
My Complicated Relationship with No Longer Being CEO - doppp
https://moz.com/rand/my-complicated-relationship-with-no-longer-being-ceo/
======
mainguy
Huh, while interesting and well written and all the other happy happy/joy joy
stuff everyone else posted...I can't help but wonder about folks who start out
in life as founders/CEOs/top 'o the food chain...how do (can) they relate to
folks who spend years working for others? This made me realize that many folks
might in fact be so isolated/insulated from the folks that work for them that
they are quite literally "out of touch" with the reality that vast majority
experiences... interesting read.

~~~
nugget
It's a different experience, for sure, but not necessarily an easier one.
Common perception is that founder CEO's call all the shots like some third
world dictator whose word is law and cannot even be questioned. Well,
appearances can be deceiving. I went from undergrad to CEO of a startup that
my best friend and I founded. I very much had a boss: our lead investor who
settled in as Chairman of the Board and unleashed his domineering personality
to run rampant on our weekly management calls. I had an extreme amount of
pressure from him to hit deadlines and hold ourselves accountable to our excel
projections (which, like most early startup projections, were pretty useless
to begin with). Over time, as success bought some freedom from the board and
investors, a few of our most important anchor clients filled their role
instead. I would spend months feeling like a certain VP or SVP at a make-or-
break client for us was basically calling the shots in large areas of my life.
In hindsight what we were lacking was real mentorship, management guidance,
and similar help, (unfortunately) none of which were included with capital
from our investors. We figured it out as we went along while taking flack from
all sides. Only later when we were acquired and I had a ''normal'' boss with a
''normal'' p&l, career oriented direct reports, etc, did I realize how
different it is, in some ways worse but in some ways much better. It was a
heck of a lot more predictable and less stressful. I didn't have to pull any
rabbits out of hats I just had to wander over to the rabbit cage and feed
them. But, without a doubt, experiencing the whole cycle made me a better
founder down the road.

~~~
jacquesm
That was - I'm trying hard here not to be harsh on you - because you let him.
If you're inexperienced I can easily see how this situation could come into
play but you as a majority shareholder, co-founder _and_ CEO have no boss,
certainly not your chairman-of-the-board investor.

That's a relationship that you will have to manage, that's for sure but if you
see him as your boss you imply that he has the right to throw you out or
sanction you and that isn't the case, as majority share holders you and your
co-founder should be in control of the company and the board should have an
advisory role. If the company goes public, hires an outsider CEO who is not a
part of the founding team or if the founder-CEO is not seeing eye-to-eye with
the other founders then the board can become more dominant.

~~~
asah
If you depend on that outside investor to support (take pro-rata, say upbeat
things etc) your next round, then you have little choice but to say "how high"
when such a board member says jump.

~~~
jacquesm
I really disagree with that. Board members (and other shareholders for that
matter) can hold you accountable for mis-steps but if they get in the way of
you doing your job then you owe it to yourself _and_ your company to manage
the relationship in such a way that they do not have the ability to impose on
you in such a way.

That's _also_ in the best interest of that investor. Structuring and managing
relationships is one of the things a CEO should be good at if the company is
to become successful. This goes for the relationships with the rest of the
company management, it goes for outsiders and it goes for the board.

If a CEO is hired by the board then that changes but if you found it you
should be in charge and you should make it clear - in a respectful way and if
necessary by educating your board members - why that is the case.

> If you depend on that outside investor to support (take pro-rata, say upbeat
> things etc) your next round

He or she will say upbeat things regardless (because they're already in it is
in their own interest), whether or not they will take pro-rata shares with a
next emission will depend on the price and their ability to purchase as much
as anything else so I would not count on it regardless and take it as a nice-
to-have but not a must.

If you behave like someone else is in control they _are_ in control. Don't do
that.

~~~
apalmer
Interesting comments... At the level of CEO and the Board there is no 'boss',
there are only checks and balances.

~~~
jacquesm
Indeed.

Even a hired CEO has a mandate and the board can fire him/her but they can't
unduly influence that person beyond supplying (possibly unsolicited) advice.
Otherwise no CEO would ever be able to do their job. Ultimately, whatever
happens is the responsibility of the CEO and the board is a source of advise
and makes sure the CEO does a good job. If the board is backed by the
shareholders they can fire the CEO, but if the shareholders (and in this case
that meant the original founders) don't agree by simple majority to get rid of
a CEO then he/she can continue to do their job. Whether you still want to is
another issue entirely.

Anybody in a CEO position would do well to make sure they understand their
rights, obligations and their relationships with the various other entities
they are dealing with. If you don't understand those then it is a recipe for
frustration and potentially disaster.

This is the reason why you'll see board members leak to the press (see for
instance Yahoo! recently). They can't win the argument in the boardroom and
they can't/won't fire the CEO (maybe because they only have a minority share
and the rest of the board and/or shareholders do not see their way).

This is also why founder disputes are extremely risky for a company. Founders
typically hold large blocks of shares and if some those suddenly align with of
non-founders then it can really break your stride or cause serious trouble.

