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Generally speaking if you are capable of leading a startup as a CTO, you should just found your own, with the legal CEO designation, so that you can control wha

Generally speaking if you are capable of leading a startup as a CTO, you should just found your own, with the legal CEO designation, so that you can control what happens to the equity. CTOs in general are very naive about how all of this works once PMF/traction is hit, and how little power they have over the platform they built

nextworddev 1y ago
One perhaps (cynical) view is that CEOs with business background are basically just arbitraging between investors and product teams.
- raincole 1y ago
  I'm not sure if it's a cynical view. Isn't it what business guys do in most people's minds? To bring together investment, marketing and product because they don't just magically blend. I knew someone who chose to major business despite he got an offer for top biology degree in my country, for this exact reason. By the way, when he told me this decision we were both only 17. (I really should ask whether he still thinks that's what business is all about today though.)
- mikert89 1y ago
  Alot of CEOs dont start out thinking this way, but it definitely occurs to them as they run the business that its the case. Once the platform is built with sticky customers, the CTO is replaceable with a generic high performing engineering manager. Not always, but for run of the mill b2b saas, they are
- justapassenger 1y ago
  CTOs just arbitrate between dev teams and product teams.
  - mooreds 1y ago
    CPAs just arbitrage between cash flows and legal requirements.
  - mikert89 1y ago
    Nah, CTO is usually deep in the code base, hiring, firing, coding, pulling long hours to ship features, etc
    - cactusplant7374 1y ago
      CTO's shouldn't be coding. They are a manager.
- simonswords82 1y ago
  Yes! That’s exactly what we’re doing. It’s not as easy as it sounds.
  - nextworddev 1y ago
    Definitely hard emotionally if the ceo job entails a lot of “managing up”
- Aurornis 1y ago
  In the same way that engineers are just arbitraging between the company and the computers, I suppose. Every job sounds much easier from the outside.
  - nextworddev 1y ago
    Yeah. Everyone’s just arbitraging. Not sure why the problem is
mooreds 1y ago
Disagree. I helped found a startup[0] and have been around a number of them, in slacks and on email lists[1]. I think that domain knowledge is so so important for startup success. Even more important than technical expertise. Why? Because the main problems for 0->1 startups are business problems, not technical ones: * where do possible customers hang out * what problems will they pay you to solve So in that case, a good CEO who knows the domain is critical. They'll have good answers to these questions, which will help guide the technical decisions. Or they'll know who to talk to in order to find the answers. There's no shortcut to that knowledge; you have to spend years to get experience in the domain. Learning and reading about the domain can help, but you still have to spend the time. The main exception, and it's a big one, is if you are building something in the devtools space, where you can be your own customer. 0: https://www.thefoodcorridor.com/ https://www.thefoodcorridor.com/ (I left after a few years, but they are still going strong!) 1: https://ctolunches.com/ https://ctolunches.com/ (free email list for engineering leaders, so many good discussions happen there)
- mikert89 1y ago
  Right, sure, there is an initial pain of building domain knowledge. But that one year of knowledge building, distribution, early customers, then dominates who has control over the cap table for a decade. Why not just do this work yourself? Its some weird myth that someone capable of being a technical leader cannot also flesh out the distribution Especially with the existence of AI, it really makes no sense and is some weird hierarchical system built by business people
  - abrichr 1y ago
    > But that one year of knowledge building, distribution, early customers, then dominates who has control over the cap table for a decade. Can you recommend any resources for learning how to do this work yourself?
    - mikert89 1y ago
      One shortcut would be to: 1. pick a vertical (construction, legal, accounting, etc) 2. look at how to apply ai (compliance, voice customer service, email) 3. find sales people from a would be competitor or old school b2b saas in that area, and pay them 150$ an hour to tell you what customers are paying for 4. at the direction of how to do sales, come up with the product and either do the sales yourself without building, or pay someone to do cold calls and pitch the product 5. build the product
nharada 1y ago
This may be your option for maximum control and leverage, but do remember that your day to day will be different, especially as the company grows. As someone who enjoys technical/product work and doesn't particularly enjoy fundraising, sales, or marketing, being the CEO is actually quite a trade-off for my personal fulfillment.
- mikert89 1y ago
  Sure, but you should just be aware that "wanting to do engineering" probably is stopping you from financial freedom/a more interesting life. Just be aware of the tradeoff
  - nharada 1y ago
    I find this a cynical and possibly incorrect take. I'll admit, if your goal is to become a billionaire and command vast sums of cash from your many vacation homes I'd agree with you, but financial freedom and an interesting life is absolutely within reach without having to take a career path that doesn't bring you fulfillment. Those CTOs that get pushed out once the company reaches their series C almost certainly achieve financial freedom.
    - mikert89 1y ago
      I'm not really talking about unicorns, I am talking about some typical b2b saas that makes 500k-5M in ARR.
      - Aurornis 1y ago
