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I don't usually cling to the status quo, but I do believe that the CEO must have the ability to set the vision and get the "right people in the right seats." Ev

I don't usually cling to the status quo, but I do believe that the CEO must have the ability to set the vision and get the "right people in the right seats." Every management book in the last decade pays homage to this idea put forward in Jim Collins' book Good to Great. I guess this model presumes that the right people will be supplied by the investor to fill predetermined seats. Does the CEO have a say in that? Is it possible to fill seats without the CEO in the decision making process? If they do have a say prior to investment, then why not raise capital and hire people of that caliber regardless? If the issue is that some founders with good ideas are simply clueless and a team that knows better must be built around them, it seems conflict between the CEO and the new team will be inevitable.

echelon 7y ago
When you're new to everything, how do you find the right people for those seats? How do you perform a proper search while wearing lots of other hats? I suppose it's a never-ending exhausting task?
- staticautomatic 7y ago
  You fuck most of it up. Repeatedly. If you're lucky, you don't fuck it up so badly or in such a way that you can't recover from it.
- AndrewKemendo 7y ago
  This assumes that the CEO is effectively incompetent. Startup CEO is an exhausting task, but it's not never ending that's why you recruit and hire. Top level (C suite, VP etc..) recruiting is one of the primary jobs of a CEO and being able to do that effectively is a core task. I think this really underscores the fact that VC's don't fundamentally care about the leadership abilities of their companies. They are investing in a growth curve around a product or series of products primarily, not strong leaders.
taurath 7y ago
How do you build trust in your own team when an investor installs or pushes people they have a long relationship with into your company? Where will loyalties lie?
- milansuk 7y ago
  They have to be 'A' players. They are loyal to the project/company. They don't play "games".
  - toss1 7y ago
    True, the question is, how do we ensure that they are in fact A_Players, and what is the recourse if they are found not to be A_Players or not loyal to the project/company or are in fact starting to play games, or even just inadvertently stray from the goals without mal-intent? The tangle of thorns surrounding trying to get any kind of satisfaction guarantee, or complete alignment of interests seems rather broad, tall, and deep...
- katzgrau 7y ago
  Exactly. Who's really the boss?
wpietri 7y ago
Sure, but there's a question of who you need when. For example, f you're a non-technical founder doing a startup that's more a business model innovation than a tech innovation, you need a solid early team, but you don't really need the full-time services of a strong CTO to do the hiring and set the initial technical direction. If you end up with product-market fit and need to grow beyond one developer team, only then do you really need somebody with more tech experience to be around full time. Honestly, a lot of pre-fit startups would be better off filling some roles like this. At one point I talked with some friends about setting up a venture labor firm. Startups are risky as hell, and from the labor side it would be great to get some of the de-risking that comes with a portfolio approach. It would also let you share great don't-need-them-all-the-time people without a lot of shenanigans. E.g., visual designers, ops consulting, user research, security expertise, and other technical specialties. So yeah, the CEO should still be able to get the right permanent people in right seats once there's a real seat for them. But this way you don't have to do without the skills until you have a seat.
- katzgrau 7y ago
  > it would be great to get some of the de-risking that comes with a portfolio approach. Right, but at some point "de-risking" seems like it can easily become "we're installing our own leadership team/ops staffers to make sure this company moves in the right direction." I think it'll wind up divorcing the company from the vision/passion of the founder — and that might be a fatal and overlooked risk in itself.
barry-cotter 7y ago
https://en.wikipedia.org/wiki/Good_to_Great https://en.wikipedia.org/wiki/Good_to_Great > Steven D. Levitt noted that some of the companies selected as "great" have since gotten into serious trouble, such as Circuit City and Fannie Mae, while only Nucor had "dramatically outperformed the stock market" and "Abbott Labs and Wells Fargo have done okay". He further states that investing in the portfolio of the 11 companies covered by the book, in the year of 2001, would actually result in underperforming the S&P 500.[6] Levitt concludes that books like this are "mostly backward-looking" and can't offer a guide for the future.
- octodog 7y ago
  That's not a very helpful criticism. If the companies go on to fail or make mistakes it doesn't mean that their previous good work or strategy is invalid.
  - cjblomqvist 7y ago
    But it does prove that it's armchair research, which is of little value in providing facts about which strategy you should go about. It does provide some food for thought, but probably in a prescriptive manner which can be dangerous if taken seriously.

