3 ms·

Investors want a CEO. You can't tell them "we're co-CEOs" or anything other than "X is the CEO" or they'll think you have a problem. They'll fear a power strugg

by staunch 16y ago

Investors want a CEO. You can't tell them "we're co-CEOs" or anything other than "X is the CEO" or they'll think you have a problem. They'll fear a power struggle could cause instability. It's a red flag. Larry/Sergey were co-leaders (co-presidents or co-CEOs or something). I think it's actually the ideal case where two people are equally capable/willing to be the public face and big-decision maker. Tell that to investors though. On a personal basis there are real benefits to having the title CEO. If you were CEO of a successful company you have real credibility with press and investors. If you were CTO or COO you're going to be seen as 5% as important. When it comes time to raise money for a new venture or to talk to the press they're much more interested hearing from The Head Guy.

jacquesm 16y ago
It all depends on the stage you're in. When you are just out of the gate, building a product and getting your first customers having titles is silly. At a later stage it makes good sense. Whether or not 'investors want a CEO' depends on a lot of factors, the most important one being what stage the company is in, as soon as you incorporate you'll need a 'signing officer' (or two, or three, depending on the law), and maybe one of the people in the company is preferred for that role and so a natural transition from co-founder status to a CEO role is established. Don't be surprised if the guy that ends up in that chair is not the guy you originally envisioned. There are lots of situations in which investors don't want a CEO. Two co-founders looking for seed capital are going to have a problem getting themselves taken serious if one of them labels himself CEO and one of them labels himself CTO. Too many chiefs, no Indians. Agreed that having 'two captains' is not ideal, but should there be so much conflict that this is a problem the titles don't matter much. When your 'other half' walks out you have a problem regardless, and a title used to force an issue is not going to help in this respect. Finally, the title of CEO of a successful company is useful when starting a new company, it becomes part of your track record, and a successful company will have a CEO, but you first have to get to that stage. And a good CTO is just as valuable as a good CEO, to weigh the role of CEO as fully 20 times as important as that of the other co-founders is not at all in line with my experience.
- drusenko 16y ago
  I disagree with you. It seems there are two simultaneous things happening, and you are unfairly dismissing both. The attitude you're calling out is, as you rightly mention, harmful to a startup. Anybody who refers to themselves as the "CEO" in internal discussions early on has a problem. You're right -- everybody in a startup does as much of everything as they can. However, as the commenter above pointed out, there is another important function being played while handing out titles early -- establishing a basic leadership structure -- and this is vital. Being on top of the leadership structure doesn't mean you sit around and order people all day, or refuse to do work; both of those would be the hallmark of a horrible leader. The leader is someone who takes ultimate responsibility and who has the final call in all decisions (should it be necessary). Early on, that might not really show up much. A good "leader" would be the person who makes sure the little things get done and on time, like prioritization meetings, or helping to hold people accountable if/when they are underperforming (both of which can be unpleasant). Early on, a good leader would recognize that it would be horrible to exercise any kind of overriding call as consensus is better in a very small group. Over time, however, having a clearly defined leader from the beginning helps in the outwards presentation of the company (to investors or prospective employees) and, most importantly, prevents the company from failing to due a power struggle or a misunderstanding of the leadership chain when it comes time to formalize it. I've seen it happen to several companies -- it isn't pretty, and is entirely avoidable.
  - jacquesm 16y ago
    You need a leader for one thing only at this stage, which is to break deadlocks, but it usually better in such situations to find outside counsel. I usually have someone on board specifically as a tie-breaker in the case of deadlock. In one of the companies I'm involved in the shares situation is exactly balanced so when we're deadlocked we ask the bookkeeper. Everybody gets to state their case, he casts his vote, we move on. Having a 'clearly defined leader' is as good as having a single founder and a bunch of employees, you will never get the kind of teamwork and commitment from your co-founders if one of you starts to behave like 'the boss' until it is absolutely necessary. The places where you see power struggles are those places where decisions are not made on their merits. Attempts to force such decisions usually backfired, and as you say, it isn't pretty. Once you start taking on employees, or investors that ask for a clear corporate structure, you're probably at the right time to start to solidify those roles, so we agree there. But that initial phase can last for a long time, and naming your 'CEO' too early can cause real problems.

by staunch 16y ago

jacquesm 16y ago

It all depends on the stage you're in. When you are just out of the gate, building a product and getting your first customers having titles is silly. At a later stage it makes good sense. Whether or not 'investors want a CEO' depends on a lot of factors, the most important one being what stage the company is in, as soon as you incorporate you'll need a 'signing officer' (or two, or three, depending on the law), and maybe one of the people in the company is preferred for that role and so a natural transition from co-founder status to a CEO role is established. Don't be surprised if the guy that ends up in that chair is not the guy you originally envisioned. There are lots of situations in which investors don't want a CEO. Two co-founders looking for seed capital are going to have a problem getting themselves taken serious if one of them labels himself CEO and one of them labels himself CTO. Too many chiefs, no Indians. Agreed that having 'two captains' is not ideal, but should there be so much conflict that this is a problem the titles don't matter much. When your 'other half' walks out you have a problem regardless, and a title used to force an issue is not going to help in this respect. Finally, the title of CEO of a successful company is useful when starting a new company, it becomes part of your track record, and a successful company will have a CEO, but you first have to get to that stage. And a good CTO is just as valuable as a good CEO, to weigh the role of CEO as fully 20 times as important as that of the other co-founders is not at all in line with my experience.

drusenko 16y ago
I disagree with you. It seems there are two simultaneous things happening, and you are unfairly dismissing both. The attitude you're calling out is, as you rightly mention, harmful to a startup. Anybody who refers to themselves as the "CEO" in internal discussions early on has a problem. You're right -- everybody in a startup does as much of everything as they can. However, as the commenter above pointed out, there is another important function being played while handing out titles early -- establishing a basic leadership structure -- and this is vital. Being on top of the leadership structure doesn't mean you sit around and order people all day, or refuse to do work; both of those would be the hallmark of a horrible leader. The leader is someone who takes ultimate responsibility and who has the final call in all decisions (should it be necessary). Early on, that might not really show up much. A good "leader" would be the person who makes sure the little things get done and on time, like prioritization meetings, or helping to hold people accountable if/when they are underperforming (both of which can be unpleasant). Early on, a good leader would recognize that it would be horrible to exercise any kind of overriding call as consensus is better in a very small group. Over time, however, having a clearly defined leader from the beginning helps in the outwards presentation of the company (to investors or prospective employees) and, most importantly, prevents the company from failing to due a power struggle or a misunderstanding of the leadership chain when it comes time to formalize it. I've seen it happen to several companies -- it isn't pretty, and is entirely avoidable.
- jacquesm 16y ago
  You need a leader for one thing only at this stage, which is to break deadlocks, but it usually better in such situations to find outside counsel. I usually have someone on board specifically as a tie-breaker in the case of deadlock. In one of the companies I'm involved in the shares situation is exactly balanced so when we're deadlocked we ask the bookkeeper. Everybody gets to state their case, he casts his vote, we move on. Having a 'clearly defined leader' is as good as having a single founder and a bunch of employees, you will never get the kind of teamwork and commitment from your co-founders if one of you starts to behave like 'the boss' until it is absolutely necessary. The places where you see power struggles are those places where decisions are not made on their merits. Attempts to force such decisions usually backfired, and as you say, it isn't pretty. Once you start taking on employees, or investors that ask for a clear corporate structure, you're probably at the right time to start to solidify those roles, so we agree there. But that initial phase can last for a long time, and naming your 'CEO' too early can cause real problems.