The CEO job is to to get started and go from Zero to one — but quickly it becomes maximizing the product of the complex multiplication…
The CEO job is to to get started and go from Zero to one — but quickly it becomes maximizing the product of the complex multiplication equation that describes the way your business creates value. This starts simple, something like the number of customers * the value of each customer = value creation, but quickly becomes a multi-variate equation with hundreds of inputs as you grow.
Everyone knows that any number multiplied by zero (no matter how big it is) is zero. In a startup, a failure in one area or one role, can make all the great effort in other areas worthless. Fixing the zero is typically the most impactful thing a CEO can do.
Rather than creating the next element to add to the equation, or doing everything you can to grow a number, CEOs who relentlessly fix the zeros in the value creation math will win. If you have a product that people love but gross margins are zero, it is hard to capture value. If you have an incredible innovation with zero differentiated or leveraged distribution mechanism you will capture zero value. If retention is zero, no matter how efficient your marketing channels are, you will create zero value etc.
I love to work with CEOs who invest the time and effort to turn zeros into numbers greater than 1 or eliminate them from the equation. It is hard to find the zeros, it is even harder to turn them into 1’s, but the hardest thing is deciding when to drop the zeros completely. This requires admission of a bad strategy or a failed tactic. This requires the strength to cancel a project or product, to stop marketing in a certain channel or to a specific audience or to end a relationship with an employee, advisor, partner or customer.
Eliminating zeros is painful, but at a startup, it will create way more value than focusing on growing other areas.