        > some typical b2b saas that makes 500k-5M in ARR. The typical B2B SaaS startup never gets that far. You're looking at a survivorship bias subset. If someone had an automatic path to get to that promised land then it would be an easy choice, but it's never that easy. A 500K ARR SaaS is also hardly a path to financial freedom. That's too small to hire a competent engineer while also paying yourself a high salary, so you're basically on call all of the time. You're also doing sales, customer support, and possibly fretting a sudden 100K drop in your ARR if your biggest customer cancels their contract because the economy changes.
herval 1y ago
Completely different skillsets. Lots of deeply technical startup CEOs kill their startups by not acknowledging that.
- mikert89 1y ago
  I really think society has built some weird narrative that if you did a technical undergrad, you arent fit to run a small startup. Ycombinator busts this myth constantly, and actually prefer technical founders.
  - justapassenger 1y ago
    Cynical view is that technical founders who don’t know who business work are easier to manipulate into bad decisions for their business, as long as VC makes money.
    - herval 1y ago
      I think it’s more of a realism vs optimism take - deeply technical people focus on what can go wrong, because they know better. Which is a good thing for a technical person - the best CTOs are great because they prevent implosions, not because they’re naive and optimistic
  - herval 1y ago
    It’s not a “narrative” - technical-minded people tend to be more realistic/pessimistic, which has severe implications on company growth. It matches my personal experience (the most technical CEOs I work with consistently underperform) and the industry averages (the majority of the companies that make it big have CEOs who aren’t deeply technical). That includes YC to- from Coinbase to Dropbox, the CEOs are hardly strong technical people (some have CS backgrounds, but they don’t really have a career as accomplished technical individuals and aren’t exactly know for their incredible CTO careers).
Kholin 1y ago
I believe it depends on the industry your business is in. In many businesses, technology is only a small component, and other factors such as connections, sales, and marketing can be more important than the technology itself.
Aurornis 1y ago
There are a lot of defunct startups in my city that were started by engineers and CTOs. Some of them had good ideas and a few even had great execution of the product. They all failed at sales, scaling, retention, and generally running the business. I did work for one very successful company that was founded by an engineer. However, he was focused almost exclusively on non-engineering business functions from the start. If you want to be a CTO and do engineering things, don’t assume founding your own company is the best way to get there.
- epicureanideal 1y ago
  > They all failed at sales, scaling, retention, and generally running the business. This also applies to most non-technical, “business folks”-led businesses as well.
sjtgraham 1y ago
This is of the classical genre of HN cynicism framed as advice that if you were to follow you're pretty much guaranteed to never go anywhere in life.
- mikert89 1y ago
  nah I have been in the venture scene in nyc for a while, have seen the same song and dance play out over and over
palata 1y ago
IMHO it doesn't matter whether you are CEO, CTO, CFO, C-whatever-you-feel-like-O, as long as you are a founder. A startup is a kind of ponzi scheme benefitting the founders (and VCs). Successful founders will happily tell everyone and their dog how being a founder was so much work, how they didn't go on holiday for a few years, how they worked long hours, etc. And mostly why they deserve to be rich now while none of their employees is. None of them will talk about how being one of the first employees was also so much work, usually with a pretty bad salary and order of magnitudes fewer options than the founder. I always wonder how the founders can genuinely believe that they are actually worth thousands of me. I am pretty damn sure that with a thousand me, we produce more than the founders alone.
- mikert89 1y ago
  Maybe, but there are levels to the game. The CEO has legal rights to fire cofounders, often with the board on their side. Early stage this doesnt get exercised often. But when the CTO has ten million of equity to vest over two more years, questions get asked behind closed doors about whether they are worth that amount. Thats when the "professional CTO" is brought in. Its extremely common, and letting him vest that amount is coming out of the pocket of the CEO and the investors
  - palata 1y ago
    > The CEO has legal rights I don't think that anything in the law says that if your title is "CEO", then you can fire cofounders. I'm guessing it depends on the contract the cofounders sign in the beginning. > often with the board on their side I have seen the CTO convince the board to fire his cofounder who was more the CEO? Well I don't know if the titles were written in the contracts, they changed over the years. But the guy who got his cofounder fired went from calling himself CTO to calling himself co-CEO to getting his "buddy" fired.
- roadbuster 1y ago
  > I am pretty damn sure that with a thousand me, we produce more than the founders alone Engineers generally never acknowledge the value of knowing _what_ to build, only whether something is built. As an engineer, I don't pretend to know or understand what the market wants or what people are willing to pay for. That's a problem I leave to business/product-oriented people. In exchange, they leave the building to me.
mbesto 1y ago
I would take a market-domain expert as CEO over a CTO any day of the week. Unless of course your product is to sell to other software providers.
golemiprague 1y ago
[dead]
gansbrest 1y ago
author of the post: I kind of enjoy working with partners, especially when everyone "knows their lanes" and agreements are properly defined. It just tends to blow up at some point it seems like... :) The main goal is to keep a pulse on finances. In any case, "start my own" is still on my todo, it's just... not that easy to pull of :))

