CEO Strategies for the Technology-Based Startup
A successful technology-driven, or product-driven, new venture combines a value-driven orientation, an organization capable of delivering that value, and a supportive executive leadership team. Less visible, but equally critical, is a culture that enables replication of the initial successes. All of these factors are required for the new venture since risks are inherently higher as supported by five-year failure rates.
The customer’s priorities, objectives, and values are key to any value proposition and must be approached as absolutes over the short term. The value proposition must contain targets, frames of reference and points of differentiation, enabled by the appropriate support structure. Together these three dynamic descriptions, once aligned, create an actionable plan yielding win-win economic outcomes. Within the value proposition three specific points of reference exist: preferred, differentiated and entry. For the venture based on a new-to-the-world and/or market offering a bias for value to the “lead user” is helpful in catalyzing market adoption even though these users may not be large customers in their own right.
Beyond the value proposition, the organization must be capable of delivering on the value promised. This requires the CEO and executive team to build and maintain an organization committed to implementing and continuously improving seven clearly proven and critical parameters:
- Place the customer at the epicenter of the business model.
- Focus on solutions that anticipate customer needs.
- Learn from competitors, but stay faithful to your vision.
- Create an authentic learning organization.
- Harness the intellect of every employee.
- Create a performance-driven culture.
- Prepare the organization for change, especially drastic change that can be common with new ventures.
Finally, but equally important, is developing a leadership mantra that is sound and grounded in past experiences, while focused on the future knowledge-worker economy. Seven specific leadership characteristics, which have borne the test of time, are proven to drive effective performance and yield sustainable results are:
- Integrity – Keep your word, don’t play favorites, and tell the truth.
- Vision – Explain why the team’s activities are important.
- Competence – Demonstrate skill in some aspect of business.
- Decisiveness – Make sound, defensible decisions in a timely fashion.
- Humility – Acknowledge that you don’t know everything.
- Persistence – Don’t give up easily, but know when to manage your losses.
- Team building and maintenance – Show that “It’s all about the people.”
Although a new enterprise has the highest probability of success when it effectively combines value to the customer with an organization capable of delivering that value and has a leadership team that exhibits these proven characteristics, clearly tools and processes also are necessary. These include meaningful strategies, sufficient resources, insightful metrics, and a bias for delivering results in a predictable manner. However, tools and processes still require the aforementioned prerequisites to optimize the chances of success.