echelon 7y ago

When you're new to everything, how do you find the right people for those seats? How do you perform a proper search while wearing lots of other hats? I suppose it's a never-ending exhausting task?

staticautomatic 7y ago
You fuck most of it up. Repeatedly. If you're lucky, you don't fuck it up so badly or in such a way that you can't recover from it.
AndrewKemendo 7y ago
This assumes that the CEO is effectively incompetent. Startup CEO is an exhausting task, but it's not never ending that's why you recruit and hire. Top level (C suite, VP etc..) recruiting is one of the primary jobs of a CEO and being able to do that effectively is a core task. I think this really underscores the fact that VC's don't fundamentally care about the leadership abilities of their companies. They are investing in a growth curve around a product or series of products primarily, not strong leaders.

taurath 7y ago

How do you build trust in your own team when an investor installs or pushes people they have a long relationship with into your company? Where will loyalties lie?

milansuk 7y ago
They have to be 'A' players. They are loyal to the project/company. They don't play "games".
- toss1 7y ago
  True, the question is, how do we ensure that they are in fact A_Players, and what is the recourse if they are found not to be A_Players or not loyal to the project/company or are in fact starting to play games, or even just inadvertently stray from the goals without mal-intent? The tangle of thorns surrounding trying to get any kind of satisfaction guarantee, or complete alignment of interests seems rather broad, tall, and deep...
katzgrau 7y ago
Exactly. Who's really the boss?

wpietri 7y ago

Sure, but there's a question of who you need when. For example, f you're a non-technical founder doing a startup that's more a business model innovation than a tech innovation, you need a solid early team, but you don't really need the full-time services of a strong CTO to do the hiring and set the initial technical direction. If you end up with product-market fit and need to grow beyond one developer team, only then do you really need somebody with more tech experience to be around full time. Honestly, a lot of pre-fit startups would be better off filling some roles like this. At one point I talked with some friends about setting up a venture labor firm. Startups are risky as hell, and from the labor side it would be great to get some of the de-risking that comes with a portfolio approach. It would also let you share great don't-need-them-all-the-time people without a lot of shenanigans. E.g., visual designers, ops consulting, user research, security expertise, and other technical specialties. So yeah, the CEO should still be able to get the right permanent people in right seats once there's a real seat for them. But this way you don't have to do without the skills until you have a seat.

katzgrau 7y ago
> it would be great to get some of the de-risking that comes with a portfolio approach. Right, but at some point "de-risking" seems like it can easily become "we're installing our own leadership team/ops staffers to make sure this company moves in the right direction." I think it'll wind up divorcing the company from the vision/passion of the founder — and that might be a fatal and overlooked risk in itself.

barry-cotter 7y ago

https://en.wikipedia.org/wiki/Good_to_Great https://en.wikipedia.org/wiki/Good_to_Great > Steven D. Levitt noted that some of the companies selected as "great" have since gotten into serious trouble, such as Circuit City and Fannie Mae, while only Nucor had "dramatically outperformed the stock market" and "Abbott Labs and Wells Fargo have done okay". He further states that investing in the portfolio of the 11 companies covered by the book, in the year of 2001, would actually result in underperforming the S&P 500.[6] Levitt concludes that books like this are "mostly backward-looking" and can't offer a guide for the future.

octodog 7y ago
That's not a very helpful criticism. If the companies go on to fail or make mistakes it doesn't mean that their previous good work or strategy is invalid.
- cjblomqvist 7y ago
  But it does prove that it's armchair research, which is of little value in providing facts about which strategy you should go about. It does provide some food for thought, but probably in a prescriptive manner which can be dangerous if taken seriously.