How to pick a CEO

Few days ago, I came across a LinkedIn post about the difficulty to hire a CTO.

Among the CEO complaints:

  • Asks for too much money/equity
  • Does not deliver/work
  • Does not have entrepreneurship mindset
  • Does not look for stability

When we join an early-stage startup, we have to:

  • Deliver at a constant speed, and not as fast as possible
  • Work on what matter, not what we have planned to do, or what we have signed for
  • Give visibility on what we are doing, not work on our own and notify everyone else when we are ready
  • Handle tasks not mentioned in the job description (e.g. hiring, law compliance, feedback gathering, stakeholder management), not just push code

That being said, what are some key elements to look for when deciding to join a startup?

We should first focus on the CEO:

  • What is their work history? I'll be suspicious if they have none, or if they have an long history of failed startup
  • What do they bring to the table? Having an idea, eventually a plan, is not enough
  • Have they professional competences we lack? E.g. marketing, sales, design, networking
  • What would be their role(s)?
  • What's their collaboration style? I have said collaboration, not management, if they want to manage we, we become a simple employee
  • What are there goal for for the project/company?
    • Do they have a (business) plan?
    • How do they plan to raise money?
    • How do they plan to collect feedback?
  • Gather information about their previous jobs:
    • Have they fired the whole team?
    • How are they speaking about their former employees?

Then, we should make sure about their expectations about us:

  • Do they want us to only produce code? Which would imply to limit our scope (every CEO want a fullstack developer, until they challenge business requirements)
  • Should we build a team?
  • Should we manage an existing team?
  • How autonomous they plan us to be? Would we be totally in control of technical decisions? Spoiler alert, if they look for a specific technology stack, or for a technology stack migration, we will not
  • Will their behavior get along with ours (e.g. I tend to be silent when working deeply, which can lead to anxiety)

Note: be sure that it is only intents, it will evolve but at least we will be able to refer to it.

That being said, at this point, we should be able to "guess", what they need, all their blind spots, and all we will have to do, and/or convince them to do.

This is where our experience is useful, we have seen what it takes to make a product, what to do, and what to avoid.

We should be sure to be able to, either be proficient at doing what they expect, but also being able to do, or learn to do, what needs to be done.

Then comes the project/idea.

It could be surprising to put it late, but even with the best plan, we will have to adapt to feedback, and pivot, working on totally different projects.

  • Is it a green/brown field project?
  • Is there a team working on it? Meet them to get to know our potential future coworkers, understand their challenges
  • If the whole team have been fired, quit
  • Seriously, it is a big clue of a management issue, if we have doubts, interview them
  • What are the milestones and deadlines?
  • If any, what is the funding status?

The final point is the contract.

Under no circumstances, work without a contract, even if the CEO might not respect it at all, at least it will balance a bit the power plays.

Make sure every "promises" is written as objectively as possible, limit the things we cannot control.

Examples of bad clauses:

  • 5% of equity if delivered on time
  • 5% of equity if delivered on June 10th
  • 5% of equity if 100 daily active users on June 10th

Example of good clauses:

  • 5% of equity, 6 months after the MVP including some specific features

If the CEO brings not skill, or money, quit.

If they bring only the skills, ask for 50% of the company, they may argue we will be paid by our unemployment benefit, but they will be too.

If they bring both, we may end up with a low salary, we have to choose our status, being a regular employee, asking for a descent salary, or being a founder, matching their salary and shares.

Note: if there are many co-founders, pick the one with the highest salary and the biggest percent of shares.

Remind that, if we take the shares, we may or may not win a lot of money, it is a bet depending less of the initial project, and more of the ability to collect feedback, and adapt to it.

Beware that, during negotiation, our potential future CEO might argue about the experience we will gain, our ability to be autonomous, to have impact, to shape the company as we want.

It is true, but keep in mind that all we want is to create a healthy, fair, and balanced work relationship.

We cannot rely on promises, plan, or good intent, which tend to fade away as "unexpected events" happen, we also have no guarantee the CEO will respect the contract.

All we will have is the time we will spend on it.