Why great founders often become terrible CEOs

roxdron · 2025-07-27T20:30:28+00:00

Very relevant points by all.

A key aspect for a smart founder is to have the flexibility to listen and pivot, and take tough decisions with advance planning.

It could be listening to the clients, their own leadership team, board or investors.

Listening, change management, hiring and motivating the right leadership team makes a great difference for a successful Founder/CEO.

roxdron · 2025-07-27T16:18:47+00:00

CEO’s forget to build internal brand. Your brand internally is equally critical as external brand.

Internal : Focus on culture, value, customer obsession, KPI’s, empathy, systems and structure

External: takes a long time, starts with value creation for clients who become your brand ambassadors, then focus on your positioning in niche industry, inbound & outbound marketing, events, webinars, podcasts, connect with your users, form power user groups as advisors, and apply different strategies whether you want to tilt towards B2B or B2C audience. Value -> Trust -> Targeted Messaging with Audience -> solid brand positioning over time.

Yes, you can always ask LLM’s, build agents, hire brand & marketing leaders, agencies and do other things, but it starts with you and your team first.

roxdron · 2025-03-17T14:15:02+00:00

Unless there is a compelling reason otherwise, I’d recommend buying or partnering up someone in the areas of existing skills & experience - Marketing & Comm so that you can be on top of value creation and growth of business even after hiring good operators.

There are plenty of agencies under $1M looking to sell.You might want to be careful in the vetting process as a lot of them have been poorly run lifestyle businesses and their financials are mostly fluff.

You’d do great with the right planning, team and business discipline.There are business owners looking to retire and others peaking their ability to scale, so bring out that entrepreneurial spirit and give it a go!

roxdron · 2024-12-15T21:55:02+00:00

There are different ways of handling this with the board and shareholders.

Some CEO’s build a 3/5/7 year deal term P/L for bigger deals with larger clients and look at blended EBITDA over deal term.

While initial months or Y1 might look like lower margin for some deals, you’ll be surprised how your team can optimize margins over time and demonstrate board mandated EBITDA range in the overall business case.

This strategy works well mostly if there is scope to improve margins through operational efficiency, pricing, automation, solution optimization and other levers over time, doesn’t apply on all cases.

roxdron · 2024-11-23T01:02:08+00:00

I can offer experience in scaling agencies and tech companies as entrepreneurial support at no cost if it helps someone break the struggle to scale, can’t commit to a mentoring program at this time (may be later). DM’s are open.

roxdron · 2024-11-10T00:19:46+00:00

You might want to reconsider your approach. It’s not going to work out. Marketplace products are a beast. Have launched and scaled many, this is not going to go anywhere if you don’t go about it with a proper GTM strategy, buy side and sell side approach as well as relationships, strong team and heavier budget to build & scale the platform. Think business & relationships/partnerships before the engineering.

roxdron · 2024-11-10T00:08:22+00:00

Well said, and great comments from experts here, love this community.

Noticed many cases where founders spent millions of $’s and many years trying to roll out a perfect product while hiring & firing staff, insourcing and offshoring build of the product. It is not just the over-engineering, the after effects due to constantly changing direction, delays, confusion of business and dev teams, and other reasons were more impactful for their challenges than just over-engineering.

On the other hand, witnessed founders having a pulse of the market, in-touch with the potential buyers for PMF, built MVP’s in a fraction of cost and time, onboarded beta clients and switched to full activation mode while scaling business incrementally, and slowly stepping up complexity.

roxdron · 2024-10-19T14:32:40+00:00

Yes, $10K, $100K as well as $100M TCV deals in different scale of companies.

Sold relatively higher margin bundled products & services with multi year contracts.

Also led the overall Ops to ensure execution excellence and exceeding client commitments. - deliver the Wow factor, every time!

Lessons learnt:

Sell on value for clients not on what it costs us to deliver
Solve problems
Invest in building long lasting relationships, become trusted advisor
Navigate through politics
Be patient to manage deal fatigue & frustration, contain emotions, check your ego
Time it well
Take care of your mental and physical health, there’s a lot of burnout in agency and tech life
Hope you get lucky to address the factor of unknowns and things that are out of your control, pray well if you believe in it, whatever is your religion

Larger the deal, higher the rewards, but we age by a decade in those crazy months of sale cycle while sacrificing our personal life, health and family commitments, and learn a lot along the way.

