offsite is not going to transform your company from good to great. You have to be patient and painstaking. You have to be wiley and canny and sly.The CEO has to be able to reduce what the company does to logical processes (SOx 404 type process thinking) that can be documented, understood, streamlined, lubricated and improved. But you have to start w/ identifying and documenting the most important processes.The CEO has to force the company to be “customer centric” and focused completely on from whence the cash flows. You cannot tolerate a single disparaging comment about the customers.Most importantly — the CEO has to face down risk with a steady gaze which inspires confidence amongst the executive team. “Well, if he isn’t scared, then I guess I shouldn’t be scared.”All of these things are subsumed in Fred’s comments, there is no original or opposing thought intended to be expressed but like everything else — the Devil is in the details.

    1. RichardF

      Another great blog/comment, so good that I re-blogged it for my own future reference. Thx JLM

    2. David Semeria

      Above all, a CEO *MUST* lead by example.

      1. JLM

        David, you are my new hero and exemplar. To be able to live in Italy and speak English and Italian is what I want to do. I just spent a couple of weeks in Rome, Amalfi, Positano, Nocello, Novella, Siena (saw the Paleo, wow, and had dinner w/ the winning contrada (Tortugas) the night before the race), Assissi, San Gimingnano, Firenze!You are the king!

        1. David Semeria

          Yes, JLM, Italy can certainly have an enchanting effect on people who appreciate beauty, fine things and passion.Unfortunately, the country is in a constant, and seemingly irredeemable, state of chaos. Many Italians express genuine amazement that anyone would actually choose to live here. And in a unlikely, and extremely tenuous, segue back to today’s topic, it would appear that Italy is like an eternal startup: where pandemonium masks, or even facilitates, innovation.Orson Welles captured this notion in a speech from the film The Third Man:In Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace – and what did that produce? The cuckoo clock.Even more paradoxically, the state of Italy has never had a strong CEO, à là Churchill, Roosevelt or, De Gaulle. And yet it continues to lead the world in many industries.If a country can succeed without a good CEO, perhaps a company can as well…As regards your trip, knowing what I do of you from your comments, I’m sure you were captivated the spectacle of the Palio – a frenetic and pulsating bareback horse race in a beveled cobblestone piazza the size of half a football field . The setting and the race itself have not changed at all in the last 350 years…As for the being the king – thanks very much, but we all know that title applies to one man only: Elvis!

          1. Tereza

            So Berlusconi….doesn’t lead by example?:-)

          2. David Semeria

            Good point!The answer goes to the very heart of the problem – and which is too long to explain here in detail.In extreme synthesis: Silvio Berlusconi came from a modest background and became the richest man in Italy by virtue of hard work, a good business brain, and (crucially) a great political mind. There is a general consensus on his having these three attributes – but, depending on who you speak to, the relevance of each will vary enormously.He is undoubtedly a very talented man. But just as a poacher feels uncomfortable in his new role as gamekeeper, Berlusconi finds it hard to dismantle the very apparatus which brought him his own success.In short: yes, he leads by example – but it’s not a very good one.

          3. Andrea Giannangelo

            I can’t really believe that you ended talking about Italy! ;DI really appreciate to listen to your external point of view.Italy has many problems, we know.But Italy is a place you can’t resist to love – and its language too -, especially when it’s the place you were born.That’s our vanity: another Italian problem.Thank you David, and thank you JLM.

          4. JLM

            It is a well earned vanity. I look at the Coliseum and try to figure out, as an engineer, how such a magnificent structure could have been built. Hell, they had naval warfare re-enactments and we can’t keep the Boston Garden floor from sweating.Of course being a Christian, it was a bit of a downer standing above where the Christians used to consort w/ the lions.Are there any bad restaurants in Rome?

          5. David Semeria

            The first time I saw the Coliseum, I really freaked out.If any one structure can invoke the concept of ‘ history’ it is the Coliseum. You stare at the very place where 2000 years ago Christians were fed to the lions; where the emperors controlled a man’s fate based purely on the position of their thumb.Before I saw the Coliseum, history was a nebulous concept, afterwards it was real.The Coliseum taught me that ours is but a brief (and potentially unremarkable) chapter in a very, very long novel.

          6. JLM

            The other thing that is cool about the Coliseum is that the Popes robbed (recycled) all the marble for St Peter’s from the Coliseum. It is cool to think that the Coliseum was actually completely covered w/ marble. They were some thrifty fellas or they wanted to make it clear that the Church was more powerful than the Romans.I really dug the Tomb of the Unknown Soldier. What a monument.

