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In 2010, perhaps no company in the world was making a bigger splash than Groupon. In less than two years since its founding, the startup reached a $1.35 billion valuation and went from 37 employees to over 10,000, a whiplash-inducing rise that led Forbes to dub it “fastest growing company ever.” Its founder, Andrew Mason, a former music major from the Pittsburgh suburbs, was declared a “phenom” and a “visionary.”
What he was not, at least at the time, was a great CEO.
If Mason’s ascent was spectacular, his downfall was equally so. His management style was erratic and often unpredictable, and a series of accounting issues and flawed financial statements eroded investor confidence. Groupon’s post-IPO era was marked by decline and disappointing revenues; by the time Mason was dismissed in 2013, no one was less surprised than him.
“After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding — I was fired today,” he quipped in a note to staff. “If you’re wondering why…you haven’t been paying attention.”
As a founder, Mason was incredibly successful. Unfortunately, his meteoric rise didn’t give him the chance to evolve into his next role: That of a CEO.
Most of us won’t get the chance to rocket to success as quickly as Mason—and frankly, that’s a good thing. Here are some ways founders can learn to make the transition successfully.
Know Yourself
In many ways, founding a company requires a different skill set than running it as a CEO. As your business grows, it’s important to do an honest assessment of your strengths and weaknesses, and figure out two things: How you want to spend your time, and how you can be most beneficial to the company.
In an analysis for Harvard Business Review exploring how founder-CEOs can best serve their businesses, Bradley Hendricks, Travis Howell, and Christopher Bingham write that founders need to develop an understanding of what drives them—and part of that means focusing on “developing their capacities for introspection and self-awareness.”
“If you’re a founding CEO, remember to ask yourself how you really want to be spending your time and effort — and if the answer isn’t running a large company, consider what options might be a better fit,” they say.
If you do choose to stay on, focus on the aspects of the role that feed you. As your company grows, you no longer need to wear every hat. Learn to delegate the responsibilities that are outside your areas of interest and expertise, so you can dedicate yourself completely to the ones that are.
Instill Confidence
One of the prime reasons for Mason’s downfall as a CEO was his inability to instill confidence, either in investors or his team. I’m not a shrink, but given his propensity for self-deprecating humor at inopportune times, it seems probable that Mason was feeling unsure of himself. That lack of self-assurance can be fatal to a business.
As a founder, you’ve undoubtedly had to learn to manage fear and self-doubt. Transitioning to CEO often comes with a whole new level of uncertainty. After all, you’re no longer in it for yourself alone, and the newly-high stakes can be crippling.
If you feel this way, you’re not alone: According to the Norwest Journey Study from 2018, 90% of CEOs/founders surveyed cited failure as the leading concern that keeps them up at night.
One of the best ways to instill confidence in others? Be confident in yourself. As tech career coach Dr. Kyle Elliott writes, leaders are responsible for a lot, including not only establishing a vision and strategy, but maintaining their team’s trust along the way. “Displaying strong self-confidence makes it easier for employees and executive peers to trust and follow your leadership and decisions, especially during times of change and turbulence, which seem increasingly common,” he advises.
To do this, focus on your strengths, and work on developing a growth mindset (which you’ve probably already got if you’ve successfully launched a startup). And remember, good leadership doesn’t happen in a silo. Seek advice from mentors, and ask for feedback from your team. “If you’re not regularly getting feedback on your performance and leadership from those around you, start now and you could watch your self-confidence soar,” Elliot says.
Stay True To Your Values
There are many benefits to being a bootstrapped founder, but one of them is that it’s much easier to identify your core purpose, and stick to it.
VC funding can be exciting, and it’s certainly headline-grabbing, as Groupon clearly demonstrated back in 2010. But with big funding rounds come big expectations. It’s hard enough to stick to your “why” when growing a business—distractions and diversions disguised as genuinely good ideas abound. Add external pressure from investors, and those distractions grow even more tempting to chase.
Knowing your values, and repeating them often, is a helpful practice. As a founder, you may initially be the only one who benefits from hearing them. But as you evolve into a CEO, it’s essential that your employees know and understand those values, too.
For what it’s worth, Andrew Mason’s story didn’t end with Groupon. He’s now the founder—and CEO—of Descript, a highly popular AI-powered audio and video editing tool. Despite his public crash and burn, Mason’s success has been a long game, and you can bet he wouldn’t be the leader he is today without those early experiences. Transitioning from being a successful founder to a successful CEO doesn’t happen automatically, and it doesn’t happen overnight. Be honest with yourself, have confidence and stay true to your values to make the transition as seamless as possible.