Titles and hierarchy matter in a startup because someone has to be able to make decisions in the face of disagreement. Decision making by committee leads to a lot of really mediocre decisions--like keeping a co-founder as CTO despite being unqualified for the job!
This decision-by-committee dynamic happened early on in my current startup. Mostly, the problem was engineers having an equal say in marketing and financing decisions––a topic they were not focused on or very familiar with, yet had strong opinions about. This was dumb. It took one of the founders of Netflix giving me/us a swift kick in the ass to get over it. No longer. We now divide and conquer. The company is much better for it.
Every company needs a CEO. And if the CEO is not technical, then the company is eventually going to need a CTO as well. But that's about it in terms of C-level officers. A small company should not have 4 chiefs. What that really means is the company has NO chief.
Being a C-level person means being responsible for long term big picture shit and management and leadership, not just coding. For myself, I am extremely fortunate to have a visionary co-founder and CTO with real leadership qualities. He is a partner in the true sense of the word. I expect him to stay CTO for a long, long time––unless I decide to demote myself and make him the CEO. (Might happen, who knows?) Regardless, the buck has to stop somewhere. And that somewhere is the CEO. There can only be one.
A small company (1-10 people) usually doesn't need any other CxO titles besides CEO.
If any executive (CTO or whoever) is not getting things done, CEO's job is to replace them as fast as possible. If the CEO is failing to do that, this means he needs to be replaced.
Ben Horowitz has an excellent post explaining the CEO job: http://bhorowitz.com/2010/05/30/how-andreessen-horowitz-eval...
At the end of the day any company needs real leadership. The one described in the article lacks it.
But there's a bullshit aspect to it that bothers me - it seems to be ignoring something basic that's being communicated when people insist on CxO titles.
Specifically, people who insist on CxO titles at some stage in a startup where it seems a bit pretentious may have a very good reason. What these titles communicate internally and to the board is something like:
"I am joining this startup and doing a buttload of work under the assumption that I will be the effective leader (or, CTO = effective technology leader) of the the company, and if anyone wants to make me step down from this, it will actually be a demotion and it will be an issue".
This doesn't mean "I will have a tantrum and leave". It means, "don't assume that you can seamlessly bring in a layer of management above me and this will fit my expectations".
This position may be a bad idea, I'm not disputing that. However, it may be what's contingent on someone doing a pile of work for very little money - part of their vision of the startup might be not suddenly acquiring a layer of people to report to who have been parachuted in after the hard, nasty work has been done.
If you want to make it clear that at any moment, the guy who thinks he going to run the company or the technical aspects of the company can have someone parachuted in on top of them, then denying them the CxO title is a good way of communicating that. That's fine, but don't pull this sophomoric shit where you pretend that people in small companies are insisting on these titles out of sheer ego alone.
I have a talk with everyone who works for me in which I say "this is a startup, job titles are flexible, and everybody (including me) will have to revisit their role and title frequently. If you're OK with that, then great. If not, we should talk it through now so everybody's expectations are set."
Of course it is. In my experience those are the two hardest things for people (including me) to do.
I appreciate the author's advice, though I have a hard time imagining 3 or 4 cofounders doing fundraising when there isn't someone calling him or her self "CEO."
(I personally take no special pleasure in calling myself CEO. If it confers more ability to control my destiny, then great; anything beyond that is an ego game that no startup founder has time to play.)
Several of us have Cxx titles at our startup, but we sell in to really large organizations (sometimes municipal), so having "Chief Customer Happiness Officer" isn't really an option for us. Or at least we don't believe it is. In the end, it really doesn't matter, because we're all supremely confident and scared humble at the same time. None of us would hesitate to give up our titles to someone more qualified should that need or opportunity arrise.
Corporate titles sound silly in small businesses -- I had my driveway sealed by the "President and CEO" of a driveway sealing business the other day.
People in contact with customers should have flexibility or use multiple titles. If you're trying to get an audience with a Managing Director or a Deputy Commissioner in government, shitty titles won't cut it. An "Account Manager" won't get past a secretary, but "VP of North American Sales" might. In other contexts, the dramatic title is a liability.
There are definitely times when you need the title to make meetings happen, so it's not a sure-fire guarantee of arrogance. But it's still a warning sign.
