What Makes A Successful Founder Into An Effective CEO? 5 Lessons From Someone Who’s Been Through The Pitfalls

By Alex Frommeyer

My co-founders and I started Beam in 2012 with the mission to revolutionize dental insurance and employee benefits. At first, I was focused on building Beam to fulfill that mission.

By 2016, we were struggling. Our first product didn’t scale, our second didn’t find customers, and our third was stuck in regulatory purgatory.

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Additionally, it was my fault that we were losing trust and buy-in from our board, key investors, and team. Ultimately, we had to lay off two-thirds of our employees, and I technically got fired as CEO.

I then woke up to the realization that I was performing the job of the founder—not the CEO my team needed.

A good CEO is a team builder, fundraiser, chief strategist, and “owner” of the company culture. But as a founder, developing into a CEO isn’t inevitable or even natural.

Here are five things that ultimately helped me succeed in that transition.

1. Win through influence, not instruction

In the early days of a startup, founders are intimately involved in every aspect of the business. As the business grows, a founder must become a CEO and master communicator, capable of embedding their message deep into the organization.

A founder can be hands-on: “Hey, Sara, go build that product.” But a CEO will lose their leaders’ trust if they go around Sara’s boss to deliver that message. Further, Sara may interpret this “top down” move as a lack of empowerment.

Where founders instruct, CEOs should focus on communicating the business’s goals, strategy, and big ideas to create micro activity, like the product Sara will eventually build. The CEO can influence daily decisions while giving their colleagues the opportunity to propose creative solutions.

2. Tell stories of the early business to motivate

People remember stories better than statistics or bullets on a list. Through storytelling, CEOs can make employees “feel” the business, not just understand it. Storytelling promotes respect for early contributors, fosters appreciation for accomplishments, and emphasizes founding principles.

It’s easy for newer employees to take for granted the existence of the company itself and seek a role there not for its connection to the founders, the core mission, or to impact the trajectory of the business—but as a stepping stone in their own careers.

CEOs can motivate their employees by sharing the authentic struggles of launching a business and the urgency needed to keep the business viable.

3. Say thing 10 times, 10 different ways

Ideally, a CEO could say something once and the message would be received and implemented. Unfortunately, that’s not how humans work.

To communicate effectively, leaders should express a new idea, tactic, or plan 10 times, 10 different ways.

For example, when Beam rolled out OKRs for the first time, we…

  • Signaled the move with leaders one-on-one.
  • Announced the initiative using context-rich slides.
  • Hosted a series of small-group trainings.
  • Practiced internally for a few quarters.
  • Provided hands-on coaching for about a year.

It took the combination of all these methods to land the initiative. This process provided team members a chance to hear, understand and act on the message.

4. Find a mentor

Find a mentor… but not just any mentor will do.

Find someone who recently made the transition from founder to CEO and whose business is 12 or 18 months ahead of yours. They are likely to empathize and advise in a way that few others can because of the unique nature of the CEO role.

5. Work on the business

Dedicate the time necessary to work with your leadership team on the business, not just in the business. It may be just an hour a week—whatever your team needs to craft big-picture goals instead of being mired in the day-to-day grind.

Keep the room small but important. Include your co-founders, top executives and key leaders. Allow them to challenge you in becoming a better, more productive leader.

This opportunity is the perfect time to…

  • Brainstorm operational improvements.
  • Set three-, six-, and 12-month goals.
  • Highlight management areas of improvement.

Use this time to emphasize that success is no longer the ability to wear a bunch of hats, but instead to empower others, reinforce culture, and coach a growing organization.

Beam CEO Alex Frommeyer
Beam CEO Alex Frommeyer

Success is not a straight line

Making the transition from founder to CEO is challenging. It took my business practically going under for me to get serious about learning how to make the switch. But my efforts eventually paid off.

Over the last three years, we’ve increased our revenue by 600 percent, doubled our member base two years in a row, and grown our team to over 300 people.

With the right mindset and support system, any founder can transition into the CEO your team needs.

Alex Frommeyer  is CEO and co-founder of Beam Dental. He has two engineering degrees from the University of Louisville’s Speed School of Engineering, where he graduated magna cum laude and founded his first company in 2010.

Illustration: Li-Anne Dias.

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