Which Startup Partner Should be CEO
By Susan Schreter - Take Command

Q.  My brother and I have been working at a startup cellular game business. We're close to marketing our first games to cell phone carriers. Does it matter who is CEO? (I'm female) We really don't care about titles but have to put something on our first business cards. Our goal is to eventually get financing and go all the way.

A.  Congratulations on entering a hot market for startup businesses! Cellular gaming is a relatively new industry with tremendous growth potential. As you probably know, phone carriers around the world are scrambling to add fee-based downloadable games, puzzles and music to generate more monthly revenues from their customers. They need content from imaginative companies just like yours.

You'll be pleased to know that venture investors have been investing in the cellular game "space" as they say because the profit margins for cell phone games are much higher than video games. Plus, companies can produce cell games and get them listed on carrier web sites in less than 3 months whereas more complex video games can take two or three years before reaching a store shelf. That's a fast return on development dollars.

But just because you are entering a growing market with high profit and cash flow potential doesn't guarantee you'll get funding. But watch out, the market is getting crowded. What matters is the strength of your business plan, customer acceptance of your games, and how well you and your brother manage your company's day-to-day operations.

So, who should be CEO? Actually, the right question to ask is who is better able to serve as CEO? In a small business or big business, the #1 job of a CEO is to make sure there is always enough cash to fund continued operations. CEO's should enjoy working with finances, making presentations to potential investors, and being the public "face" of a company. In startup organizations, the job of a CEO is to make key sales calls, establish vendor relationships and negotiate agreements with potential partners. It's a non-stop job.

If your brother dislikes travel and prefers the more solitary, creative process of writing code and building games, then I'd say your decision is easy. Your brother is better suited to a SVP Technical Development or Chief Technology Officer role.

It doesn't matter if a CEO is male or female to get venture funding. Smart investors don't walk away from a good, well-managed business with lots of financial upside. In fact, you may be at an advantage because your company's founding management team does include a female. Why? Studies show that 58% of women download cellular games for entertainment whereas only 10% of women play video games. Cellular carriers may look to your company for games specifically targeted to the emerging women's audience before your competitors.

If you and your brother have early success selling your games to carriers but can't convince investors to back your big growth plan, ask if the investors would be more inclined to invest with the addition of more experienced executive leadership. Sometimes adding top talent early-on is the fastest route to getting major venture capital backing and having the realistic opportunity to be a big player in a big industry. Good luck on your venture climb and let me know who gets the top spot!

Take Command Action Step

Once you decide business titles, spend some time writing out general job descriptions and areas of responsibility. This joint brother-sister discussion will minimize misunderstandings and sibling disputes. Also pay attention to areas that can easily fall through the cracks during your first days in business. Using outside sources to set up financial systems may be more productive than you or your brother struggling over accounting challenges. Seek experienced, yet affordable help. You can do it!

Do you need time-saving tips to help fund and grow your business? Ask Susan How! Write to small business funding expert Susan Schreter at susan@takecommand.org