There is a difference between starting a successful company and running a successful company. Very few can accomplish one or the other, and even fewer can do both. This is why it is important to establish the difference between a CEO and an entrepreneur. Both are equally impressive, but they require very different skill sets. It is important for successful entrepreneurs to reflect on their growing businesses and ask themselves if they truly have the traits it takes to run a multi-million dollar company.
Technically, anyone can easily become an entrepreneur. Not everyone has what it takes to become successful, but they can still start a business and call themselves an entrepreneur. An entrepreneur is someone who starts a business. They create or find a product, and build a business structure around it. Once the initial business is built, however, it may be time to consider hiring a CEO. Not just anyone can become a CEO. Most of the time it takes years of experience and climbing the corporate ladder. Only experienced CEO’s really get hired. Amateurs risk ruining the business. So, though anyone can easily be an entrepreneur, not everyone can be hired as a CEO. The positive side of becoming a CEO is it adds a lot of structure to a person’s life.
Executives need to take time to build their experience before they make substantial money and retire. Entrepreneurs have less structure but more freedom. They have the opportunity to sell their business, and take time off until they are ready for their next project. While entrepreneurs can take extended time off and come back to the business world easily; CEO’s typically need to maintain their careers in order to keep up their knowledge and skill in the field (Warrilow).
Someone who needs more structure and stability in their life should be a CEO, while someone who craves more fluidity and variety should lean more toward becoming an entrepreneur. Another key difference between CEO and entrepreneurs is the decision-making process. Entrepreneurs are usually dealing with small start-ups which means not many people are involved with the decision-making process. For this reason, when it comes to making decisions, founders can do so quickly and efficiently.This is important because a lot of start-ups have to act fast in order to stay competitive. Entrepreneurs must be able to make smart decisions fast. Stalling could mean the failure of the company. CEO’s are dealing with much larger corporations. Their decision may not be final . Executives have to meet with board members and directors to discuss issues and then come to a decision democratically. They must be able to communicate and compromise with people in order to move things forward in the company.
Above some differences were identified between executives and entrepreneurs. A lot of them contrast. There are some traits that are specific to entrepreneurs and founders that are not necessarily pertinent to executives. Here are some traits of successful entrepreneurs:
Innovation: Successful entrepreneurs must be able to create products or companies that are useful to a large amount of consumers. This is a simple statement but a major challenge. If it were easy to think of products like this, there would be much more successful entrepreneurs.
- Innovation is the most important aspect of entrepreneurship. Without a good product, there is no company.
- Raising Capital (Tribbey): Every major growth in a company calls for more capital in order to keep up with demands. Entrepreneurs must know how to convince investors to invest in their company or else their business will not be able to grow.
- Knowledge of the Market (Thiel, Peter. Zero to One. Crown Business, 2014.): Before starting a business, the founder really needs to know the market. Entrepreneurs must consider possible consumers and competition. They must reflect on whether their product is useful enough that people will buy or use it, and they must consider whether there is a company already selling a similar product. Opening another ride share company would be unwise unless it is somehow far superior to Uber and Lyft. It is proven that people do use ride shares, but the market is too competitive to get into at this point.
CEO’s come into a business when it is no longer a start up. Mary Ellen Tribbey, who has experience with being a founder and an entrepreneur, suggests hiring a CEO once your business is worth at least 1 million dollars (Tribbey). CEO’s are important because though founders may have a vision for the company, CEO’s can really implement that vision. Some traits of CEO’s are:
- Management: Executives are hired to manage a company and make sure it is running smoothly. This incorporates having good leadership and organization skills. CEO’s must be able to direct and instruct people lower in the company in order to keep the company in line with the overall goals and vision.
- Creating the Vision for the Founder or Board of Directors: CEO’s must create plans that align with the goals the founder and board has for the company. If the board wants the company to expand, then the CEO must make a strategy to implement that vision.
- Evaluate Successes and Failures: CEO’s have to look at successes and failures unbiasedly in order to properly assess the company. Some successes and failures are due to chance while others have causes. CEO’s must determine the possible causes and act on them. If it leads to success, maybe they will implement the strategy more, and vice versa.
Entrepreneurs and founders are both essential for successful companies. Though founders may find it difficult to trust so much of their company in the hands of another, it truly is beneficial for both their companies and themselves. With the right CEO, founders can watch their businesses grow and thrive.
ABout the Author
Emma Cheskey is a Pre-Nutrition major at UNLV.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of RVF or UNLV. In addition, thoughts and opinions are subject to change and this article is intended to provide an opinion of the author at the time of writing this article. All data and information is for informational purposes only.