ADDING A REAL CEO: When is best?

"When do you think we should add a heavyweight to our startup? We are techies, building a prototype with angel money. A person with great credentials is available: from the right industry, decades of experience, has great connections. Is it too early? What do you think?"

I get that question often because it is so common and so important.

Here is my response to the founder CEO:

Dear B.,

When you think about adding people to your management team, start by thinking in two categories: (1) marquee and (2) workers. Famous people seldom work, they talk. Working people are seldom famous with marquee recognition but get a lot of things done.

Then think about what thing brings your company the most credibility: (1) people saying they support the company or (2) business results. Supporters include investors and advisers. Results include competitive market positioning and sales progress.

Then decide on what mix your company needs at the early stage it is in.

I have found it best to find working people who get results. Pay them what it takes to attract and retain them. Marquee names typically run out of Rolodex contacts very quickly and are expensive for what they deliver. Work and results trump fame and names.

BOTTOM LINE: Pick people for what world-class results they can bring to your company. Betting on a few contacts to save the day is a sign of desperation. Watching a team of great workers build a great company that customers race to is an inspiration (to investors, employees and bloggers). I put my money on workers and results. Think before you make your decision. It is a key to building your unfair competitive advantage.

 

Comments

[Jason]

Thanks for your great insights.

[Aye]

I've heard more than from one VC this fact and horror stories of accidently i.e. naively bringing in a "suit". Yeah they don't do anything was the general feedback and even worse they are hard to get rid of cause they tend to come at a high price... severance, stock acceleration in the event of termination early, vectors for lawsuits... they tend to know the game well. I wouldn't want to bring in these types of people they will just infect the startup with mediocrity and a pretentious air that is more likely to cause upheaval than value add.

hiring a ceo is hard I wish it were as easy as looking at a resume.