6 ms·

The Quest for the ideal CEO-type Co-Founder

17 points by julien_c 13y ago

pefavre 13y ago
Interesting point. By the way, have you found your match yet?
- julien_c 13y ago
  Good question! I might have, time will tell.
michaelochurch 13y ago
The most important thing for a CEO to do is make sure that Bullshit never intrudes on the technical work. That usually means he or she not only needs to be a "10x" hustler, but also requires coming with the resources to get started on real work already in hand. That's something we struggle with, as technical people. We want to believe that "what makes a good CEO" is meritocratic, but it's largely about contacts. Can this guy get us to full salary on an idea alone, so we can build something? Same for college presidents; they aren't hired for the work they can do, but for the contacts they can bring in to the university. See, part of being a CEO is bridging the gap between the meritocracy we wish to create (because we won't be able to compete if people are already playing political games at <10 people) and the connections-based non-meritocracy of Bullshitland outside. Freedom (or meritocracy, in our case) turns out not to be free, and the CEO's job is to make it happen because most talented people come from the working and middle classes (this isn't a dig against higher classes; it's just that the lower classes are much larger) and have zero in the way of such resources. That requires an extremely rare combination: 1. Comes with the resources (i.e. funding, contacts) already in hand. 2. Not arrogant about it. The problem is that people who have such resources are usually such dicks about it that they become sources of Bullshit, rather than being able to protect others against it.
- yuhong 13y ago
  This reminds me of Eric Schmidt of Google. What do you think of him? Someone suggested after the anti-poaching fiasco that he should be fired: https://news.ycombinator.com/item?id=3523513 https://news.ycombinator.com/item?id=3523513
  - michaelochurch 13y ago
    I have more of a problem with the calibration score mess than the no-poach agreements. No-poach agreements are ultimately suicidal; if they work and keep wages down and work conditions poor, then you all get mediocre employees and non-participants get all the talent. Calibration scores ruin good peoples' careers. So I hate that shit a lot more.
    - yuhong 13y ago
      I was just providing it as one example.
- kamaal 13y ago
  I think it takes quite a bit of hard work to establish connections too.
  - michaelochurch 13y ago
    Connections have an inverse property. The more work is involved in getting them, the less value they actually have. Real Connections (capital-C) that can actually reshape your career are something you're born into. What you work for are connections that make inevitable things happen slightly faster. You get a job (not a great one; just an average one at market salary) 2 weeks quicker if you know a software engineer "on the inside". But make-or-break career-altering connections are something that aren't worked-for; people are either born into that or not.
- greghinch 13y ago
  > Can this guy get us to full salary on an idea alone I'd like to pick this point out, I think it's worth discussing. No one should get to "full salary" on an idea. Investment money (which presumably is all you'll get on an idea) is to build the business, not pay you a cushy salary, if you're a founder with significant equity. You get a nice salary from the business when it can be taken out of profit. Until then, you should be on "minimum to not be preoccupied with personal finances". That last point is why I would be cautious going into business with someone who has significant personal outstanding debt.
  - michaelochurch 13y ago
    No one should get to "full salary" on an idea. Investment money (which presumably is all you'll get on an idea) is to build the business, not pay you a cushy salary, if you're a founder with significant equity. Full salary == market compensation, not "cushy salary". Considering that you're working 5x as hard as a typical checked-out corporate worker, you're actually taking an 80% haircut already. I don't think a mid-career software engineer should take $750,000 per year out of his startup, because even though their work is arguably worth that-- of course, this is an expected value calculus because the realized value is zero or $10+ millions-- VCs wouldn't be able to make any money if founders demanded that. I do think that it's not unreasonable for a decent idea to merit full salary. Again, "full salary" to me means a market salary, not "cushy"; it's not the half-million or more that a decent software engineer is arguably worth. It's the $100-150k that he'd be able to get on the market right now. The difference would be that the entrepreneur is working 5-10x harder than anyone in a corporate job and only getting 1x what corporate denizens get. That's a hell of an improvement over 0x or 0.5x. If you can't already tell, I fucking hate the VCs who earn $500,000+ per year and take absolutely no professional risk but get sanctimonious about "skin in the game" when a software engineer (intending to work 60-80+ hours per week) asks for the 125-150k he'd command on the market. That boils my fucking blood.
    - greghinch 13y ago
      It has nothing to do with the amount of work you do, or your value as an employee in the market. If you're one of the founders, it's your business to make or break. Particularly early in the game, you're going to need to maximize your runway. So if you take typical first seed round, and then pay yourself $150k of that because "that's market rate", you're significantly impairing your business' potential for success. You should be able to go at least a year on your first seed funding, which for argument's sake let's peg at the $100k you get from YC. Presuming you have 2-3 founders, and a number of expenses, you can see that your own take is minimal. It's conceivable that in the first few years even, some employees may have higher salaries than the founders. But the founders should have enough equity that the payoff at the end is worth it. If you're not going to operate that way, don't try and run your business as a startup that takes funding. You'll be doing everyone involved a disservice, including yourself.
Killah911 13y ago
Please excuse my ignorance if I should know this already, but nowhere in the article does it explain what makes the author an authority on this particular topic. Perhaps a couple of previous experiences with different types of CEOs, some of which worked vs some of which didn't?
wololo_ 13y ago
The biggest mistake you can make is to find someone as passionate about your idea and making sure he stays on the top. Become CEO yourself, it's not hard and you don't need to know "business".
- julien_c 13y ago
  I'd argue that it's really hard for a single founder to creating a "scaling" startup. Evidence suggests the same (there are exceptions).
secos 13y ago
What about leadership ability? You describe a number of absolutely necessary talents, but without the ability to lead your team on the task of executing the vision, those talents don't matter for long.

