How We’re Hiring A CEO For Our $85M+ Business
By Noah Kagan
One of the BEST decisions I’ve ever made was hiring the perfect CEO for AppSumo.
Ayman Al-Abdullah has been running the ship for the last six years. Alongside the amazing team he’s hired, Ayman led the business from $4M to $85M in revenue (i.e., over 2,000% growth).
Which honestly is WILD.
As we continue to help more customers and partners grow their businesses—ours grows as a result.
And it’s not slowing down.
So Ayman recommended to the board and me that we find a CEO who can help lead our next growth phase—someone with expertise in scaling a company at this rate.
In this article, I’m sharing our exact process to find our next CEO.
(Spoiler: we’ll pay you $100,000 if you help us find the one.)
You might not be a CEO or hiring one right now. But I’m sharing this because the overall framework can be applied to any level of hiring. I even recorded this video to share our approach with you gorgeous people.
How We’re Hiring a CEO
About AppSumo
Today, AppSumo is the leading digital marketplace for entrepreneurs.
But back in 2010, I started the company just to make $3,000 a month and move to Thailand.
Fast forward to 2021—we have a team of 80+ IMPRESSIVE people and are on pace to make $85M in total revenue (if not more).
So much has changed over the years. And I attribute a ton of our success to hiring Ayman as the leader of the company.
But what worked when we were a scrappy startup won’t take us to the next level. So now we’re looking for the right person to get us to this next milestone.
Recently, I sat down with Ayman to discuss everything. I LOVED how he framed the 3 stages of a company:
- Startup. Get the business off the ground and validate the core offering. ($0 to $1M total revenue)
- Grow up. Set the team, strategy, and core processes. ($1M to $100M total revenue)
- Scale up. Create the machine that runs the machine. ($100M to $1B total revenue)
It’s important for everyone to know at which stage they excel.
I love the startup stage. Ayman’s superpower is the “Grow up” stage. And now AppSumo is entering the “Scale up” stage.
To be clear, we’re just kicking off this search. We haven’t done it yet. I’m just sharing it publicly because I think it will be helpful for many other businesses out there.
The CEO Search Process
#1 Figure out what kind of CEO we want
Step one is being very CLEAR about what we want. So we’ll begin our process by sitting down with key stakeholders to get input on the type of CEO we want running the company.
Ayman breaks this down with the five fundamentals of a great CEO:
- People. Everything starts with people. It’s critical to get the right people in the right roles.
- Strategy. We can do anything, but what’s the best direction to go? A strong CEO has a clear vision and serves as the compass.
- Execution. Ideas are just half the battle. Great CEOs implement the systems, processes, and KPIs needed to actually make progress on the strategy.
- Cash. If you run out of money… game over. It’s a key aspect of leadership that should be obvious, but it’s often overlooked.
- Psychology. A company grows to the limits of the leader. The leader grows to the limits of their psychology.
Another framework we’re using in our search is called MoSCoW.
(Must Have, Should Have, Could Have, Won’t Have)
The exercise helps us identify the key qualities for the new CEO. Here are a few must-and should-haves:
MUST HAVE:
- A strong vision
- Scaling experience (from 100 → 1,000+ people & $100M → $1B in revenue)
- Executive recruiting experience
- Data-driven decision making/business intelligence experience
- 1–3+ year strategic plan
- Culture fit (a similar sense of humor, identifying with our voice, etc.)
- Experience owning a P&L
- Fundraising experience
- A belief in our mission (helping small businesses grow)
SHOULD HAVE:
- IPO Experience
#2 Use our network, recruiting firms, and customers to build a pipeline
Instead of keeping our search hush-hush, we decided to make a PR event out of the recruiting process. So we’re creating YouTube videos, blog posts, and podcasts as a way to extend our reach.
We also looked for a recruiting firm specializing in finding CEO’s for fast-growing startups. After tons of calls with recruiting agencies, we landed on one that clearly stood out. They showed up with six executives on the call and absolutely blew us away with their pitch deck and understanding of our business.
But we’re not just going to hope the firm finds us someone epic. We’re going to be proactive with the search. After all, before Ayman was our fearless CEO, he was an AppSumo customer (a.k.a., a Sumo-ling). And we realized there are MANY remarkable Sumo-lings out there we want to share this process with.
I would LOVE to hire another Sumo-ling or pay them a $100,000 referral bonus* if they can help us find the CEO. (*More on that at the bottom.)
#3 Interview tons of CEOs
The tricky part about interviews is that the people who interview the best may actually end up being the worst. Think about it—they have the most experience interviewing while the great people have the most experience working.
Every key leader at AppSumo will be a part of the interview process.
We’ll be looking for the following:
- Have they solved problems at their company that we’re currently facing at ours? How? The best in the world have done it before, giving us key insights during the interview.
- Did they go above and beyond? The best ones stick out.
- Ayman certainly did when he made a video for his first interview. I was blown away.
- Our VP of Operations, Ilona, also did when she interviewed. She actually wrote a mockup of a full lifetime deal page for herself—detailing the value she’d bring to the company. Epic, right?
- Do they pass our “Helsinki Test?” The Helsinki test is an assessment of culture fit. Imagine if we get stuck on a layover in Helsinki. Would we be pumped to hang out with this person?
The answer to each of these questions has to be a super clear YES—otherwise, it’s a hell no. There’s no in-between.
We use internal hiring surveys to rate the candidates on a scale from one through ten. Anyone below an eight won’t get hired. What can we say? We’ve got high standards.
#4 Finalize with CEO
Once we decide on our CEO, we’ll then finalize their pay structure, aligning the pay with the best interests of the company. When incentives align with the success of the company, it’s a win for everyone.
For the CEO role, we’re offering a competitive total compensation package including base, equity, and bonus.
After determining salary, pay structure, and contracts, that’s when the real work begins.
#5 Training/onboarding/transitioning for 6+ months
Most people think the process stops here and the CEO just goes and knocks it out of the park. (I wish.)
Think about it: there’s so much the new CEO will need to learn about all areas of the business:
- Getting to know the people and company culture
- Getting clear on the strategy and company’s roadmap
- Forming the execution plan and how the business units operate
- Understanding the cash, P&L, and financials
- Mapping their psychology and leadership style to the company
Every business is different, but I’ve found it takes at least six months to bring a CEO up to speed. But ultimately, it will be well worth the wait—both for the company AND all the amazing Sumo-lings.
Finding the perfect person will be a group effort. And we’ve decided to spice up the search a little bit with a cash bounty.
$100,000 CEO BOUNTY!!!
If you read this article and thought, “Wow, I know the perfect person for this role,” well, you’re in luck.
We’re giving away $100,000 to whoever helps us find AppSumo’s next CEO!
Here’s how you can win:
- Email CEO@appsumo.com with the full name and LinkedIn URL of the CEO you’re recommending
- If we hire them from your introduction, we’ll give you $100,000!
- Note: you must actually know the person
It’s been such an EPIC 11-year journey with AppSumo. I’m so grateful for the amazing teammates and incredible Sumo-lings out there. I’ve never been more excited about the company and the direction we are heading!
Now let’s get to work.
Be Epic,
Noah Kagan