CEO Responsibilities

The Three People Even CEOs Have To Report To

Too many people start businesses for the wrong reason. We are in a time when entrepreneurs and CEOs are seen as rock stars, and creating a start-up is the “cool thing to do.” Many young people are attracted to the concept of being their own boss, without realizing the struggles and responsibilities that come with starting a business.
 
If someone says, “I want to be my own boss,” and they just mean they want to control their own destiny, then that’s understandable. However, if what they mean is, “I want to be my own boss and not have to be depended on, or help or please anybody else,” then they are in for a rude awakening. The life of an entrepreneur is a ridiculously hard one. If you go into business, solely to be your own boss, you won’t have the passion and grit it takes to get through those first couple of hard years.
 
I know, as a young CEO, I am always reporting to my co-founders, employees, shareholders, and customers. I will always report to someone. The more successful you become as a CEO, the more people who will depend on you, as you will depend on them. This concept is called accountability. The most successful CEOs in the world are always held accountable by the shareholders they report to.
 
Here are some types of people CEOs report to:
 
Co-Founders/Partners
 
Although the media makes it seem like entrepreneurs succeed because they can do it all, truth be told, successful solo founders are an anomaly. When creating a start-up, regardless of whether it’s tech, you almost always need multiple founders with complementary skillsets. I am talking about Hustlers (sellers) and Hackers (builders).
 
When you take on co-founders or partners, they are not only there to help you build a company, but they are also there to hold you accountable. Although I am the CEO of my organization, I am constantly reporting to my co-founders and making decisions with them. My two technical co-founders, Ken and Brandon, report to me how product and development is doing, and I report to them on how business development is going.
 
The title CEO doesn’t mean you can make any decision you want or that you are above everyone. A good CEO is always transparent, displaying good leadership by solving problems alongside his or her co-founders.
 
Customers
 
The customer is always right. This statement holds extra true when you run a b2b organization. When you provide a service- or a subscription-based product to another business, it’s almost like you're an employee to that business. Obviously, the relationship is a little different than employment, as you have many customers and own your own business, but just like being employed. Another person pays you for your services/product and can easily fire you from providing them your services/product.
 
Because your customers are funding (hopefully) or partially-funding your business with revenue, they are always right. They also can fire you, so it’s important that you report to them and keep them happy. If you never report to your customers, churn (loss of customers) will eventually kill your start-up.
 
Not only should you be reporting to your customers, because they pay you, but when you’re an early stage start-up, it’s very important to report to them to make sure you’re building the right product. Customer feedback always fuels successful product development.
 
Investors/Shareholders/Directors
 
In the life cycle of your business, you will add shareholders to your cap table, which means you will give away some part of your company for something. This can come in many forms. If you’re super early stage (pre-product), this can come in the form of being accepted into an accelerator or giving options to an adviser. Once you have a little traction, this can come in the form of taking seed or growth investment and/or having someone join your board of directors. All of these shareholders are people that CEOs have to report to, but it’s always the investors and directors that CEOs are held most accountable by.
 
When you have a board of directors, made up of more outside individuals (e.g., investors) than co-founders, those outside directors have majority control. Although good boards will do their best to side with the CEO to show unity, it’s important to note who has the power. Successful CEOs are always transparent and forthcoming with their board of directors because of this. They report to them on a regular cadence and manage expectation. Not only do CEOs report to their directors, because it’s a good business practice, but you also legally have to do it if it’s in your articles of incorporation (quarterly reports, etc.).
 
Long story short, CEOs must report to many people, and that’s how it should be. This accountability and pressure brings out the best in CEOs. Pressure makes diamonds. So if you’re looking into starting your own company to become your own boss, think again.