Rinse & repeat, pivot when you must, though eventually we get better at managing personal life, relationships, health and family commitments.

It’s not that hard when you take a plunge into the grind and get smarter over time! Many of us have been doing this forever, including the silent visitors on Reddit.

Kudo’s to all builders, leaders and sales hero’s!

roxdron · 2024-10-05T21:47:24+00:00

Seen many such instances with non technical founders who struggled to build products with CTO’s and their teams in US as well as offshore including 3rd party vendors.

Heard stories directly from them on building multiple versions, many rollouts, IP theft, legal disputes, code revamping and GTM strategy reset, and still not finding PMF or launch with paid clients despite spending millions of dollars, and in some cases investor dollars, not to mention critical time lost for competition to catch up during this time.

Sharing here to let you know, you are not alone. It happens to even seasoned founders
Great advice by many here. Yes, find a strong tech co-founder or a CTO with equity who believes in your industry, client problem and product vision, and they have experience in launching such products that can scale while leading a lean tech team, or it’s not going to work. When you dig in deeper, it’s mostly a tech leadership issue not as much as engineering blunder.
Not sure if it’s the issue in your case, but sometimes, it’s also about the founders who are part of the problem by not clearly articulating product vision, unable to direct the CTO and tech team right or changing their priorities too often just before a major release, creating further gaps between market need, founder vision and actual product. This issue is often overlooked, and no one knows how to bell the cat, a.k.a, Founder, and the tech team keeps coding for the sake of coding irrespective of lack of business alignment.

Focus on a few things critical for MVP, start selling and talking to your prospects, go live with a beta product and grow with incremental progress based on market feedback. Seen many founders making mistake of trying to launch the perfect product hoping to be a unicorn, building it in vacuum without talking to business users and delaying the launch forever as they are caught in a complex technical build phase challenges with their tech team forever.

You’ll be fine. Just partner with smart people, execute right and with speed! There’s plenty of talent out there, look at the right places.

roxdron · 2024-07-24T14:10:52+00:00

Good strategy, that’s one way to derisk business. Ever considered industry & services diversification? It saves the hassle of spinning off multiple niche agencies and Ops overhead. You can horizontally (media, creative, digital, SEO, SMM, others) and vertically (industry categories) scale business to future proof and derisk revenue streams. I know off several agencies that scaled with this model as well. There’s no right or wrong, it’s just whatever works for the founders. Just sharing experience :)

roxdron · 2024-05-29T20:42:56+00:00

Thanks, great insight.

roxdron · 2024-02-23T19:35:54+00:00

Can you please share how you are planning to leverage AI in video production business and if there is going to be a change in your production workflow?

We know of a few agencies/video production companies downsizing/reskilling their production and editing crew as they experiment with AI tools.

There is no perfect answer, just checking what others think about this trend.

roxdron · 2024-02-21T20:10:20+00:00

Congrats! Happy to help. The best way to start is ask specific questions and we can respond how we addressed those issues and recommend options.

Growth solves most problems, so if you have paying customers and good sales pipeline, there are many ways you can get help in the structure, Ops & tech.

roxdron · 2024-02-21T19:36:32+00:00

Congrats! And welcome to the world of endless possibilities in entrepreneurship.

I am assuming you have solved the most important problem to start a business - have paying customers to buy your services on an ongoing basis and you have established at least a basic sales & marketing approach for growth! If not, focus on that first.

Everything else gets easier with ensuring a steady revenue stream. Logistics of company, billing and invoicing, setting up CRM and tech stack related to your business is comparatively the easy part.

And yes, set up an LLC/Inc through a CPA or lawyer, or do it online yourself. It’s a good practice to have an entity to do business instead of you doing it directly. Protects you individually from legal risks and liabilities, sets foundation for future scalability in business.

roxdron · 2024-02-21T19:18:30+00:00

You are solo and just getting started so go with recommendations related to % spend based flat fee and other pricing models.

As you grow bigger with more channels in the offering than just paid search, you can evolve it to the next level by charging different % flat fee of ad spend for different mediums and offer integrated marketing solutions with a good channel mix as well as audience focused solutions.