At the last startup I founded, both myself and my co-founder agreed to skip titles until such time as they were required. When pressed, we were both just 'founders'.
Professionally, I am a farmer, a programmer, a designer, an administrator, and was even a baker for a short while; though, sadly, I gave it up as it was too time consuming on top of the rest. Not to mention all of the business stuff that goes along with doing those jobs, like management, sales, mechanic in the case of my farm, etc, etc.
Why are people so hung up on them? They are pretty meaningless.
I worked for a government agency for a long time. At one point of my career, bigshots at the director level would not acknowledge my presence in a room. Later, they were my best buddies, because I was high enough on the ladder to be a minor "player" to potentially influence one of their peers.
I don't even know what I do for a living, I just work on what needs to be done or feels right at any given time. My job is to solve problems and create value for others, just like everyone else. You can't be more specific than that.
If you are called about a former employee and can't answer the question "what was their title" with something more concrete than "meh, whatever", you will sound like a fraudulent reference. You're inadvertently screwing over your employees if you don't pick something reasonable and stick with it (modulo actual role changes or promotions due to growth).
If you answer the question "what was their title?" with "they mostly did X and Y, they were incredible", I doubt that's going to cost them the job (assuming they'd put something like X and Y on their resume). Or at least, I wouldn't want to work at any place where the Levenshtein distance between the title on my resume and the title quoted by my supervisor was a critical part of the hiring decision.
For example, Yahoo lets technical employees choose their own titles, with a default of "Technical Yahoo". My ex-coworkers who chose alternative titles don't seem to have been handicapped in their subsequent careers.
Well, "critical" might not apply... maybe it's just an early filter by HR. This filtering out of people who lie on their resume will have a few false positives, but even the best filters are going to have a non-negligible false positive rate -- it's enough that they mostly work, as long as you're swamped with mediocre and inappropriate applicants.
With thousands of resumes coming in daily for a position (I'm guessing), some semi-automated winnowing must happen, and any test you devise will have some potentially awesome candidate crying foul (though such an awesome candidate is probably not in your pool of applicants today, or tomorrow).
"Hi X, as we discussed I used you for a reference for a Quality Assurance Developer role from our time together at FooCorp. I mentioned our debugging of the priority inversion problem in our server, writing the kernel module, and working with you to integrate scripting. Thanks!"
My rule of thumb is that a business of less than 7 people should have 1 "Manager" (not CEO, President, etc), and everyone else should be an employee (plus additional reasonable titles such as co-founder, etc). As the business grows and more people are brought onboard you can start handing out titles.
This might not work in every situation, but it's a good starting point.
It's really funny.
I'd just create a Vice President of Technology position, and offer it to the co-founder ... if he doesn't go for it ... offer it to the new hire ... if he doesn't go for it ... I'd keep looking.
To each their own really, it'll operate differently in different contexts. In the context of the article I would say it would be fair that none of them have titles to begin with, including the new hire.
Forego them temporarily & operate in a bit more 'round table' style if feasible. If the titles are a burden and getting in front of the work to be done, it's not the work that is about to be thrown out the window :)
While we are still small, less then 10 folks, we're going to keep it that way since we all wear many different hats at this point. We'll get titles eventually - but we'll also get more structure as we grow so we'll wait until we need it.
I doubt I'd bother changing my title unless I needed to have a division of responsibility. And for that to occur I would need a number of staff which would get confused exactly whom they should be talking to.
I think for most companies I have dealt with CEOs start to appear over 20 staff members which may be the level where communication issues start, and division of responsibility need to be clarified.
I know a few people who use CEO title in companies with 1-3 people, most of the time its a projection thing, more of a sales tactic than anything. For a few its an ego thing, but usually they don't last long in community groups as everyone gets sick listening to narcissistic comments and they isolate themselves.
In addition to avoiding the friction, I had hired (and rejected) several "CEOs" for entry-level student tech-support jobs several years previous, and wanted to avoid the presumptions that went along with the title. I was young, and wanted to be taken seriously when I introduced myself. "CTO" of a company no one had heard of didn't communicate that.
It did win us some occasional business though.
Was sad to leave it.