GigaOM notes that the current CEOs are stepping down at two booming Internet startups. Both Reid Hoffman of LinkedIn, the business networking phenomenon, and Arik Czerniak of Metacafe, an online video sharing site, recently announced that they had chosen replacement CEOs. Both of these companies have been successful in raising financing, and both are valued at over $200 million dollars were an acquisition to take place.

It takes a special sort of person to pull a startup through the difficult initial phases of growth: a blend of creative vision, adaptability, and strategic flair. But once the vision is established and the startup has legs, it becomes important to have somebody at the helm who can execute that vision. Sometimes this is the same person, but often the visionary doesn’t fare well when required to focus on operations rather than tackling abstract, big picture issues.

If that’s the case, it’s best for the company (and for the CEO) if the CEO can see and admit they are no longer the man (or woman) for the job. That seems to be what’s happened with both LinkedIn and Metacafe, in both cases the exiting CEOs are remaining with the company, in roles that allow them to focus on products and strategy. It’s a win-win situation, the outbound CEOs get to do what they have demonstrated they are good at, and the companies get a CEO who can execute the vision.

There is a lot of prestige attached to the title of CEO, and in the case of an executive who has steered a startup through the difficult first years there is often a sense of ownership. It isn’t easy to recognize or admit that you are no longer right for the task, and it must have been a difficult decision for both Hoffman and Czerniak. But it was the right decision, and they are to be commended.

How can you tell that it may be time to take a new role within your startup? Here’s Cambrian House’s handy list of 5 signs it may be time to step aside as CEO of a startup:

1. The company is struggling or unable to maintain the level of success initially achieved on launch, and you feel that it has nothing to do with you
2. You identify possessively with the business, and refuse to consider acquisition offers (no matter how generous the terms)
3. Despite a solid vision and financing, you find yourself focusing more on re-thinking the vision than how to realize it
4. The competitive landscape has changed dramatically since you launched
5. The business relationships that you have to manage are no longer just investors and partners - the CEO’s role is no longer as much about growing the business as it is about maintaining position among your industry

According to some clichés these things tend to happen in threes. So, which startup CEO do you think needs to see this list and realize the time has come? Let us know in the comments, and be sure to give us your reasons.

Or, if you want to try being the CEO of your own startup, you can join the Cambrian House crowdsourcing community and start harnessing the wisdom of the crowd to launch your own idea.

This entry was posted on Tuesday, February 6th, 2007 at 6:08 pm and is filed under Startups / Entrepreneurship. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.