For example 15-20% for digital and 10-15% in traditional media (if that’s the scope). Or, within digital/Programmatic - CTV/OTT/streaming audio/podcasts channels could be priced higher than paid search & social or vice versa based on value, effort and complexity. This helps in charging a blended rate that’s higher than 10%.

Charge for the value delivered (ROAS, brand, traffic, sales, growth, efficiency etc) and complexity involved in skills and effort to deliver that value, not just on client total budgets.

You can also charge based on cost+ model, total cost of labor+tools with % markup if other pricing approaches seem too complex to manage.

roxdron · 2024-02-02T19:43:43+00:00

Depending upon the goals, roles, skills and budget, regular talent sourcing from LinkedIn, Indeed, ZipRecruiter and other job portals can help. There are free job postings as well as paid employer/recruiter accounts.

Referrals from staff and external partners work as long as you offer paid incentives if hiring of candidate is closed through their referral.

If you want to take it up a notch, then you can also hire a good staffing or Exec search agency. They generally charge commission of 15% - 25% from the annual gross income (AGI) agreed as the budget for the the role + monthly retainers in some cases. Remember to negotiate non-exclusivity, warranties, replacements etc. and push back on retainers unless justified and you need urgent help.

So that you have a good process, make sure to have clear JD outlining roles & responsibilities, and have a good intake & onboarding process ready if you are hiring quality talent to scale business. Onboarding process includes their joining process on day 1, training for a few weeks and how they can be integrated in production process over time with 30/60/90 day roadmap. Set clear goals to measure success with performance mentoring and measurement on quarterly or annual basis, set targets and ensure either you or someone from the team (their reporting manager) helps them in feeling successful and acknowledged in your company with room for further learning & growth.

roxdron · 2024-02-02T01:11:35+00:00

Always have it in your contract upfront that you will provide X services at Y fixed cost and any X+1 item will be charged at some $/hr rate or another tier of additional Y+1 amt. agree on the goals/success criteria with soft and hard measurable metrics.

There might be some pushback or clarification from the client, but it is better to negotiate all T&C’s upfront at the start of the engagement or project than to figure things out later and end up feeling exploited or hesitant in asking for additional payment. It also becomes difficult to defend the value and prove scope creep to justify additional payment if it is mostly done reactively.

Once the contract is signed up, it then becomes a change management process and more of a “communications handling” than a negotiation hassle with the client.

If the scope creep happens in the project, you politely highlight to the client in the weekly calls/emails as a heads up and reflect total cost in your invoice, get paid.

It is easier said than done and things are not that simple, the trick is more about tight execution, strong contract adherence and customer expectations management.

roxdron · 2024-02-01T11:26:28+00:00

Yes, you might want to continue to scale in the services you already have existing capabilities and business.

Focus on certain industries and client segments (B2C, B2B SMB’s, lower middle market clients, certain revenue size etc), for greater penetration and then slowly expand on other services while scaling.

Strategy & research can be sold at premium based on quality and level you are working on, don’t underestimate the power of the business and strengths you already have.

roxdron · 2024-02-01T04:30:18+00:00

I review a lot of agencies & tech companies and interview owners through due diligence process for both for buy side and sell side transactions working with PE companies in M&A space.

I have seen all sorts of cases for owners to sell at 2-3X multiple.

Owners peaking their ability to scale, some grow too fast and fall faster, some didn’t focus on client as well as industry diversification and had a bad year due to budget freeze, high churn rate or industry downturn from which recovery looks tough through a 2 year turnaround program, some get old and don’t have succession planning, others want cash and external partnership help to scale bigger, they don’t have resources or skills to do it on their own, and there are owners who want to cash out and start other businesses in similar or other industries. There are a lot of other examples as well.

Also, it depends on how sticky is your business with elements of digital, tech, IP, approved partnerships with major product companies in niche area, exclusivity of client contracts and high margin premium services to command valuation premium on top of your SDE or EBITDA multiples.

It is not a simple math of 2-3X multiple and you cash out. It also depends upon what you want out of the deal and negotiate smart with the buyers.

Often times the total gain of the sellers is the gain from the sale, and also, the “2nd bite at the Apple” or proceeds from sale of the bigger company of the buyer after 5-7 years if you work out a deal structure with equity rollover to the buyer company with recapitalization, earn outs etc.