nextworddev 1y ago

One perhaps (cynical) view is that CEOs with business background are basically just arbitraging between investors and product teams.

raincole 1y ago
I'm not sure if it's a cynical view. Isn't it what business guys do in most people's minds? To bring together investment, marketing and product because they don't just magically blend. I knew someone who chose to major business despite he got an offer for top biology degree in my country, for this exact reason. By the way, when he told me this decision we were both only 17. (I really should ask whether he still thinks that's what business is all about today though.)
mikert89 1y ago
Alot of CEOs dont start out thinking this way, but it definitely occurs to them as they run the business that its the case. Once the platform is built with sticky customers, the CTO is replaceable with a generic high performing engineering manager. Not always, but for run of the mill b2b saas, they are
justapassenger 1y ago
CTOs just arbitrate between dev teams and product teams.
- mooreds 1y ago
  CPAs just arbitrage between cash flows and legal requirements.
- mikert89 1y ago
  Nah, CTO is usually deep in the code base, hiring, firing, coding, pulling long hours to ship features, etc
  - cactusplant7374 1y ago
    CTO's shouldn't be coding. They are a manager.
simonswords82 1y ago
Yes! That’s exactly what we’re doing. It’s not as easy as it sounds.
- nextworddev 1y ago
  Definitely hard emotionally if the ceo job entails a lot of “managing up”
Aurornis 1y ago
In the same way that engineers are just arbitraging between the company and the computers, I suppose. Every job sounds much easier from the outside.
- nextworddev 1y ago
  Yeah. Everyone’s just arbitraging. Not sure why the problem is

