Founder vs. CEO: Which do you want to be?

One of the factors that prompted my most recent job transition (leaving the AIM CEO role) was considering more deeply the differences between founding and leading as CEO, and my personal fit for each role. Unable to find descriptions that captured the reasons bouncing around in my head, I decided to share some rough thoughts on the difference between them.

Founders not remaining as CEOs is a common phenomenon. In the for-profit sector, "By the time ventures were three years old, 50% of founders were no longer the CEO; in year four, only 40% were still in the corner office; and fewer than 25% led their companies' initial public offerings.(1)" This trend also appears in our nonprofit organizations, where typically half of the founders leave within the first five years. I believe the mismatch between founders and long-term CEO roles can be broken down into three key categories.

The Day-to-Day Difference: Problem-Solving vs. Managing

The most concrete way that founders and CEOs differ is in their daily work structure. Initially, a founder's job involves doing... pretty much everything. A significant portion of your day is spent directly implementing the ideas you develop. Another founder-centric activity is solving novel problems. As you handle day-to-day implementation, you encounter roadblocks with no established protocol, track record, or clear solution. With no one to pass responsibility to, you must figure it out yourself. If you hit a wall you just have to go over it, or around it or under it.

As your organization matures, these patterns shift. You begin delegating direct work to specialized staff, transforming your hands-on time into management and consensus-building efforts. Similarly, novel problems arise less frequently, and you find yourself addressing recurring challenges and optimizing solutions you created when first encountering these issues. Your initial "90/10" solutions become more robust and well-defined, and you evolve from creator to implementer and enforcer of these processes.

In many ways, your focus shifts from tasks to people—more time directly spent on HR, building buy-in, and communicating with stakeholders. What once required a simple nod from your co-founder now demands approval from your board and multiple staff members, often with conflicting views. The CEO role does have advantages: you can accomplish a much larger volume of work and receive significantly higher respect, compensation, and stability. In some ways, it's a cushier job, though potentially a less exciting one.

Skill Set Utilization: Patience or Irrepressibility

Directly related to the changing day-to-day work is the different skill set required for founders versus CEOs. While some traits benefit both roles (hard work, for instance, is essential for founders but remains valuable for CEOs), others become more or less important as the organization evolves.

Traits more important for founders: Hard work, creativity, grit, irrepressibility, fast movement, risk tolerance, open-mindedness, adaptability, comfort with contrarian positions, and self-motivation.

Traits more important for CEOs: Communication skills, management ability, patience, wisdom, diligence, consistency, conflict resolution abilities, delegation skills, and detail orientation.

In some ways, fitting a founder into a CEO role is like trying to fit a spiky object into a round hole. Co-founders often possess dramatic and dichotomous strengths and weaknesses, making them much "spikier" than the well-rounded profile needed as a CEO. While these edges can be smoothed, doing so is challenging and potentially underutilizes the very skillsets that made a co-founder or young company unique enough to succeed.

Occasionally, an entire company can adapt to accommodate a founder's spiky profile (think Steve Jobs and Apple), but this is more the exception than the rule.

The Evolving Organization: Sailing a Boat vs. Driving a Ferry

It's not just your role that changes—the entire organization evolves. You can resist some changes and adapt to others, but this becomes increasingly difficult over time. While AIM still operates "younger and smaller" than its actual size, it has considerably more of a "big organization" feel than it did in earlier stages. I found that significant transitions occurred each time we added a new level to the organizational chart.

Stage 1: Doing the Work Yourself Fast (~3-9 people)

Everyone reports directly to the co-founders. The team is small and close-knit, with high value alignment and talent density. Everyone can fit around a single table, and you can easily have conversations with the entire team. Strategy evolves quickly and dynamically, often communicated verbally with co-founders checking each other's work. You can pivot rapidly and are often amazed by how much you accomplish in a week compared to the same staff time and cost in a larger organization. It’s a lot of work but also a lot of fun.

Stage 2: The First Layer of Middle Management (~10-20 people)

This transition occurs when your team becomes too large for co-founders to manage directly. With double-digit team numbers, achieving the same level of consensus becomes impractical. Processes emerge, hierarchy becomes more prominent, and competition and bureaucracy begin to arise internally rather than remaining purely external concerns. Different people may fit this organizational stage better than the previous one. Jobs become safer, higher-paid, more prestigious, and less risky. People might join even if they don't prioritize the mission above all else. While things move more slowly, new opportunities emerge—partnerships and fundraising become easier, and you can hire specialists, which enhances your public image and sometimes leads to better results.

Stage 3: Building Machines Instead of Products (20+ people)

At this stage, processes and systems increasingly guide actions instead of looser principles and individual judgment. Team members may not know what's happening in other parts of the organization. Some principles may be unpopular but necessary because not everyone can keep track of all organizational activities simultaneously. The organization can assign four staff members to a project without strain, and an employee's sudden departure becomes a speed bump rather than a crisis. Your work now involves tweaking a machine, monitoring end results, and addressing errors when they occur. Problem-solving becomes reactive, process-driven, and retrospective rather than proactive and built from scratch.

While some people may thrive in all three stages, most gravitate toward either building the machine or doing the hands-on work themselves, excelling in their preferred environment.

Personally, I find that the sailing boat, doing the work myself, problem-solving, and generally being excellent in some areas while weaker in others better matches my profile. I believe it's advantageous to recognize your strengths and weaknesses and to find roles where you can truly excel.