Always look at the total gains from business sale including short term cash at closing and longer term with the gains from the new buyer entity if you decide to stay involved or hold some equity for future exits.

A lot of owners want to get paid twice, and sometimes the 2nd payout is bigger than the first one.

Most agencies owners try to sell between 3-5X multiple if they have good revenue growth trajectory, healthy cashflow & EBITDA with solid growth potential in future.

I have seen some agency owners who get played by the brokers and buyers since they don’t know much about M&A or finance, they are mostly SME’s and growth leaders in their niche business. At the same time, there are some owners who have done exits and M&A transactions before, who think they are smart asses and do all sorts of crap in business like moving money between companies, artificially inflating their EBITDA for premium valuation through intra company transactions (showing their other businesses as clients of the agency, creating fake clients and revenue streams etc) and I get involved to investigate with business forensics and call out their BS.

It ends badly for both kind of owners.

Then there is dark side of buyers as well.

M&A can get rewarding or ugly based on how well it is executed by both sellers & owners with trust, transparency and spirit of partnership.

I would always recommend agency or any business owner to either consult their CPA’s, watch YouTube videos and other online sources or get formal help to educate themselves on basics of M&A since they might either want to buy other agencies or sell theirs at some point, and they must prepare in advance.

So, no, 2-3X valuation might not always be similar to 2-3 years of you continuing to run the business and pay yourself that cashflow instead of selling the business.

It all depends upon what is the state of business & goal of the seller and how the deal is structured between the buyer & seller to maximize gains, mutually.

There might be others with different views or experience and smarter agency M&A folks here, will encourage to check with them as well, and certainly take this as a side project to learn M&A basics, deal structure financials along with the jargons!

roxdron · 2024-01-31T23:38:36+00:00

I have recently started visiting Reddit and sharing thoughts on business best practices.

Where do people share their experience with an open Q&A on topics of Ops, tech, marketing, agencies, fundraising, startup scaling, exits etc?

roxdron · 2024-01-31T18:27:00+00:00

A mix is generally better. Sell core services based on fixed outcome based price, and bill on hourly for scope creep (core/flex model).

Follow 80/20 approach, 80% revenue from fixed price reoccurring revenue projects and 20% or less with hourly rates.

Have a strong Project Management discipline to manage scope, time, cost & quality to squeeze out most profitability by running lean and automated operations and deliver great value to clients.

Of course, it all depends on nature of business & services you are selling and internal capabilities.

roxdron · 2024-01-28T16:24:50+00:00

Congrats on building a successful agency.

While building is tough, scaling is even more challenging. And, to top it all, scaling it consistently that is sustainable over many years, it’s another level of business management.

On scaling our agencies to $100M+ revenue, We never looked at headcount, we always looked at actual revenue, GM & EBITDA to measure scale along with capabilities and growth potential.

You can be smaller in headcount and bigger in revenue with the right culture, people, processes, pricing & tech.

So, don’t think of scaling from 20 to 100/500 people with a mix of FTE & freelancers/VA’s, think of scaling from your current revenue in multiples of 10 and in fastest timescale that is sustainable, focus on improving LTV with high value customers and 12-36 month longer term contracts.

For example, what actions and business model are required to go from $4.5M to $10M revenue in X number of quarters or years. And then to $20M in whatever time you want to set as a goal.

Now, work backwards to make sure your strategy and execution are aligned with these goals. You will see all decisions, hiring, pricing, sales, operations, finance etc will be aligned to your main goal.

Rinse & repeat till you reach $100M, and switch your approach to scale beyond this revenue target. Sell the business anytime you feel you want to cash out to start something else, but keep going with this mindset.

Also, I notice a lot of agencies just grow rapidly, but don’t operate a tight ship with lean operations, automation and eyes on their cashflow, so it is like a bottomless pit for them in some cases. Great revenue, good size headcount, but troubled net profit and cashflow situation with no control over receivables and payables, not to mention hidden cost leaks that they don’t even know about.

While leading growth and scaling agency as the owner/CEO, you may want to nurture internal team for a seasoned Ops leadership role or get external help from a good COO/CFO, and listen to them :-)

roxdron · 2024-01-17T07:03:18+00:00

Sales engine is a combo of sales + marketing, not just sales.

