Before I dive into this post, I want to apologize to those who may be sensitive to the non-PC nature of this. Anyway, as always, I have met and spoken with a number of startups during the past week. There are obviously all different types of companies with different funding needs but the ones that have stood out negatively for me are the startups that come in with a pre-baked senior management team and no product. In other words, I have major concerns when I see SVP of this and SVP of that and I wonder to myself who is going to do all the work if everyone is a Senior VP. When there are too many chiefs and not enough indians, I worry about how decisions get made and wonder if egos and titles are more important versus getting product out and customers on board. Sure, some of these teams were quite impressive but in a startup environment keeping your burn low until you get your product in the market and refined is imperative. In addition, more often than not, business models may change slightly or drastically and what you initially set out to build and deliver may not be the same in the future. What that means is that your SVP of Marketing may not the be right person 12 months from now. So do yourself one favor when starting a company-get the right people on board to get the product delivered and the first few customers and as you get feedback from the market and your team, figure out your next hiring needs. Don’t worry about titles and focus on building an insanely great product. Having too many chiefs and not enough indians can burn lots of dollars and also scare away potential investors.
Published by Ed Sim
6 comments on “Too many chiefs, not enough indians”
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I think you’re the one worrying too much about titles here. Just as in a big company, you shouldn’t assume that someone’s job title accurately reflects what he does all day.
Impressive-sounding titles cost nothing, but may help attract and retain talent. They can also help future job prospects of the startup’s employees if the company goes bust (which is always an important consideration).
As long as you’re not getting into a situation where a ten-person startup has a layer of middle management, I don’t see a problem if the guy who does most of the programming wants to be called “Senior Vice President of Development.” Or “Chief Yahoo” for that matter.
This is refreshing. So far i have heard every investor pontificate about Team being most important – and how they invest in “People”.
I never said that team is not important as it is. My point is don’t load up the team with all executives on day 1 before the product is out because your business model will most likely change and the people you start with today may not scale down the line. In addition, top heavy teams on day 1 usually equals a high burn rate. You are better off spending that money building product and getting some real customer feedback
Actually there are problems with giving huge titles on day 1. I call this title inflation and what ends up happening is that people who don’t have the necessary experience end up getting titles that are much higher than their capabilities and it makes it hard to bring in new executives with more experience senior to them down the line. The old guy does not want to give up his SVP title even though a new exec who is much more senior in experience will be their boss. This causes lots of complications and employees get caught up in the wrong things.
Ed:
If the boss can’t find some way to finesse himself out of the relatively trivial problem of title conflict, how’s he going to deal with real conflicts among the group?
There are certainly times when people get very sensitive about their job titles, but in my experience when it becomes a problem that means either the individual or the company is spending way too much time and energy on the internal pecking order.
Big and successful companies can have the luxury of internal power struggles. If it’s happening at a startup then someone (probably the CEO) isn’t doing his job.
One really has to question whether a company is a startup if they’ve got time for the pecking order.
Unfortunately, most VCs will invest in a “proven” management team without a product, rather than a product without a team.