17 points by julien_c 13y ago

pefavre 13y ago

Interesting point. By the way, have you found your match yet?

julien_c 13y ago
Good question! I might have, time will tell.

michaelochurch 13y ago

The most important thing for a CEO to do is make sure that Bullshit never intrudes on the technical work. That usually means he or she not only needs to be a "10x" hustler, but also requires coming with the resources to get started on real work already in hand. That's something we struggle with, as technical people. We want to believe that "what makes a good CEO" is meritocratic, but it's largely about contacts. Can this guy get us to full salary on an idea alone, so we can build something? Same for college presidents; they aren't hired for the work they can do, but for the contacts they can bring in to the university. See, part of being a CEO is bridging the gap between the meritocracy we wish to create (because we won't be able to compete if people are already playing political games at <10 people) and the connections-based non-meritocracy of Bullshitland outside. Freedom (or meritocracy, in our case) turns out not to be free, and the CEO's job is to make it happen because most talented people come from the working and middle classes (this isn't a dig against higher classes; it's just that the lower classes are much larger) and have zero in the way of such resources. That requires an extremely rare combination: 1. Comes with the resources (i.e. funding, contacts) already in hand. 2. Not arrogant about it. The problem is that people who have such resources are usually such dicks about it that they become sources of Bullshit, rather than being able to protect others against it.

yuhong 13y ago
This reminds me of Eric Schmidt of Google. What do you think of him? Someone suggested after the anti-poaching fiasco that he should be fired: https://news.ycombinator.com/item?id=3523513 https://news.ycombinator.com/item?id=3523513
- michaelochurch 13y ago
  I have more of a problem with the calibration score mess than the no-poach agreements. No-poach agreements are ultimately suicidal; if they work and keep wages down and work conditions poor, then you all get mediocre employees and non-participants get all the talent. Calibration scores ruin good peoples' careers. So I hate that shit a lot more.
  - yuhong 13y ago
    I was just providing it as one example.
kamaal 13y ago
I think it takes quite a bit of hard work to establish connections too.
- michaelochurch 13y ago
  Connections have an inverse property. The more work is involved in getting them, the less value they actually have. Real Connections (capital-C) that can actually reshape your career are something you're born into. What you work for are connections that make inevitable things happen slightly faster. You get a job (not a great one; just an average one at market salary) 2 weeks quicker if you know a software engineer "on the inside". But make-or-break career-altering connections are something that aren't worked-for; people are either born into that or not.
greghinch 13y ago
> Can this guy get us to full salary on an idea alone I'd like to pick this point out, I think it's worth discussing. No one should get to "full salary" on an idea. Investment money (which presumably is all you'll get on an idea) is to build the business, not pay you a cushy salary, if you're a founder with significant equity. You get a nice salary from the business when it can be taken out of profit. Until then, you should be on "minimum to not be preoccupied with personal finances". That last point is why I would be cautious going into business with someone who has significant personal outstanding debt.
- michaelochurch 13y ago
  No one should get to "full salary" on an idea. Investment money (which presumably is all you'll get on an idea) is to build the business, not pay you a cushy salary, if you're a founder with significant equity. Full salary == market compensation, not "cushy salary". Considering that you're working 5x as hard as a typical checked-out corporate worker, you're actually taking an 80% haircut already. I don't think a mid-career software engineer should take $750,000 per year out of his startup, because even though their work is arguably worth that-- of course, this is an expected value calculus because the realized value is zero or $10+ millions-- VCs wouldn't be able to make any money if founders demanded that. I do think that it's not unreasonable for a decent idea to merit full salary. Again, "full salary" to me means a market salary, not "cushy"; it's not the half-million or more that a decent software engineer is arguably worth. It's the $100-150k that he'd be able to get on the market right now. The difference would be that the entrepreneur is working 5-10x harder than anyone in a corporate job and only getting 1x what corporate denizens get. That's a hell of an improvement over 0x or 0.5x. If you can't already tell, I fucking hate the VCs who earn $500,000+ per year and take absolutely no professional risk but get sanctimonious about "skin in the game" when a software engineer (intending to work 60-80+ hours per week) asks for the 125-150k he'd command on the market. That boils my fucking blood.
  - greghinch 13y ago
    It has nothing to do with the amount of work you do, or your value as an employee in the market. If you're one of the founders, it's your business to make or break. Particularly early in the game, you're going to need to maximize your runway. So if you take typical first seed round, and then pay yourself $150k of that because "that's market rate", you're significantly impairing your business' potential for success. You should be able to go at least a year on your first seed funding, which for argument's sake let's peg at the $100k you get from YC. Presuming you have 2-3 founders, and a number of expenses, you can see that your own take is minimal. It's conceivable that in the first few years even, some employees may have higher salaries than the founders. But the founders should have enough equity that the payoff at the end is worth it. If you're not going to operate that way, don't try and run your business as a startup that takes funding. You'll be doing everyone involved a disservice, including yourself.

Killah911 13y ago

Please excuse my ignorance if I should know this already, but nowhere in the article does it explain what makes the author an authority on this particular topic. Perhaps a couple of previous experiences with different types of CEOs, some of which worked vs some of which didn't?

wololo_ 13y ago

The biggest mistake you can make is to find someone as passionate about your idea and making sure he stays on the top. Become CEO yourself, it's not hard and you don't need to know "business".

julien_c 13y ago
I'd argue that it's really hard for a single founder to creating a "scaling" startup. Evidence suggests the same (there are exceptions).

secos 13y ago

What about leadership ability? You describe a number of absolutely necessary talents, but without the ability to lead your team on the task of executing the vision, those talents don't matter for long.