We wanted to determine if there were factors about a CEO that made companies more likely to become unicorns, and how CEOs and investors might leverage these findings to drive success. To find out, we analyzed the backgrounds of more than 100 CEOs of the fastest-growing B2C startups in the United States.
All the companies in our study had either been identified as a unicorn (a company valued at $1 billion or more) and/or received over $100 million in funding within the last three years.
They are all consumer-focused, including e-commerce businesses, online marketplaces, subscription businesses, and mobile apps. They represent a variety of industries, from apparel and fashion, beauty and consumer products to food and beverage, health and wellness, personal finance, real estate, social media, sports and entertainment, and travel.
There are six key findings from our research:
- Most CEOs for B2C unicorns are Founders (not external hires or executives promoted to the role of CEO).
Over 83% of the current CEOs in our study are Founders – they were there on day one, and they are still nurturing their business today. Less than 10% of the CEOs at these companies were external hires brought in to succeed the original CEO.
The rest came to the CEO’s chair through an inside track. About 7% of the CEOs succeeded the original CEO through an internal promotion, while c. 2% became CEO through a merger.
2. Prior experience as a Founder or CEO does not make an executive more likely to lead a B2C startup to unicorn status.
Only 50.4% of the CEOs of the fastest-growing B2C startups have prior experience as a Founder or CEO. Nearly as many had never been a Founder or CEO before. Intriguingly, 5.3% had never held any full-time role before.
3. Prior experience in the consumer internet sector does not make an executive more likely to lead a B2C startup to unicorn status.
Only 49.6% of the CEOs of the fastest-growing B2C startups had worked for at least one other consumer internet company before launching or joining their current company. Slightly more than half of the CEOs in our study had never worked for another consumer internet company.
The next most common industries for prior experience were Private Equity and Venture Capital, Consulting and Advisory Services, and Enterprise Software. However, CEOs were still about seven times less likely to have worked in any one of those industries.
4. Most Founder CEOs of B2C unicorns launched their companies before turning 40.
Nearly 75% of the Founder CEOs at the fastest-growing B2C startups launched their companies before they turned 40. Only 23.2% of the Founder CEOs launched their companies between the ages of 40-49, and only 2.1% launched their companies after 50.
In contrast, internal promotions and external hires generally step into CEO roles at fast-growing B2C startups much later in their careers. The median age of the Founder CEO at fast-growing B2C startups was 32, while the median age for a CEO who succeeded the Founder (via external hire or internal promotion) was 46. Note: Our sample size was small for external hires and internal promotions, so we cannot draw firm conclusions from this data.
5. Most B2C unicorn CEOs are men.
Men hold 92% of the CEO roles at the top B2C startups. Women occupy 8% of these roles. These percentages are comparable to data from Fortune 500 companies across all industries. As of the end of 2022, men held 90.6% of Fortune 500 CEO roles, while women held 9.4% of CEO positions.
6. Having an advanced degree does not make an executive more likely to lead a B2C startup to unicorn status.
Roughly 45% of the CEOs of the fastest-growing B2C startups have an advanced degree, while nearly 55% of them do not. Nearly 26% have an MBA, nearly 9% have another kind of Master’s degree, 8% have a JD, and 3.5% have an MD or PhD. Several individuals in our study had more than one advanced degree.
Summary and Key Takeaways
Most of the fastest-growing B2C startups are led by male CEOs who launched their companies before they turned 40. However, their experience before launching/leading these companies varies significantly. Here are some key takeaways for investors, current CEOs, and other executives who aspire to become the CEO of a top B2C startup in the future:
For Investors:
When deciding which companies/CEOs to back or which executives to hire when a Founder CEO steps down, many investors prioritize “been there, done that” executives with prior experience as a Founder or CEO and prior experience in a specific industry. However, our research found no evidence that either of those experiences makes a startup more likely to achieve unicorn status.
Roughly 50% of the CEOs of the fastest-growing B2C startups lacked prior experience as a Founder or CEO, and roughly 50% of them lacked prior experience working for another consumer internet company before launching or joining their current company.
Many times, a less-experienced executive from another industry brings a fresh perspective that helps disrupt an industry and propel a startup to tremendous success. We recommend that investors challenge any biases for “been there, done that” executives and consider talented executives who don’t have a Founder/CEO track record or experience in a specific industry.
For Current CEOs:
B2C startups serve diverse customer bases. Leadership teams and employee bases should reflect those customer bases as well. We recommend that all CEOs (Founders, external hires, and internal promotions) surround themselves with a diverse group of executives and advisors as they build their companies.
Gender diversity should be a top priority, especially given that most startups are led by men, and since women make up at least half the customer base for many B2C startups. Other forms of diversity should also be prioritized, including racial diversity, ethnic diversity, age diversity, and industry experience diversity. McKinsey’s research has found that companies in the top 25% for ethnic/cultural diversity on executive teams are 33% more likely to have industry-leading profitability.1
For Aspiring CEOs:
If you aspire to become the CEO of a top B2C startup in the future, our research suggests that your most likely path is to launch your own business and to do so early in your career. Over 83% of the CEO roles at the highest-valued and fastest-growing B2C startups are held by an original Founder/CEO who launched their business before turning 40.
If you are later in your career or do not want to launch a business from scratch, our research suggests that your next most likely path to a CEO role with a top B2C startup is to work your way up to a C-level role at a larger consumer company first. That progression would position you as a compelling candidate for situations when the original Founder/CEO of a top B2C startup moves out of their CEO role before the company has an exit.
Approximately 15% of the current CEOs of the top B2C startups landed their jobs this way. About half of these were external hires who took over as CEO on joining the company, while the rest served the business in another role before being groomed to move into the CEO role.
About the Author
Pete Leibman is a Principal at Calibre One, a leading global executive search boutique specializing in building leadership teams for innovators, entrepreneurs and companies undergoing technology or digital transformation. Pete joined Calibre One after launching an executive search and consulting practice called Stronger Talent. Before that, he worked at Heidrick & Struggles, a big five executive search firm. Pete’s career began in pro sports working for the NBA’s Washington Wizards. He was their #1 Salesperson for three years. He also created their Sports Careers Day, an event attended by over 25,000 people. Pete graduated Phi Beta Kappa from The Johns Hopkins University. You can connect with Pete on LinkedIn or by email at pete.leibman@calibreone.com.