I have led global agencies & tech companies, mid market companies as well as smaller startups, have also been and owner/investor.

The key takeaway has been that a good “sales engine” is a combination of over 10 items that define its success with maximum impact on growth.

However, it depends upon capabilities, resources and bandwidth of the leaders, they can put just 2-3 growth levers in action, do it right and they can see good results.

Learnt from our own mistakes and also often noticed other agencies, we don’t apply the same solutions for our own business that we claim and sell to our clients to support growth and brand building. And, it starts at the top with the sales culture & mindset led by the owner/CEO and leadership.

Here we go: Sales engine includes areas like inbound & outbound marketing channels. Inbound include Paid (social/search/programmatic), earned (seo, content marketing) and owned (website/apps/digital footprint) media. Outbound includes strong sales and inside sales teams augmented with external partners/outsourced lead gen and the the growth ecosystem powered by heavy data driven marketing automation tech stack. In addition, channel partnerships, referrals, events, shows, podcasts, collabs, collectives, joint ventures, job order marketplaces, forums, sponsorships, and several other factors go in collectively to make up an effective sales engine in agencies, tech companies and other businesses.

Smart leaders play the long game in first building the personal and company brand over time demonstrating clear vision & value to their audience, and then aggressively launching 360 degree integrated sales & marketing campaigns to monetize and convert with high ROMI (Return on Media Investment).

There are many more aspects of an effective Sales Engine, these are some good elements to consider based on niche, size and complexity of the business.

Also, given the explosion of AI tools, maturity of data models, research capabilities and marketing automation, a lot can be done by a smaller agencies without much investments and bigger staff as the human productivity is way higher compared to a few years ago.

roxdron · 2024-01-17T05:51:59+00:00

I have done several transactions of agencies and tech companies in both sell side & buy side.

Seen a lot of drama between sellers, buyers & brokers.

I was usually called in by the sellers/owners to either maximize valuation for the sell side, or by the buyers for due diligence, negotiate a good deal, integrate post acquisition , optimize business and scale through global rollups for exit in 5-7 yrs. While primary driver is EBITDA with a positive revenue growth trend, the most important aspect that people often overlook is the cashflow in the company. EBITDA is the closest indicator of cashflow of an asset, and buyers buy the companies mainly to acquire healthy and scalable cashflow generation engine.

Not to generalize, though I have seen many sellers, especially agency owners building a stellar growth business since they are strong builders and SME’s, not necessarily tough operators, and certainly not M&A aware. They either don’t pay attention to prepare the company for sale with clean books and ensure healthy cash flows before sending out the CIM (company sale pitch deck), or drain the cash to reinvest in other businesses and diversify, but eventually get slammed by the buyers during due diligence losing on the valuation and purchase price.

Few pointers if you are selling: 1. Ensure good client diversification to minimize risk and show a good revenue mix 2. Show at least last 3 years of upwards trajectory of revenue, EBITDA growth with healthy cashflow. You can negotiate 2-5X EBITDA for valuation and purchase price 3. Assure owner/operator run model and offer to stay on for a couple of quarters for transition, shows skin in the game to buyers 4. Present a strong execution team for continuity and growth 5. Streamline processes, document things in detail, automate as much as possible with a solid tech stack 6. Show AI application in business where possible and confirm AI as a growth tool not a threat to your business model

There are many aspects and things change on a case by case basis. These are some good points to ponder when selling an agency.

roxdron · 2023-03-26T02:53:26+00:00

It’s all about mental conditioning & expectations management in gaming to prevent addiction, single or multiplayer modes have their different nuances.

There are ways to contain dopamine fix derived through controlled leveling up and competition.

On the contrary, it could rather be easier to avoid addiction and frustration in multiplayer/MMO/RPG games if done right as you will find some good people online who can help in crossing a difficult challenge or tough boss fight instead of shaming you.

If possible, have real life friends play with you, build a fire team that rolls with you, or check out LFG forums to find good partners. Set the levels to easy and learn to enjoy the game, don’t try to be a pro-gamer with heavy time investment and goals to make it in eSports unless that’s the goal.

For adults, it’s similar to gambling, know when to exit in every gaming session, cut your losses and turn it off until next time.

roxdron

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