Founders vs CEO: What’s the Difference?

Do you know the difference between a founder and a CEO?

No.

Basically, there's a big difference between founder versus CEO. So Jason Fried of 37signals fame, he's arguing that it shouldn't be the case. So founder and CEO is a pretty common title. This is what Jason Fried is saying. And he argues that founder versus CEO is completely different because a founder is someone that actually injects risk into a company, right? The founder is usually coming up with new ideas. We should buy this company. We should come up with this new product line, this and that. He argues that a CEO is a stabilizer. A CEO is not necessarily trying to inject a lot of risk into the company, right? And he's saying this is why there's a problem with founder and CEO being intact, because like they're two different things. You should just be one or the other. And I thought that was an interesting perspective, and we should talk about what we think about it.

I literally had this conversation, or a conversation that mimics this, with my CEO, um, call it less than 10 hours ago.

Wait, your co-founder CEO or your CEO CEO?

Co-founder is no longer a CEO. He has Hasn't been for ages. So our actual hired gun CEO who came from Dentsu Aegis, and I was telling him, I'm like, we should buy a China shop. And he's just like—

He means a China agency, guys.

Correct. So agency, we call them shops, or slang for agency. We're like, we should buy a China shop. And he's like, no, we don't need to buy an agency in China. I was like, why not? It's the second biggest market. He's like, we already have a good partnership. And I was like, yeah, but it's not the same as owning. He's like, Neil, he's like, usually, you know, you do whatever you want and I'll tell you, like, go for it. But he's just like, at every holding company, he's like, you can Google the articles. There's been governments, the government in China has stepped into these agencies and there's been a lot of fraud or money issues or scams. And I was like, well, we could try to find a reputable one and use like an Ernst Young. He's like, Neil, there's been a lot of cases where you're getting people from these auditing companies being involved and holding companies, which are the big ad agencies that just keep buying more and more, losing their shirts just buying them because of fraud. Even if they're using like their Ernst Youngs or the PwCs or whoever it may be and amazing lawyers. He's like, we don't need this risk. And then he starts sending me links to articles and he's just like, look at all these examples of just people losing their shirt in China. He's like, it is a big market. We don't need the risk right now. He's like, let's spend our money in all these other markets that we still want to spend money in where there's tons of opportunities and very little risk. And he was giving me an example of like Japan. He's like, we still need to spend more money in Japan. I was like, yeah, we can do both. He's like, the thing with Japan is, he's like, you're less likely to have risk and fraud. I was like, why? He's like, the Japanese really believe in honor. And he's not saying that the Chinese don't, but culturally he's saying that they want their business to keep growing and growing. While a lot of the agencies in China, this is just from experience, we're not trying to generalize the Chinese population or the Japanese population. He's like, they figured out backdoor ways with accounting to inflate the numbers and they end up pulling a rug over a lot of the sellers. And they walk away with a ton of cash.

All right, so I wanted to take a second to tell you about the Agency Owners Association. So this is an agency peer group ran by my podcast co-host Neil Patel and myself, Eric Siu. And these were 9 and 8-figure agency owners respectively. And what I will say is, at the end of the day, you want to learn from people that have been there, done that. If you want to grow your agency to 7 figures, 8 figures, and beyond, this is the group for you. And we bring in other agency owners to speak as well. And it's a great peer group where you can help each other out. And you're gonna learn how to acquire more clients. You're gonna learn how to take yourself out of the day-to-day and to build the business of your dreams. And the cool thing, till November 30th, we are holding a special price and you can apply at marketingschool.io/agency. And the great thing about it as well, if you try to get into group, there's a 7-day free trial, right? So once November 30th hits, we're gonna increase the price by $200 per month. So right now you're getting it at the lowest price possible. So go to marketingschool.io/agency to learn more. And we'll see you inside. So the point of us saying this, by the way, is this is a classic example where the founder wants to inject risk, right? And I love injecting risk myself. This is why I love playing poker, right? Um, but you do need like a stabilizer, which I think Mike on your end is a very good stabilizer. And in this sense, you know, sometimes you have interactions where you might win. Sometimes, you know, it's not you're trying to win over— like, like sometimes he'll win the debate, right? And sometimes you'll win.

Yeah. And anyone— and, and he wasn't trying to say there's a problem with Chinese people. He's just saying culturally, this is what's happening with companies that are sold in China. There's a lot of amazing talent from China and it's a great place. It's just more so you got to deal with these issues. And as an entrepreneur, I just look at second biggest GDP, money to be made. Let's double down in China.

Yeah. So I have a couple of words to say about that. But again, this kind of reinforces the point. Maybe founder and CEO should be different and it shouldn't be like an ego thing. Like in Silicon Valley, it's like, oh, I'm the founder and the CEO. It's like, No, they're very different. And by the way, both of us— neither of us care about the title. I would prefer not to have a CEO title. It's just what it is right now. Um, but you know, I would prefer to be the one that's injecting risk into the company. Other— because if you don't inject risk, risk equals reward at the end of the day, right? If you keep letting things be the status quo, things will start to slow down. And then eventually the company— like what happens after the founder leaves all the time? Company starts to slow down.

Not—

I mean, okay, fine. Yes, Microsoft. Yes. Okay. Apple.

Right.

But how many of those are there? Like, for the most part, generally the companies start to slow down. You would agree with that?

Yeah, and also a lot of founders believe the CEO title is like very noteworthy or has a lot of notoriety, not noteworthy, a lot of notoriety. So they want to be that CEO.

Yeah, in the beginning, in your 20s, maybe you want that, but then you realize, nope, we'd rather not have it. So yeah, because there's a lot of work to do with it.

My brother-in-law recently sold his company to Dropbox, and he was the CEO of every single company. And him and I were talking, Eric knows him, we were talking like a week ago, and I was talking like, would you ever do a startup again in your life? And he didn't say yes or no. He's just like, I'm happy here at Dropbox. But he's just like, overall, if I was to do it again, I wouldn't be the CEO. I was like, really? I would expect him to be a CEO because he's always been. He's like, no, I don't want to be the CEO anymore. It's a pain.

Yeah. It's a lot of pain. Yeah, it's, I envy your role where it's a lot of focus on strategy, M&A, and just driving traffic. It's great. It's like, that's a great role. Like, just go let me be a marketer and the visionary for the company.

With no direct reports.

Yes, with no direct reports. The best, right? Dharmesh and Neil do this well. It must be an Indian person thing. I haven't learned that yet. But that is it for today. Again, from Frankfurt, Germany, this is Marketing School and Don't forget to rate, review, subscribe, and go to marketingschool.io/agency if you want to join the Agency Owners Association, and we'll see you tomorrow. Bye.