The Top 5 Principles a Startup Founder Can Teach a Big-Time CEO

Startups and big corporate firms have surprisingly little in common. Sure, we’re all “in business”, but the way we conduct business – treat customers, attack markets, and manage our employees – is fundamentally different.

The job of a corporate CEO and a startup Founder/CEO carry similar differences. Leading a corporate firm focused on an upcoming IPO or improving shareholder value, versus getting your relatively nascent firm to the next level couldn’t be more different.

The issue is scale. Small companies have many options available to them that larger firms simply cannot or will not support. My Co-founder (and brother) Chris and I experienced this firsthand after the acquisition of our firm, AppArmor, by a competitor 10 times our size. We provided a white-glove implementation experience for our customers, whereas our acquirer simply had too many ongoing implementations to be able to support that kind of customer-specific attention, short of hiring a few hundred additional implementation specialists.

The situation was made even more clear 10 months after our first acquisition, when our acquirer was itself purchased by the corporate behemoth Motorola Solutions for just over half a billion dollars. Scaling our operations from a small team to a company of 20,000 just wasn’t going to work.

It’s the apples to oranges comparison of the business world. The common refrain we had in our business, which we highlight repeatedly in our upcoming book Startup Different, is “what worked for us yesterday may not work for us today”. Business needs change, requiring new systems and strategies to achieve greater scale.

Still, all firms were once startups. The lessons that big firms learned, or even got them to their current scale, can be directly attributed to the efforts of the original founders and their team. While not all of their lessons translate to the “big” company, startup founder principles can, counterintuitively, breathe new life into your company.

There are “5 top” startup founder principles that CEOs can follow to help them move their company forward.

1. They’re not Resources.
   As companies grow, they move away from what I’d describe as “normal” terminology. One big one is that people are no longer people, they’re “resources”. It becomes natural then for you as a CEO to distance yourself from the real needs and desires of those people, whether they’re your direct reports or on the front lines with the customer, simply because their humanity isn’t as visible. Instead of seeing them and your corporate culture as one of the most valuable things you have going, you start to see them like you would items on a balance sheet.

   Any founder will tell you that investing in people as people is a requirement of any successful startup culture.  I think it’s safe to say that there has never been a company that failed because they cared too much about their people.

   Investing in people means hearing them. It means understanding them. It means empathizing with them.

   I know what you’re thinking, “oh boy, here we go again with ‘empathy’”. I know, the term is everywhere, but it is for good reason – you can draw a straight line from empathy to your firm’s market performance.  Catalyst, a global nonprofit that helps build better workplaces for women, surveyed hundreds of employees at companies across the US on the topic of empathy. They found that:

   – 61 percent of people with highly empathetic senior leaders report often or always being innovative at work.
   – 76 percent of people with highly empathetic senior leaders report often or always being engaged.
   – 86 percent report they are able to navigate the demands of their work and life—successfully juggling their personal, family, and work obligations—when their manager is empathetic.

   So, the next time you’re in a meeting and your team starts talking about people as resources, stop them dead in their tracks. They’re people; start talking about, investing in, and supporting them as such.

2. Do You Remember Your Mission?
   Startups are particularly exciting places to work because employees at any level of the organization can usually see the impact that they’re creating on a daily basis. They understand how and why their work matters for their company, their customers, and their career. It’s rare that you have to remind startup employees of the “why” of what they do simply because it’s obvious.

   With bigger companies comes more bureaucracy, middle management, and distance from impact. When we were acquired I, and despite the fact that I was the Co-Founder of my company, started to lose sight of the impact of our business. We created apps that help play a role in saving lives, and yet the new company culture that we entered was so much more data and target driven, that I lost touch with “why”. I actually had to remind myself – and my team – that what we did was important and mattered.

   Not to be too corny, but every company changes the world in its own meaningful way. Do your employees remember how your company does that? Consider this your wakeup call to reprioritize a daily reminder to your employees about why their work matters.

3. Customer Service is a Product Line
   As I mentioned in a recent Q&A with another publication, stellar customer service is a secret weapon for small companies. When competing against the bigger firms, small companies can often provide more personalized and exceptional support for their customers, simply because they have fewer of them.

   It doesn’t just need to be the little guys, though. The real key for any organization is to give customer service the proper respect it deserves: to treat it like any major product line in your business. Counterintuitively, customer service is not a cost center, but an opportunity to greatly improve the profitability of your business.

   The data around this is clear.  In 2023, a major study of consumers of 221 brands across 13 industries in the US noted that highly efficient customer service —specifically addressing the customer’s issue on the first contact—could lead to millions, and even in some cases billions, in additional profit for major firms. Further, high quality service often made the customers more likely to purchase additional products or services from the brands in question.

   It’s not about reducing tickets for the sake of reducing tickets—it’s about people wanting to receive a small number (ideally one) of extremely helpful and accurate responses. This can only happen if you give customer service the attention it deserves.

4. You’re Probably Too Far from Your Customer
   Any worthwhile startup founder is in the trenches with their team. They are intimately aware of the market, the direction it’s going, and – most importantly – the diverse needs and wants of their customers. There’s so much exposure to the market, that a founder’s ability to understand it becomes borderline intuitive; a sixth sense allowing them to understand their business’ health.

   By contrast, the CEO’s role in a big firm has a wide range of responsibilities, but surprisingly few of them involve face time with run-of-the-mill customers. Too often CEOs are stuck in the board room; they understand the 10,000 foot view of their company, but couldn’t accurately tell you what their customers are saying about their firm. This leads to decision-making that is isolated from market needs and potentially at-odds with what employees believe is in the best interest of the firm.

   Take time out of your busy week to get back in the thick of it. Hearing from your customers regularly will provide you with invaluable insight in business decision making. Try jumping on customer calls as an observer – one trick is to pretend you’re a new staff member learning the ropes. Just remember that if you try this, you’ll want to keep your camera off or find an old Halloween costume to disguise yourself. In any event, make the time to get first-hand accounts from your customers.

5. You Don’t Know Everything
   It’s so easy to get into a rhythm of thinking you’re the best thing since sliced bread. You’re the CEO after all – who could possibly know the business better than you?

   The answer? Quite a few people actually. I know that I needed to “check myself” repeatedly during my time as CEO of my firm, and if I didn’t, then the market or my Co-founder brother would be more than happy to do so.

   Bring humility back to the table; if people think that you think you know everything, then they’ll stop bringing you actual feedback and instead pad your ego. Project a leadership style that’s based on a desire to learn more. The famous author CS Lewis summarizes this extremely effectively, “humility isn’t thinking less of yourself but thinking of yourself less”.

   Leading with curiosity will treat you well. Often just listening rather than trying to solve company or employee raised issues is an effective strategy. People just need to feel heard, and if they get that satisfaction without having a quick solution trample their concerns, they’ll feel surprisingly more comfortable sharing feedback with you down the road.

Ultimately, your knowledge – and thus ability to move your business forward – is limited to what people feel comfortable telling you. Make sure they see your humility and personal desire to improve in day-to-day interactions.

I hope these lessons help you move your business forward. Acting small but being big is a remarkably potent business strategy.

Written by David Sinkinson.

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