How Startup CEOs are Stunting Revenue Growth

There is little doubt that most startup CEOs are creative people. They know how to think outside the box and come up with great ideas. That’s usually how they became a startup CEO in the first place. But sometimes that can be part of the reason why a startup’s growth has become stunted.

CEOs firmly believe that their ideas will create activity and growth. Something would be wrong if they didn’t think that and believe in their abilities. However, those ideas and that activity can sometimes move in too many directions. If a CEO has too many ideas that they want to be explored, it can stand in the way of revenue growth.

Keep in mind that startups need to remain agile. When there is activity moving in too many different directions, it doesn’t add up to real market growth. A lot of disparate activities isn’t going to create momentum; more times than not, it’s just going to create chaos. Everything a startup does must be aligned, purposeful, and complementary to everything else so that all activities are working toward the same goal.

This is a lesson I learned from my own personal experience. I was once with a startup that had 300 employees and 250 active projects operating in parallel. These projects were related to different products with different marketing and different financings. Everything was moving in different directions and very few of these 250 active projects were related to one another.

This was possible because the CEO and other executives had plenty of ideas they wanted to explore. The problem was that nobody questioned whether it was the type of idea or project that was going to move the company forward. Even if something seems like a good idea, that doesn’t mean it will be aligned with everything else and a good idea right now.

At that company, those 250 projects had to be completely reorganized. We managed to whittle down those 250 projects to 10 projects that we believed were related to one another and could move the needle. While many of those 250 projects may have been born from a good idea, focusing on 10 projects was necessary to building momentum and improving revenue growth.

The difference between 250 projects and 10 projects is the same as the difference between a CEO and a COO. Keep in mind that a COO isn’t just there to manage the things that the CEO doesn’t want to manage. There is more to the job than that - at least there should be.

The COO has to figure out a way to start a flywheel and reach compound momentum. It’s their job to prioritize the activities that will move the needle forward and prioritize everything else. If the CEO comes up with a good idea, it’s the COO who must question whether it’s the right idea or will take the company in a new direction that doesn’t complement the company’s current activities. 

For a startup, this is the role that a COO should play and exemplifies the value that a COO can bring to the table. In other words, it’s the COO’s job to prevent the CEO from stunting revenue growth with too many ideas and too many unrelated projects. Avoiding this pitfall will help startups get on the right path.