In the world of high stakes startupsfounders face countless decisions that can make or break their companies. Perhaps no one is more critical or more personally challenging than determining whether they should stay at the helm as CEO.

Ben Francis, Gymshark's FOUNDERstepped aside as CEO in 2017, bringing in experienced retail executive Steve Hewitt. During this time, Francis focused on product development and brand building.

In August 2021, having gained valuable experience and perspective, Francis resumed the role of CEO when Gymshark's valuation had already grown to over £1 billion. Every founder must admire his rational choice to recognize his abilities and limitations.

Related: 4 Startup Strategies for Startup Success and Longevity

Founder-CEO

The startup ecosystem has long perpetuated the idea that founders should naturally transition into the role of CEO. High-profile success stories like those of Mark Zuckerberg at Facebook and Jeff Bezos at Amazon reinforce this notion. However, this one-size-fits-all approach often ignores a fundamental reality: the skills needed to conceive and launch a startup differ greatly from those needed to scale and manage a growing company.

Starting a company requires vision, creativity and skill innovate with speed. It often involves wearing multiple hats and making quick decisions with limited information. In contrast, leading a mature company requires strategic thinking, operational excellence, and the ability to build and manage teams effectively.

Taking Twitter as an example, while Jack Dorsey co-founded the platform, his initial tenure as CEO was short-lived. Only years later, after gaining more experience, did he return to the role. This shows that even great founders may not be immediate ready for the CEO role – and that's okay.

I've had countless conversations with great founders who feel stuck when committing to scaling a particular project. Each person has different strengths. Many founders excel at creativity and creating innovative products, but find the day-to-day operations of a growing company limited. Recognizing this disconnect does not diminish the crucial role of the founder; you would never ask a head chef to manage the restaurant's finances, would you?

Related: If you want people to follow you, don't be the boss – 8 steps to truly effective leadership

The Hidden Costs of Founder-CEOs

When founders insist on remaining CEO despite lacking the necessary skills, the costs can be substantial and far-reaching. One of the most damaging effects is its limitation in the acquisition and retention of talent.

High caliber executives are attracted to companies where they can learn from experienced leaders and see a path for their own growth. If a company is led by a founder who learns on the job, it may struggle to attract top-level talent. This creates a ceiling effect, where the company can never hire someone more qualified than the founder-CEO.

Moreover, this dynamic can lead to a dangerous echo chamber. Companies risk making costly strategic mistakes without experienced voices in the C-suite ready to challenge the founder's ideas.

A relevant case is WeWork, where Adam Neumann's uncontrolled control after the founder-CEO made questionable decisions and ultimately derailed the company's IPO plans, destroying billions in value.

Related: Stepping aside: When to step aside as a leader

Know when to step aside

Knowing when to transition outside of the CEO role shows maturity and true commitment to the company's success. Here are the main indicators that it may be time:

1. If you constantly feel overwhelmed or unprepared for the challenges you face, it may be time to seek more experienced guidance.
2. If the company's growth has stalled despite its strong market position, new leadership can offer new perspectives and strategies.
3. If you're more passionate about a product than management, or if you find yourself wanting to get back into the creative or technical aspects of the business, it may be time to move into a role as a Chief Product Officer or Chief Technology Officer .
4. If the company consistently struggles in key areas such as financial management, operational efficiency or scaling, it could benefit from more experienced executive leadership.

When the founders decide step asideit does not mean abandoning the company. Many find success in alternative roles that play to their strengths. A good example is the Chief Innovation Officer role, where the founder focuses on driving new product development and keeping the company on the cutting edge.

Alternatively, the founder may become an Executive Chairman or Board Member to provide strategic guidance and maintain key relationships while leaving day-to-day operations to the CEO.

When Google founders Larry Page and Sergey Brin hired Eric Schmidt as CEO in 2001, they could focus on product innovation while Schmidt steered the company through tremendous growth and a successful IPO.

I would even argue that most startups don't need a traditional CEO in the early stages. What they need is a founder, but these two roles have become interchangeable in today's startup landscape.

Remember, stepping aside is not an admission of failure; it is a strategic move to secure your company long term success. By putting ego aside and focusing on what's best for the business, founders can often achieve much more than they can by insisting on remaining CEO. The true measure of a founder's success is not their title, but the lasting impact of the company they created.

Ask yourself, would you rather run a mediocre startup or be the founder of an extraordinary company?