I have personally started five businesses from the ground-up. This is what makes me an entrepreneur. But as these companies have grown in size, and more parties have become involved, I have inherently had to move more into the role of CEO.
Let me tell you, being an effective CEO and entrepreneur are two very different skill sets.
What's an entrepreneur?
As entrepreneurs, we're people who wake up every day willing to risk it all. While others are thinking about how to handle today, we're thinking about where their industry is headed--and how we can double-down now to put ourselves in a position of leverage later.
We're people who can both operate on the ground-level, who have the expertise to dig into the work if and when it's needed, but also have the awareness to see the company from a 30,000 foot perspective.
What gets my juices going isn't running a successful company. As an entrepreneur, my excitement comes from putting the right people around me to execute so that I can start thinking about the next industry, market, or opportunity.
Which is very different from what makes for a great CEO.
What's a CEO?
There is a big misconception going on in the entrepreneurship community about what a CEO actually is.
It seems like anyone with a website and an LLC can call themselves a CEO today. Young entrepreneurs "start a company" and then run around calling themselves the CEO--or worse, waste time debating with their co-founder (who is their childhood friend) who should be the CEO and who should be the CFO.
Formally speaking, you're closer to an entrepreneur than you are a CEO, in this case.
But the real difference between a CEO and an entrepreneur is that while a CEO has to be aware of the future, their real "job" is to manage the now. They're in the position they're in to evaluate what's happening in their market today, not to spend hours thinking about what could potentially happy down the road.
The primary difference
I was speaking recently with Megan Holsinger, director of client success at the Predictive Index and an insightful executive with 15 years of experience in human capital management and consulting. Predictive Index helps companies hire the best and keep them engaged with scientifically validated workforce assessment software and management workshops. They help us here at my company, LendingOne, with our hiring needs.
Holsinger pointed out that the primary difference between a CEO and an entrepreneur comes down to style. "It's not just a title. It's an approach to the work," she said. "And what it really comes down to is risk. The style of many CEOs is to be risk averse, whereas entrepreneurs and founders tend to be more willing to embrace risk."
As someone who has played both roles, I see the differences between CEOs and entrepreneurs every day. When you're first starting out building your company, you're an entrepreneur. You're in startup mode, constantly thinking about how to shake up your industry and do something different.
But at a certain point (and I've experienced this countless times), assuming all goes well and your company has grown in size, you have to start thinking like a CEO.
Instead of thinking about how to grow and expand into new markets, you're thinking about how to improve upon what you've already built. You have to adopt a broader perspective, because you're now accountable to a board, or investors, as well as your much larger roster of employees. As a CEO, you have budgets to work within, metrics to hit, and stakeholders to answer to--which means you have to operate with a more formal style, and risk must be more heavily measured.
I've played the role of CEO for much of my career, but it's the moments I get to be an entrepreneur that really gets my juices flowing. And I am happiest when I can run a large company but still instill the entrepreneurial spirit throughout the organization.
Still, it's important to remember that one is not necessarily better or worse than the other. It's merely a difference in style.