          7. bcm

            JLM, I have never seen this site but I am so very impressed by the level of the comments. I would love to visit Italy myself and I am fascinated with ancient rome. I am reading Plutarch now.I reget that the reason I am detracting from this discussion is to make a bad pun. I love that you just said you “dug” the tomb of the unknown soldier. I had to point that out!

          8. David Semeria

            Many parts of the Coliseum were ‘recycled’ by many parties over the centuries – such is life..My favourite Coliseum trivia regards their capacity to rapidly flood the arena — this was before the underground tunnels were added — to allow the recreation of famous sea battles.Those Roman engineers had a pretty ‘can do’ attitude which would still go down well today.

          9. Andrea Giannangelo

            Hearing your words makes me feel lucky, because I can see some of this beauty every time I wake up. I really thank you for your fascinated words.This makes me forget how we have just 100M invested per year in VC+Private Equity, as whole Country. This can’t be solved by beauty, which can only be a palliative. At the same time, beauty itself is the reason which forces you to stay. Don’t you feel the trap?If you look for a seed funding, the best you can hope here is 0.1M, and you’ve really been lucky. If you all love Italy so much, how that I’ve never seen an American doing VC here?All is difficult here on this side. We completely lack an ecosystem; you can always try to startup here, but you’ll have to do it with one tenth of the resources and a mother language that’s spoken by just a few million people.Well, let’s look at the best side: this teaches us how to manage scarcity (gh).Trying to startup in Italy is difficult, especially at 21. Difficult but full of aesthetic, I’d say.Andrea Giannangelo

          10. David Semeria


          11. Fernando Gutierrez

            In order to judge that can-do-attitude you have to consider that the ceo/emperor had their heads on the line, literally!

          12. Tereza

            Lots to love about Italy. Most of all, Italian people.I’ve never not had an excellent vacation in Italy.

          13. JLM

            Italy v Switzerland —- priceless comment and brilliant!

          14. Carl Rahn Griffith

            Great summary, David.Welcome back, JLM – sounds like you’ve had a great break. Well done!I have spent years working with sales and technical teams across most of Europe – and Israel/USA. The variety of cultural and operational approaches to business and styles of leadership never fails to intrigue.Understanding how best to interact with a variety of people in a business – and social – context is a great challenge when working in Europe. One day meeting with a team in Germany and the next in Italy certainly ensured one never forgot the wonderful variety of people and how one had to learn to understand their psyche to get the best results from them. Empathy is developed in many different ways and is especially challenging to nurture when meetings are collaborative across many different regions.Being a ‘neutral’ Brit helps, and having to liaise with so many different cultures was/is a perpetual delight.Oh, and the post-business meetings al fresco evening meals in Rome were always some of the best! Vienna is always a close second, though 😉

          15. awaldstein

            I’ll take tips on restaurants and things to do in Vienna Carl..never been, going in Oct.

          16. Carl Rahn Griffith

            Cool. Will drop you a personal message later in the week, Arnold.You’ll love it.

          17. Tereza

            I was just in Vienna.I come from a hard-core Austro-Hungarian fam and would say don’t miss the coffeehouse Demel, purported inventor of Sachertorte.In fact, you must plan your meals around coffee and cake, which here is an Olympic-calibre event.Reco’s include Kaiserschmarren, Apfelstrudel, Doboschtorte, Rigo Jancsi (a dessert with a priceless backstory). The list goes on. Although I found the Demel’s sachertorte in fact a bit dry.The cafe on the second floor of Julius Meinl on Graben around the corner from Stephansdom has nice cushy sofas, a great view and they make a superb light wienerschnitzel.

          18. Peter Beddows

            Tereza: You got me at “Apfelstrudel” and “wienerschnitzel”; I’m sending for your tour guide.

          19. GiordanoBC

            Agree on that. I’m Italian and left 7 years ago, mainly because I found impossible to work there. I spent time in Brazil, Singapore and now live in China. When I go back to Italy, I’m amazed about how little changes, and how everything seems frozen in time. I compare it with my experience in China and other Asian countries, where my teams seemingly work 24/7 and are full of passion and a desire to improve their situation.The biggest problem of Italy is most likely a lack of drive, which stems most likely that the country is so old and has such a storied past. I often think that, in the same way, the strength of the USA is that, not having much of a past, the country can look forward.Naturally, it’s also about the Italians. I will add another quote. It’s from a thoroughly despicable character, but he got this one right: “To govern Italians is not difficult: it’s useless” – Benito Mussolini

        2. awaldstein

          Nocello!!!The walk from Positano up the terraced mountainside covered in Anglianica vines to the cliffs of Nocello, is one of my favorites.Rivaled only by the walk from Revello down to Amalfi.Lucky you!