Say a company has two founder that still hold 60% of the shares, 5% is in an
option pool and 35% is held by an outside investor. If the founders no longer
see eye-to-eye the board suddenly holds the tie breaking vote and this could
lead to the departure of either one of the founders depending on with who the
board sides. In such a case I hope your shares are vested if you're the
founder that is forced to leave (and if not I hope you have a vesting
acceleration clause in your contract).

~~~
nugget
Absolutely, in hindsight there would have been different ways we could have
managed the board more effectively from the start, and saved ourselves grief
(and likely created even more value). At 22 y/o we lacked the experience to do
this. (And don't worry, you couldn't possibly be harsher on us than we were on
ourselves once the dust settled and we reflected on the whole rodeo ride.)
Part of what I think incubators do well is they remove some of the crazy early
stage investor dynamics that used to plague very young early stage founders
who raised money from close personal networks of doctors and dentists. The
experience I wrote about is from a decade ago in the early 00s. Before Y
Combinator came along there was very little written about pre A angel
investing.

~~~
jacquesm
I should write about this. I never realized that it might be useful to
someone. Thank you for opening my eyes to this. I'm hip deep in contract work
right now (3 due diligences back-to-back, totally crazy, working over
Christmas on one of the reports) but I promise that as soon as I have my hands
free I'll try to expand on these comments in a blog post.

Y combinator is a real game changer in many ways, and one of those ways is
that founders now find themselves with a support group of others who have been
in similar situations and who have a lot of knowledge about subjects like
these. But there is a large group of founders currently not in YC and for
those especially it might be advantageous. As a small time investor I'm
sometimes in the role of the procedural jerk who makes sure that from the
founders perspective all the i's are dotted and the t's are crossed. Usually
this is not without friction but I've yet to hear a founder not express
(sometimes many years later) that they're happy we went that route. Experience
- even a little bit - can be worth gold if there is a power asymmetry and such
asymmetries are more the rule than the exception where founders meet capital.

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blazespin
Wow! That was incredible. Must read for anyone and everyone at any level. If
only we could get honest AND self aware posts like that from everyone.

Critical quote: "I think, to be frank, I was also deeply selfish. I wanted Moz
to be the kind of place I wanted to work, not the kind of place most likely to
succeed with the team we had or were hiring, not the kind that fit best with
what Sarah wanted, but my own little creation where things were weird and
different and Rand-like."

I really really appreciate this. I think if you want to become a CEO you have
to first (critically!) a) figure out what makes a successful culture and then
b) become a person who enjoys and thrives in that kind of culture.

Do you have be born that way for "b"? I don't think so, though it probably
helps.

~~~
poof131
_I think if you want to become a CEO you have to first (critically!) a) figure
out what makes a successful culture and then b) become a person who enjoys and
thrives in that kind of culture._

I don’t know if I see this as much value add. Finding out what makes a
successful culture doesn’t seem trivial, much less easily repeatable.
Different cultures can succeed in different circumstances and many different
types of cultures can succeed. I also believe cultures evolve more than they
are created. To me your argument sounds like saying “to succeed in starting a
business you need to figure out what it takes to make a successful business
and become a person who thrives doing that.” Working at Google is no more
likely to teach you how to start a business than to create a culture. Sure you
can learn things that worked there, but only some will work for you and some
will likely work against you. The best I’d say you can do is recognize culture
is important, try to learn what decisions leadership can make that affect
culture, and understand how those decisions impact the business both short and
long term. There’s no magic formula for business or for culture.

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jacquesm
That's a pretty incredible read. Anybody in a start-up either as a founder or
a current CEO should read this and take it to heart. That took real guts to
write, much more so than your average start-up post mortem or 'I messed up'
post.

~~~
FireBeyond
So if he's stepped down from and away from (almost) all his responsibilities
as CEO...

I'm left wondering - "Why do you still need your own Executive Admin"?

~~~
wtbob
There are a lot of folks who don't understand how important it is for a leader
to have a personal secretary, executive admin, executive assistant, deputy or
whatever you want to call the role.

The sad truth is that, as hard as he might work, a man can't add a single hour
to the day: every hour he spends dealing with one matter is an hour he _doesn
't_ spend attending to another. Leaders, despite being in many cases quite
remarkable, aren't so remarkable that they can perform 15 minutes of manual
labour in 15 seconds. That's where a good secretary can add so much value:
he's a leader's right hand man, his second self. He can cut through or deal
with the paperwork, the waits, the scheduling &c. and free the executive up to
_lead_. An EA is an enabler in the best sense of the word.

I've never had a secretary, but I've had the opportunity to work in that role.
It's exhilarating to see someone one respects able to do his job that much
better because of what one has been able to do.

Obviously, in an ideal world almost anyone would have a deputy. Sadly, that's
not numerically possible (and what about the assistants: surely they would
benefit from having their own?). But I think it's close to vital that anyone
whose value consists of meeting, connecting, travelling and so forth have a
lieutenant to help smooth the way.

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hotdog7
This message is so clearly directed at the internal audience of Moz to try and
frame his failures to rise as the CEO from a founder and garner internal
support. If I'm Sahah, I'm clearly annoyed at this and see it as part of the
reason he lost the job in the first place. All the drama he presents you don't
see coming from any other CEO or corner office in tech. The real 'honesty' is
clearly read between the lines that he doesn't want Sarah to be the CEO and
wishes he were still in the position despite his former and current failings.
Companies reach a tipping point at which time they need an operator instead of
a perpetrator of drama following bad results.