mooreds 1y ago

Disagree. I helped found a startup[0] and have been around a number of them, in slacks and on email lists[1]. I think that domain knowledge is so so important for startup success. Even more important than technical expertise. Why? Because the main problems for 0->1 startups are business problems, not technical ones: * where do possible customers hang out * what problems will they pay you to solve So in that case, a good CEO who knows the domain is critical. They'll have good answers to these questions, which will help guide the technical decisions. Or they'll know who to talk to in order to find the answers. There's no shortcut to that knowledge; you have to spend years to get experience in the domain. Learning and reading about the domain can help, but you still have to spend the time. The main exception, and it's a big one, is if you are building something in the devtools space, where you can be your own customer. 0: https://www.thefoodcorridor.com/ https://www.thefoodcorridor.com/ (I left after a few years, but they are still going strong!) 1: https://ctolunches.com/ https://ctolunches.com/ (free email list for engineering leaders, so many good discussions happen there)

mikert89 1y ago
Right, sure, there is an initial pain of building domain knowledge. But that one year of knowledge building, distribution, early customers, then dominates who has control over the cap table for a decade. Why not just do this work yourself? Its some weird myth that someone capable of being a technical leader cannot also flesh out the distribution Especially with the existence of AI, it really makes no sense and is some weird hierarchical system built by business people
- abrichr 1y ago
  > But that one year of knowledge building, distribution, early customers, then dominates who has control over the cap table for a decade. Can you recommend any resources for learning how to do this work yourself?
  - mikert89 1y ago
    One shortcut would be to: 1. pick a vertical (construction, legal, accounting, etc) 2. look at how to apply ai (compliance, voice customer service, email) 3. find sales people from a would be competitor or old school b2b saas in that area, and pay them 150$ an hour to tell you what customers are paying for 4. at the direction of how to do sales, come up with the product and either do the sales yourself without building, or pay someone to do cold calls and pitch the product 5. build the product

nharada 1y ago

This may be your option for maximum control and leverage, but do remember that your day to day will be different, especially as the company grows. As someone who enjoys technical/product work and doesn't particularly enjoy fundraising, sales, or marketing, being the CEO is actually quite a trade-off for my personal fulfillment.

mikert89 1y ago
Sure, but you should just be aware that "wanting to do engineering" probably is stopping you from financial freedom/a more interesting life. Just be aware of the tradeoff
- nharada 1y ago
  I find this a cynical and possibly incorrect take. I'll admit, if your goal is to become a billionaire and command vast sums of cash from your many vacation homes I'd agree with you, but financial freedom and an interesting life is absolutely within reach without having to take a career path that doesn't bring you fulfillment. Those CTOs that get pushed out once the company reaches their series C almost certainly achieve financial freedom.
  - mikert89 1y ago
    I'm not really talking about unicorns, I am talking about some typical b2b saas that makes 500k-5M in ARR.
    - Aurornis 1y ago
      > some typical b2b saas that makes 500k-5M in ARR. The typical B2B SaaS startup never gets that far. You're looking at a survivorship bias subset. If someone had an automatic path to get to that promised land then it would be an easy choice, but it's never that easy. A 500K ARR SaaS is also hardly a path to financial freedom. That's too small to hire a competent engineer while also paying yourself a high salary, so you're basically on call all of the time. You're also doing sales, customer support, and possibly fretting a sudden 100K drop in your ARR if your biggest customer cancels their contract because the economy changes.

herval 1y ago

Completely different skillsets. Lots of deeply technical startup CEOs kill their startups by not acknowledging that.

mikert89 1y ago
I really think society has built some weird narrative that if you did a technical undergrad, you arent fit to run a small startup. Ycombinator busts this myth constantly, and actually prefer technical founders.
- justapassenger 1y ago
  Cynical view is that technical founders who don’t know who business work are easier to manipulate into bad decisions for their business, as long as VC makes money.
  - herval 1y ago
    I think it’s more of a realism vs optimism take - deeply technical people focus on what can go wrong, because they know better. Which is a good thing for a technical person - the best CTOs are great because they prevent implosions, not because they’re naive and optimistic
- herval 1y ago
  It’s not a “narrative” - technical-minded people tend to be more realistic/pessimistic, which has severe implications on company growth. It matches my personal experience (the most technical CEOs I work with consistently underperform) and the industry averages (the majority of the companies that make it big have CEOs who aren’t deeply technical). That includes YC to- from Coinbase to Dropbox, the CEOs are hardly strong technical people (some have CS backgrounds, but they don’t really have a career as accomplished technical individuals and aren’t exactly know for their incredible CTO careers).

