Founders VS CEO’s: When is it Time to Step Down?


We’ve all watched as visionary founders have created some of the most disruptive and successful businesses on the planet. Think Google, Facebook and Uber. With these great titans of their industries the founder has kept his position as the leader and CEO. For many other startups that see rapid growth, the founder may find themselves in over their head. As a company founder, it’s your vision that guides the innovation and team’s morale. When a company starts to scale those responsibilities expand to things like HR, finance and legal. Without the knowledge or desire to learn, the founder/CEO can quickly burn out or make poor business decisions. So how does a founder know when and if they should step aside to let an experienced executive take the reins?

Having a Game Plan as a Founder

So let’s say you created the next big app and you fancy yourself a CEO that’s in it for the long haul. What are some of the things you need to nail down before the company skyrockets at the speed of light? Having a game plan as a founder and CEO is crucial to reaching your potential while keeping the ship together through the process.

    1.See the Future: As a founder you need to understand where the market is today but more importantly where it will be 6 or 12 months down the road. Plan for how you will deal with those changes to be able to react quickly and take advantage of opportunities.

    2.Know Your Competition: Doing your due diligence and watching what your competition is doing can be the difference between life and death for a fledgling company. Keep a watchful eye on the market to ensure you stay ahead of the curve.

    3.Surround Yourself with the Best: You may have started in your mother’s garage but as you grow find people with more experience to surround yourself with. When things start moving at the speed of light you will be glad that there’s a steady hand that’s been there before.

As former tech startup powerhouse turned pro poker player Neil Blumenfield of 888Poker explains, “That game plan has to include a fair amount of leeway to deal with unexpected or unlucky events that impact the strategy. It's starting to sound more and more like a poker tournament. In business, you must either play to the strengths that you have coming in, or make a concerted effort to develop strengths where you are weak.”

Know Your Strengths and Weaknesses

There’s no doubt that founders have a bit of an ego or they would never have had the daring to shoot for the moon with their own idea. A healthy ego is good but bravado can lead to disaster. Every founder should look internally and identify their strengths and weaknesses both as a person and a business owner. Do you understand finance? Are you a good Marketer? How would you deal with HR issues? These are things that can be managed when you have 25 employees but as you scale to 250 employees the complexity exponentially grows. As a CEO of a rapidly growing company you need experience in putting the right processes in place, ensuring you’re in compliance with regulations and putting the right people in place at key positions.

It’s this introspective realization a founder needs to come to in order to determine whether they have the chops to stay CEO for the long haul or find a replacement with the experience and knowledge to take you the distance.

Image via Shutterstock

About the Author

Megan Totka

Megan Totka is the Chief Editor for As a small business expert, Megan specializes in reporting the latest business news, helpful tips and reliable resources, as well as providing small business advice.

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