~~~
randycupertino
His whole blog reads as: Ineffective Hipster CEO Ousted, Has Sour Grapes

------
Signez
> _Spent hours doing work […] whose purpose I can’t understand (that has been
> entirely new)._

I don't think it is related to the employee condition, but more with sub-
optimal top-down communication.

I never worked without knowing the purpose of what I was doing, in my
professional life. And I think that I will quit my job if this happens — I
didn't choose to work in a startup to work blindly on tasks without context
and being able to participate.

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crabasa
This was a fascinating read, but I couldn't help but wonder:

Why was this posted on moz.com?

Who is the target audience for this story?

What's the tl;dr?

I empathized with Rand's struggle to square his selfish/quirky desires with
what was good for the company, but those questions above made me wonder: how
does this blog post help Moz?

~~~
drumdance
He's always posted stuff like this on Moz, from the very beginning.

~~~
apalmer
I think thats kind of the point though... Posting whatever you want on Moz
when your the founder and CEO is one thing. Posting such indepth material that
casts a not necessarily positive light when you have been removed from control
(perhaps by your own hand) is another...

I am imagining that these kind of heartfelt posts draw more attention to the
marketing firm with such impact that the current CEO thinks its worth dealing
with the negatives...

~~~
drumdance
Maybe, I don't know enough to say. But radical transparency has always been
part of their brand. Here's one he wrote a few years ago about their Series B.
It was so comprehensive that TechCrunch just linked to the post instead of
trying to dig up more info behind the scenes.

[https://moz.com/blog/mozs-18-million-venture-financing-
our-s...](https://moz.com/blog/mozs-18-million-venture-financing-our-story-
metrics-and-future)

------
simonswords82
I founded a software company about 10 years ago, and moved on from my CEO
position 6 months ago. A lot of what Rand says really resonated with me. I too
had started to make mistakes, mis-managing the company by making decisions
that were far too emotional and not strategic enough.

The high pressure, make quick decisions, life or death mindset that is
necessary for a startup is not compatible with a company that has matured. In
fact, in my experience CEOs/founders of companies that are growing
successfully will throw bombs in to the building. I'm sure many of you have
read about VCs removing founders from growing businesses. Founders simply
aren't compatible anymore.

I'll leave the psychology of why they do this to somebody else, but in my
personal experience I decided to move on from the CEO position because I found
myself having to do work, make decisions and partake in meetings that were no
longer a reflection of the business I wanted to create 10 years ago. In fact,
I can recall the exact moment when I realised it was my time to get out of the
way. I was sat in a disciplinary meeting with a member of staff who was under
performing. At the end of the meeting I said to the woman running the meeting
with me who is now the CEO "This isn't why I started a business, what am I
doing here?". A few long chats later and I had made the decision to handover
to her and the business is already performing better under her command.

Like people, businesses evolve and mature as they grow, and good founders need
to know when to get out of the way. Rand clearly feels he did unnecessary
damage to Moz; I wonder if he could go back in time if he would have given up
his CEO position a few years earlier?

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x0x0
This was interesting to read.

Apparently one of the things precipitating Rand leaving the ceo job was
mismanaging a major project with an initial budget of 6-9 months and targeted
release date of July '12 that slid to Oct '13 -- not only a slip of 15 months,
but a very buggy release even after major feature triage. Though Rand doesn't
say it, I'm guessing this was pretty hard on their engineering staff.

As an engineer who's worked on a similar death march with a major schedule
slip that turns out to have been totally unnecessary, it was nice to see some
accountability passed upwards for a change.

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apalmer
Interesting... ultimately although I don't think he clearly states it... being
CEO is not for most people... you can have the brains, the willpower and even
be successful in the role, all while feeling horrible about it...

I somewhat to a degree found the posting to be a bit in bad taste... a bit too
'honest' in his feelings that the company is being run 'wrong'...

~~~
goodcanadian
I didn't get that. If anything, he is admitting that the way he would prefer
to run the company is "wrong" or at least, sub-optimal.

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xyzzy4
Good read but it also seems like a humblebrag.

~~~
ecommerceguy
rand humblebrag? nooo waayyy

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samuelgrittner
What is moz? Mozilla? Please don't post stuff like this if nobody knows the
company.

~~~
teach
I don't think it's too much to expect readers to do a little googling about a
company they aren't familiar with.

This was an excellent article whether or not you know anything about moz.com,
and finding out is easily remedied.