Kholin 1y ago

I believe it depends on the industry your business is in. In many businesses, technology is only a small component, and other factors such as connections, sales, and marketing can be more important than the technology itself.

Aurornis 1y ago

There are a lot of defunct startups in my city that were started by engineers and CTOs. Some of them had good ideas and a few even had great execution of the product. They all failed at sales, scaling, retention, and generally running the business. I did work for one very successful company that was founded by an engineer. However, he was focused almost exclusively on non-engineering business functions from the start. If you want to be a CTO and do engineering things, don’t assume founding your own company is the best way to get there.

epicureanideal 1y ago
> They all failed at sales, scaling, retention, and generally running the business. This also applies to most non-technical, “business folks”-led businesses as well.

sjtgraham 1y ago

This is of the classical genre of HN cynicism framed as advice that if you were to follow you're pretty much guaranteed to never go anywhere in life.

mikert89 1y ago
nah I have been in the venture scene in nyc for a while, have seen the same song and dance play out over and over

palata 1y ago

IMHO it doesn't matter whether you are CEO, CTO, CFO, C-whatever-you-feel-like-O, as long as you are a founder. A startup is a kind of ponzi scheme benefitting the founders (and VCs). Successful founders will happily tell everyone and their dog how being a founder was so much work, how they didn't go on holiday for a few years, how they worked long hours, etc. And mostly why they deserve to be rich now while none of their employees is. None of them will talk about how being one of the first employees was also so much work, usually with a pretty bad salary and order of magnitudes fewer options than the founder. I always wonder how the founders can genuinely believe that they are actually worth thousands of me. I am pretty damn sure that with a thousand me, we produce more than the founders alone.

mikert89 1y ago
Maybe, but there are levels to the game. The CEO has legal rights to fire cofounders, often with the board on their side. Early stage this doesnt get exercised often. But when the CTO has ten million of equity to vest over two more years, questions get asked behind closed doors about whether they are worth that amount. Thats when the "professional CTO" is brought in. Its extremely common, and letting him vest that amount is coming out of the pocket of the CEO and the investors
- palata 1y ago
  > The CEO has legal rights I don't think that anything in the law says that if your title is "CEO", then you can fire cofounders. I'm guessing it depends on the contract the cofounders sign in the beginning. > often with the board on their side I have seen the CTO convince the board to fire his cofounder who was more the CEO? Well I don't know if the titles were written in the contracts, they changed over the years. But the guy who got his cofounder fired went from calling himself CTO to calling himself co-CEO to getting his "buddy" fired.
roadbuster 1y ago
> I am pretty damn sure that with a thousand me, we produce more than the founders alone Engineers generally never acknowledge the value of knowing _what_ to build, only whether something is built. As an engineer, I don't pretend to know or understand what the market wants or what people are willing to pay for. That's a problem I leave to business/product-oriented people. In exchange, they leave the building to me.

mbesto 1y ago

I would take a market-domain expert as CEO over a CTO any day of the week. Unless of course your product is to sell to other software providers.

golemiprague 1y ago

[dead]

gansbrest 1y ago

author of the post: I kind of enjoy working with partners, especially when everyone "knows their lanes" and agreements are properly defined. It just tends to blow up at some point it seems like... :) The main goal is to keep a pulse on finances. In any case, "start my own" is still on my todo, it's just... not that easy to pull of :))