Every CEO needs to assume a new persona - Wartime CEO – to navigate through these volatile markets.
In contrast to the boom times of 2021, when a CEO could focus on big visions and company culture, in wartime, you are fighting for survival. Funding rounds take longer, valuations are down, and sales cycles are slower, putting immense pressure on runways and nerves. In the face of this existential threat to your companies, founders have to adapt quickly.
I am fortunate to know several wartime CEOs who have battled through challenges and come out on the other side standing strong.
Didi Gurfinkel, the CEO and founder of Datarails, is a classic example. Their financial planning and analysis platform is now growing rapidly across more than 600 customers with annual revenue tripling and a valuation of nearly half a billion dollars. This success was in no way a foregone conclusion.
In fact, according to Yanai Oron, Managing Partner at Vertex, Datarails was long considered the ‘black sheep of the portfolio’. Founded in 2015, Datarails only found its target audience in mid-2019, after years of searching for product-market fit. At one point, they were down to only 10 employees after having to cut most of the team.
But as a Wartime CEO, Didi found a way to steer the ship, realizing that his survival depended on finding a way to reframe their product to find and attract to a larger audience.
Another Wartime CEO is Lior Akavia, co-founder of Seebo. Founded in 2012, Seebo started with an IoT development platform targeting consumer product manufacturers, like manufacturers of toys, sports accessories, and home appliances. Through a series of hard pivots over the course of a decade, Akavia took the company all the way to a successful exit.
Although different wars, both Didi and Lior successfully led their companies through numerous battles. Founders can take a few lessons from their experience and apply them today.
The first principle is flexibility.
“Everyone has a plan until they get punched in the face,” said Mike Tyson. While it is natural to become attached to the product you have poured your heart and soul into, it is vital to embrace flexibility and be open to change during a crisis.
For Didi, this meant taking ego out of the equation, which allowed him and his team to learn quickly from their mistakes and find the right message for their end customers. Rather than selling to large companies as a regulatory compliance solution, Datarails started selling to SMEs.
Once they packaged the product differently and found the right audience, the trajectory of their company took off.
For Seebo, Lior explained that while their IoT platform sounded good on paper, the target market didn’t take off. The company passed $1M in ARR with 30 paying clients, but Lior recognized that the demand for connected products from end consumers was not not growing as expected. As a result, he initiated a massive product pivot, including terminating all agreements with clients, major downsizing of the team, and basically taking the company back to pre-seed stage. This bold decision paid off when Seebo found success in AI-based process optimization, using industrial IoT data. In 2020 the company started to see exponential growth and was acquired in 2022 by Augury for over $100M, 4 years after their pivot.
Leaders must embrace change quickly.
During wartime, strong CEOs understand that decisions must be made with speed over precision. As Didi notes, “there is no time to ‘check’ or ‘see how this works.’ Sometimes decisions simply need to be made in an uncertain environment, and made fast -- time is of the essence here.”
Wartime often introduces challenging conditions - cognitive overload, incomplete information, and clashing priorities. The ability to process available information and rapidly decide what to act on with conviction can be a lifeline for your company during a crisis.
Communication is key.
Talking to Lior and Didi, both emphasized the significance of reinforcing a core team of company leaders and strengthening the communication with this team.
During challenging times, hard decisions must be made, and feelings of panic start creeping through a company. Having a core leadership team who are in the loop ensures as much stability and transparency as is possible during these times, important factors to ensure a healthy company culture even amidst a crisis.
Lior recounts, “It's critical to create a core team that will very likely go through the tough moments and ideally to plan and make the hard decisions together. We had a core team like this and when we had to announce changes, we did this as a team at a single point when everyone was prepared and knew what was going to happen and how to handle what was to come.”
Projecting optimism is essential.
Transparency is a positive trait, yet in times of ‘war’, keeping up an optimistic front takes high precedence to inspire your team, customers, and investors and boost their resilience.
Didi shares his thoughts on why optimism is a classic wartime CEO trait: “During wartime, people observe you to see how you react, how you handle stress, and whether you believe you can win. You can't expect your fellow leaders to show strength if you show weakness.”
Sometimes leaders underestimate how much their employees, customers, and partners look to them for information. If you project optimism, it will give your employees a sense of purpose and their customers and investors a sense of security.
Prepare for a marathon, not a race.
Leading a company is inherently a stressful position. Leading a company through wartimes only amplifies this stress and startups can face these periods for months or even years so nutrition and exercise are essential.
Lior explains, “your job at these times is not necessarily to do the heavy lifting by yourself or micromanage everyone around you- your first job is to lead, and balancing your stress is a critical part of being able to lead at full capacity.”
He emphasized how vital it is to find your ‘release’, be it sport, therapy, or even simple walks on the beach or park to ‘clear’ your head and be present for the people who depend on you.
Didi and Lior made hard tradeoffs and radical changes to steer their companies from crisis to success. They showed openness to change, fast decisions, open communication, optimism, and they looked after their health to keep on running.
These are just a few wartime CEO lessons learned. We will have many more stories like this by the end of the year. This challenging environment turns founders into managers and the best will emerge with epic war stories. When the world spins out of control, it is often the changes we make inside that have the greatest impact.