          1. David Semeria

            Hi Arnold,Since I know you are (or were) planning a trip to Italy, I just wanted to give some advice on when to come. It’s too late for Fred (July – worst month) or JLM (August -second worst).Mid June is the time to come. The beaches are open, and there is wonderful aura of anticipation in the air..Most of all it’s not too hot or muggy. In July and August the Italians abandon their cities and leave the tourists to queue-up outside the museums in the stifling heat and humidity. The seaside locations are packed with tourists and the aforementioned Italians. Chaos!September is okay – beautiful clear skies – but everywhere you go people seem tired after the long summer season.June !!!

          2. awaldstein

            Hi David…Sage advice…thnx. Unfortunately, with a new biz, was unable to go this summer so missed being put into the Fred or JLM wrong-month camp ;)In Austria in October to talk with wine bloggers about social media and I’m guessing a sweater might be advisable!But, next June, I am planning on being in Italy, thinking about renting a house in Luca possibly…and if so, my long threatened visit to Milan to knock on your door may just happen.

          3. David Semeria

            The pleasure will be all mine, Arnold. Knock away!

          4. fredwilson

            rome was steaming hot in July but we did get to watch two world cup semis and the final in a cool bar in the center of rome drinking peroni and listening to italians shoutingthat was memorable

          5. Fernando Gutierrez

            You should have seen Spain then! by the way, who where they supporting?

          6. Donna Brewington White

            Our neighbor’s daughter has a wedding there September 2011. Hoping like anything we can make it. Wonder if we can get her to change it to June. 🙂

          7. Tereza

            September’s great too!

          8. David Semeria

            September is fine, especially for a wedding.

          9. JLM

            Not very many Americans in Italy.

          10. ShanaC

            I’ll remember that David. FYI, great overview of Italian Polisci in history.

          11. JLM

            “Il Sentiero degli Dei” — trail of the gods. Hiked from Nocello to the Convent of San Domenico (built in the 1500s) above Pairano and then down 1000 steps to the road below. I did not make it to Ravello on the trail.What a hike! Literally almost killed me. It was about 100F.I loved Ravello and the Villa Chambrone.I love Italy.

          12. awaldstein

            You and I both JLM.My promise to myself is to get back at least once a year!

        3. fredwilson

          i want to go to Siena, see the Paleo, and eat with the winner the night BEFORE the race

          1. JLM

            The Palio was unbelievable and the pagentry was out of this world. I had the great fortune of viewing the race from a Pallazo balcony just above the start/finish line. It makes the Super Bowl and the Final 4 and World Series look like a tea party.We had eaten in a square w/ the Tortuga contrade at a dinner for 2000 in which the young girls served, the young men sang and chanted and the adults got rip roaring drunk.The horse spent the night in a church overnight guarded by the young men of the contrade (neighborhood).I have been to some pretty cool things in my life but this was just over the top.Each contrade has a “friendly” contrade and some “enemy” contrades who play tricks on each other.Supposedly the winning jockey (who had won 2 in the last 5 years for the Tortugas) won 300,000 euros. Not a bad days work.

          2. Toshi O.


          3. Pascal-Emmanuel Gobry

            Eat with the winner the night before the race — isn’t that the best summary of what you do for a living? 😉

    3. Guest

      I know yesterday everyone was discussing features they would like to see Disqus have. I would like one that alerts me when JLM has spoken.

      1. obscurelyfamous

        We had a “follow” feature that was unimaginative. It was used but not to the degree we wanted. We slowly kept hiding it until it’s basically gone.Now we’re going to bring it back and make it useful.

        1. howardlindzon

          woot daniel

    4. zackmansfield

      “Liked” this comment…but wish there was a way to “Love” or “LOVE” in all caps. Great to hear from a practitioner – fabulous thoughts JLM, as always

      1. fredwilson

        dittobut how would you make it hard to click on a love button?

        1. zackmansfield

          one option is to limit the amount of love you can give out in a given periodyou can give as much like out as you want but your love you’d have to guardmore closelyI imagine JLM would end up as one of the most loved commenters on AVC.

        2. Dan Sweet

          maybe you have to click it ten times or something annoying like that.

    5. awaldstein

      A treatise on business leadership to hold on to JLM. Thanks!

    6. fredwilson

      this comment is possibly better than any blog post written todayi reblogged the money quote on fredwilson.vc

    7. ShanaC

      Can you train people to leadership JLM- to these qualities?

      1. JLM

        Yes. Anybody can be trained to lead though some folks have a more natural talent for it than others.Almost every characteristic of a leader is a programmed response. The challenge is whether the response comes naturally — under pressure — or simply has to be learned even if learned by rote.I wish I could tell you some of my favorite leadership stories but they would take up too much space.

        1. Donna Brewington White

          Well how on earth do we MAKE the space???!!!Somebody needs to brand you!(Not like cattle, like marketing,)

          1. Tereza

            We should just stick all his comments into a Tumblog.

        2. ShanaC

          Pity that would be interesting

          1. Peter Beddows


    8. GKamstra

      Thanks, JLM! Just saved your comment & the post to my computer – truly words to remember & aspire to (I would argue much is applicable even to those serving in mgmt below the CEO level). Would you be willing to share the booklet of values you’ve developed (or even just a subset / high-level summary)? Regardless, thanks again for taking the time.

      1. JLM

        Send me a snail mail address and I will send you one.

        1. GKamstra

          Thanks, JLM! I’d be happy to. I’m pretty new here & don’t see an email on your profile. If you don’t mind emailing me at [email protected] I’d be happy to shoot you a snail mail address.Thanks again,Greg

    9. Raphael (Rafi) EPstein

      Hello JLM,I am sure many reader will be interested in reviewing the “booklet”. I know I am. What is the best way to get a copy?Thanks,

  50. Adrian Scott

    Great post. Truly. Going to the tattoo shop now, j/k ;).

  51. Tom Labus

    I would add one more task for the CEO. The overall tone and feel of the office(s). You can usually tell within a few minutes the general tone of of company. I’ve visited companies where most everyone is in deep fright and have nothing to say.The atmosphere comes for the top whether it’s good or bad.

  52. MoreCynismNeeded

    This is fatuous advice. The third item in the list is, ” make sure there is always enough cash in the bank”. That is just about everything. Making money and staying solvent is what a corporation is about. The advice is as simplistic as saying all a coach has to do is win.Besides you left out the most important thing a CEO actually does. Collude with the board to be paid 100’s of times what the average employee makes and guarantee yourself a gigantic golden parachute should you fail.

    1. Guest

      I don’t necessarily deisagree with you, but let’s be careful here. Fred boiled down three key responsibilities to a short post. Almost by definition, a short post has to be, at some level, simplistic. You can’t caveat, or provide too many boundary conditions.let me try an analogy here. Wellington in Spain ordered a retreat, when things were going well against the French. His men were demoralized, but they retreated, only to find a garrison stocked with provisions. They realized that Wellington had planned for their retreat several months in advance, and placed it about where it would prove crucial. A historian could write a book about just Wellington’s time in Spain. But in one ‘graf, the lesson is about long term planning and securing resources in time for their use.(IMHO) too many entrepreneurs react too slowly to cash concerns, and turn a molehill into a mountain. A good CEO anticipates the crisis, and has a solution ready to go.

    2. fredwilson

      founder CEOs don’t do thatbut they own so much of the company that they’d effectively be paying themselves

  53. chrisfrost

    Very simple, but effective.

  54. calabs

    This sounds like Joe Madden’s famous commentary, “If this team wants to win, it better score some more points.”

  55. calabs

    If being a CEO is like being a general in an army, how do these three things correspond?

  56. Sam

    Machiavelli said:For as those who make maps of countries place themselves low down in the plains to study the character of mountains and elevated lands, and place themselves high up on the mountain to get a better view of the plains, so in like manner to understand the people a man should be a Prince, and to have a clear notion of Princes he should belong to the People.So, to get a clear picture of what a CEO should be, ask a worker bee – and as a worker bee, I can say the top most quality a CEO must have is he/she should have an ego thats bigger than that of all his investor’s combined.

  57. Addoway, Inc

    Very specific and to the point and precise, but it takes many years to get it right especially for a CEO of a startup when your hands are in every pot. You want to delegate, but you find yourself doing so much to ensure the success. Little do you know that you could be more successful and have more time to concentrate on the business if you just trusted and handed things off to your teammates.

  58. Glenn L.

    Only someone who has been a CEO should ever write on this topic. It is often the case that observers think they know by watching, but only those that do really know. Those that do know that while those three things are core to a CEO’s job, in fact the CEO needs to do everything, but at different times during the evolution of the company, and never everything all the time.

  59. ShanaC

    I know I am late, I think the job of the ceo is to be the parent-that quote is all about nurturing and protecting the company through any possible skillset

  60. Greg Dunnett

    JLM,As a constant reader of Fred’s blog, I would also be very interested in seeing one of your booklets. It strikes me as a fascinating read on your first day of [email protected]

  61. Anish

    Than you very much. I’ll need this.

  62. kagilandam

    There are so many successful CEO comments here which are inspiring… on how to be a successful CEO. Here is mine on how not to be a failed CEO.I always tell my friend “I know what i should not do to be a CEO…still learning what to do to be a good CEO”.As a failed CEO I cansider CASH part very important than anything else before revenues. Keep your burn-rate as minimal until you reach break-even.If you have cash u get talent, u get confidence, u live a life of a leader….for that matter you can speak yourself or else money makes you think/speak/act differntly. Every bloody morning you wake with dreaded dream of money…the growing debt/loan and growing burn-rate… that kills the innovator in you, the leader in you, the speaker in you and finally the CEO in you.After 3-years when my company could not take off on revenues … it finally it boiled down to selling the code to settle the debts/loan and close.Make sure you have enough cash until revenue stream starts flowing.Cheers and good luck.

  63. PeterQ

    My father ran a Billion dollar plus company till he retired some 20 years ago. He would have people wanting to negotiate with him. He would constantly refer them back to his team of VPs, each of whom followed the same approach down through their organizations. HAving enough money was never an issue, and this was in the days when said company had a couple of Gulfstreams, and several Jetrangers, and bought operating equipment in chunks of $200M. Dad was more focused on spinning off local businesses to keep the community happy.

  64. Bob Struble

    As a CEO, this the best signle piece of advice I have ever received from a Board Member, but as I have told Fred, over the years, I have become convinced he has missed one: you must manage your Board effectively.

    1. fredwilson

      ah yesthat one

    2. fredwilson

      ah yesthat one

    3. fredwilson

      ah yesthat one

  65. Dorothy Langer

    Would love to know who the experienced VC board member was. Do you remember/

    1. fredwilson

      hi dorothyi do not remember

  66. David Bloom

    I used to think that leadership was about (a) setting direction and (b) eliminating obstacles. But that was when I worked in a big company and had a world of in-house talent and got my money from an annual budget request process. When I started my company entrepreneurs gave me three pieces of advice, all true.1. Money is a full-time job. Until you earn it, you have to raise it 100% of the time. And when you earn it, focus on cash flow 100% of the time.2. The most important thing is attracting the best possible team. Recruiting should be way more than 50% of your time.3. Keeping clients happy is the only way to succeed. Be 100% focused on creating and delivering value to your clients.In my big company life there were virtually no consequences to doing any of these poorly. In my startup, failure at any one is a potentially deadly problem. And there is a rank order. With cash you can hire well (inspiration alone doesn’t butter the bread of a strong developer); with good people you can understand customer need and build products to suit.

  67. Anne

    High level and direct. Thoughts on the job of the CEO growing a successful, small niche business in this economy? Woman owned serving corporate clients and hiring.

  68. Andrew

    Proofread, please. When offering advice it’s hard to take note when distracted by typos.Thanks.

    1. Dan Sweet

      i’d try to drop this attitude if i were you. look for gold anywhere you can find it. the more senior and successful people you begin to interact with, you will learn this isn’t as important as they tell you it is in school. obviously external communication must be nailed, but replies to emails from junior people, random blog comments, etc don’t need to be scrutinized to this extent.

    2. fredwilson

      when you come across them, please let me know and i’ll fix them

  69. Chris - @webmindset

    As I learned the hard way before selling one of my businesses in 2007… delegate or die! Thank God I learned it a few years before selling so my sale went better and I was more relaxed.Good post!@[email protected]

  70. Michael Conlin

    FOLLOW-ON QUESTION FOR MBA MONDAYS:Is there a rule of thumb for how much cash is “enough cash in the bank”?

    1. fredwilson

      at least six months of burn

  71. CollegeHippo

    A CEO should always lead from the front. He may not be able to hire the best talent because he does not have enough funds but he should be able to drive above average performance from average employees.He should be able to motivate employeesHe should be able to differentiate between vision and illusion.

  72. theschnaz

    For tech startups specifically, I think the CEO or at least a founder/co-founder, needs to own the product as well. Vison and strategy is closest to what I’m describing, but it’s not the same.I think startups need a super high level person sweating the details, eating the dog food, getting customer feedback, testing, iterating, and so on.I don’t think you can hire someone else do to this or outsource it either. (If you could, why wouldn’t that person start their own company?)

    1. fredwilson

      for founding CEOs, that is the #1 thing we look forit becomes a bit less important over time, but remains critical forever

  73. Nick

    I think it takes a lot of work and a commitment to self improvement. It is a very hard job. It is lonely. And it requires discipline and decisiveness. Most of these traits can be learned.But who do you learn them from?So I encourage most of the CEOs I work with to get mentors or coaches (or both). I have seen this work so well for so many people. You might ask “what can a coach or a mentor really help me with?”

  74. Marty Holleran

    Very Good advise–However setting and communicating the Strategy is not enough–HE or She must LEAD the Execution of the Strategy or it will fail.

  75. Gwlabelle

    That advise was so very simple and so very profound that it is unfortunately lost on so very many. Every position has core responsibilities, and within each position on the org chart, I’d bet that the list is never greater than three core responsibilities for any position.

  76. hiddenreflex

    Great post…full of “pith”! But ~one thing missing. For the CEO “the buck stops here”…so the CEO also has to make sure that what’s supposed to be getting done IS getting done and any problems are getting solved. I’d add that as something like a fourth responsibility. The CEO is also a taskmaster/problem solver of last resort. You have to hire the best but also make sure the best live up to their potential. In fact, beyond an early phase for a start-up, for the CEO to do anything more than those 3 or 4 things (on a regular basis) is NOT GOOD as just doing all that is much more than a full-time job.

  77. Kimuhlig

    I like the “3” things and we can all apply them to our own lives . . .we are all CEOs of “Me”, Inc. Having life strategy and vision along with growth and development both professionally and personally with “cash flow” is living a created life! Kim U

  78. markkolier

    Fred – I shared this with my Vistage chair – simple is always best. Thanks. Mark Kolier http://blog.cgsm.com

  79. Rhatta

    I’d like to add this quote to my email signature line. To whom can I give credit?

  80. SEO Services

    being CEO is one of the most pressuring thing in the World of Business but you earn respect from other people because of your position. Play your role and it will work out just fine

  81. Thealzel

    Not just for “for-profit” companies – these 3 valuable skills are needed in the non-profit sector too.

  82. Bryan Starbuck

    I think a 4th one is missing.#4 Measure the output of results from the heads of each department. Make sure their output levels will achieve the level of growth expected. Additionally, give feedback if gaps or issues prevent the outputs of each department from resulting in the entire company growing at rates needed. – Growth = value to customers, number of customers, top-line revenue, and net margin progressing to target levels

  83. Earl C. Wallace

    I agree about the three things a CEO must do, and I like the way JLM unpacks this from his vast experiences. The best leaders are three-dimensional. They keep a big picture view of the mission, resources and contexts. They see how to accomplish the mission with the resources available to accomplish it, knowing that people are the most important resource, so how your people feel about what is going on is a good barometer of leadership acumen. The most competent leaders also understand the context of relevant variables that impact how their resources must be deployed. Thus they can make quick decisions that help them get or keep their organizations on a good financial footing. Two-dimensional leaders only comprehend one of two of those MRC factors. One-dimensional leadership is not about what the organization needs, but is about “me.” This self-focus is why leaders can’t see the contextual big picture, and make appropriate organizational decisions.

  84. Chris

    Excellent points to note here from the veterans.For a small startup company say a web development company, the CEO in addition to performing all the mentioned duties, if the CEO is a programmer, has to get involved in programming too.After working 14 hours a day without suitable pay for months together (sometimes years), once the company becomes big, one fine day someone asks “why that CEO guys gets paid so much ?”

  85. ShanaC

    well how do you bring out those qualities in a person (and I feel like I’ve been missing you around, so welcome back)

  86. Peter Beddows

    Unequivocally true and well said Charlie, especially the part where you say “Companies succeed because of leadership, and fail from lack thereof. No amount of capital or cajoling can replace the role of a strong leader who is willing and capable of digging in deep to make each aspect work.”

  87. ShanaC

    Not sure, the ones that would be most needed to be a leader?

  88. Dan Sweet

    Exactly. People think “Why take a stand on anything or start a big new initiative when i don’t know who my new boss will be or what type or biases and priorities they will bring in with them?” There is a lot going on beneath the surface with your better employees, a big part of the CEOs job is ensuring that the “best talent” that they recruit is allowed to flourish and bring it all to the table.