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Should the Computer Science Guy Be CEO?
compuguy84 asks: "I'm a Computer Science major. A Finance Major friend and I are starting a business based on an innovative idea I had. I came up with the concept and developed the overall model we would use. He loved it, and we've been working on our business plan ever since. We've both donated our respective expertise, covered major ground, and agreed from the start that everything will be split 50-50 (ownership, power, etc). Unfortunately, the time has come to incorporate, and potential investors have advised against assigning Co-CEO's. So who should be the CEO? Should the Finance Major get the job based solely on his Business knowledge, or should the Computer Science guy get the job because it was his idea? We've both have shown ourselves to be savvy business folks, but I don't have the 'schoolin'. All signs so far point to giving him the job, but I can't shake the feeling I'm getting robbed. If it was my idea, shouldn't I call the shots at the end of the day? Has anyone been through this? What did you do?"
Seriously, if this is anything big enough to where you have investors, let your friend be the CEO. Go ahead and take on the role of CTO or whatever 3-initial title you find appropriate.
You're going to have enough on your hands just making sure that your idea gets implemented correctly. Let someone else handle the issues of licensing, stocks, quarterly filings and investor reports. Do what you each do best. Don't let your friend muck with the servers, and don't you go stepping in the books.
That doesn't mean that you should give him free reign or that he is more valuable. Make sure that if you agreed to split 50/50 in the beginning, that you are still split 50/50 as far as profitability and ownership goes. Just make sure that you're clear that if there is a technical issue to be resolved, you are the final word. Also make sure that you understand that a Finance Major should have the final word on financial matters.
As far as splitting "ownership, power, etc" don't bother. Again, let each of you do what he/she does best. Let your friend have all the "power" on the corporate side of things, and you have all the "power" on the technical implementation side of things. Leverage your strengths and don't let jealousy get in the way of bringing something to life.
And remember - keep him away from the damn servers!
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If you allocate ownership equally he won't have more power than you do. Plus, you can use your tech skills to gather incriminating evidence you can use to blackmail him to your way of doing things.
Man, you really need that seminar!
I think you should become the CEO as they seem to be closer to the ideas and workings of the company (the "visionary"), whereas the Financial types hammer the books and tell you how much you can spend on your ideas (not as irreplacable as you are). There's no reason salaries and perks can't be similar. Finally, it often doesn't matter what the title is, as long as things are working out. But I still think it should be you.
-m
http://www.invisik.com
Tell the potential investors that this really is 50/50, and refuse to compromise on that. It would be a fatal mistake.
In business, you'll ALWAYS have well-meaning people suggesting you go directions you don't want to. Push back. Show some backbone. Don't let others dictate your future. This is YOUR company, ONLY YOU decide how it's going to go. (In this case "you" plural : the both of you.)
ESPECIALLY at this early stage, you need to get VERY used to saying "no" to others' suggestions.
P.S. I'm "president and programmer" of my 60-person company. Yes, a computer guy can make a good CEO.
The business strategy is not strictly finance or product, and the proper person for the CEO position is the one that best understands and represents the strategy - marketing, client relations, team leadership, growth areas. Just knowing who was trained for what is not going to answer this question. Who can inspire a team of coders on rewrite? Who can bring opposing views together and get the best out of everyone? You need to rethink the position in light of what the challenges to the business are, not what specialty the parties studied. That said, finance guys are not always the best choice for start-ups.
I have nothing to hide. So, why are you spying on me?
Don't waste your time thinking about whether or not you are being robbed by your business partner and more time thinking about whether or not you are being robbed by your investors.
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
If your friend has been working on the business plans and can serve as a "face" for the company, then he should be the CEO, if only for those reasons. He should probably also be the CFO, although most finance students out of college don't have any practical knowledge to speak of. Since you're clearly the nuts and bolts guy, you should be the Chief Operating Officer, or COO. When I interview clients to evaluate their companies, I ask the CEO or CFO about the financial questions and the COO about the operations.
:)
By the way, I will have to charge you now for my corporate planning advice. Just kidding (but not really)
Bill Clinton: Pimp we can believe in. - The Shirt!!!
If you have to ask then you do not need to be CEO find some else. I also have my own software company and I have some one else be the CEO I am the chairman of the board so I have the last say if I feel like it but rarely use it. Do what you do best let some else do the rest.
Linux modi 2.6.26-2-parisc
To start this off: no matter what, you're both "Founder".
The job of the CEO of a startup is public relations. Whoever is better at this job should be CEO. In either case, you're the CTO and he's the CFO. Whoever isn't the CEO can also be the COO if you both want two titles.
If he's got better people skills, then he's the CEO and CFO while you're the COO and CTO. If it's you, then you're the CEO and CTO while he's the COO and the CFO.
To say it another way, there's a school of thought that you need to have some coverage of the three human archetypes (Maven, Connector, Evangelist/Salesperson). Whoever is the strongest evangelist/salesperson gets the CEO title.
Regards,
Ross
My $.02
If brevity is the soul of wit, then how does one explain Twitter?
I know lots of CS people who are Ferengi, and I know lots of finance people who are numbers geeks. The person who has more business sense - capitalism, sales, greed, and also management skills - should be CEO.
DO NOT do anything 50-50 in your company. 50-50 is the road to misery. At the end of the day, one of you is going to have to be the one with the final authority, and the final accountability. Make somebody 51 and somebody 49. If you disagree, Mr. 51 makes the call, and gets the blame. In a 50-50 environment there is uncertainty about who makes the decision, and uncertainty about who is held responsible. This is not the way to run a business.
But if you need to turn to Ask Slashdot for advice, you shouldn't be the one that makes the tough decisions for your business. You readily admit he's the better guy for the job, so let him do his job and you do yours. You have an equal amount of shares, so ultimately you are equal no matter which of you is CEO.
Bogtha Bogtha Bogtha
So let him be CEO, and you take the title of President.
I've co-founded several companies - a couple of them are gone, a couple of them are still around, none household names, but all were fairly serious efforts (VC-backed, one had 30 employees, etc.) I've got a CS background and started as a software engineer, and I've usually been CTO of the companies I've co-founded. One way to handle it is to be both CTO and chairman of the board of directors. One of the jobs of the board is to oversee the CEO.
If it really were to come down to firing the CEO, or other major decisions like taking investment or expanding the stock option pool, you'd need the board to vote on this, and it sounds like you're set on a 50/50 stock split so you'd have equal say. But having the chariman title would at least be a signal to the outside world that you don't "work for" the CEO, which is really what the issue sounds like here.
I have actually seen one instance where a co-CEO arrangement worked, but I do think it's the exception. Whatever you decide, good luck, I hope the company is a success!
QNX has a really nice structure, they have two co-founders. One is the CEO and one is chairman of the Board and they switch every year, but they really run the company together. You can do that, and have you has CTO and your friend as CFO (titles you'd keep).. Titles like Chairman and CTO, and CEO/CFO are really cool.
Google's CEO, Eric Schmidt, has a PhD in CompSci from UC Berkeley; the two founders are both "presidents" of separate divisions. Then again, Google would probably be succesful with 10-yo CEO; their success relies on mature businesses along with continuous innovation, not marketing (have you ever seen a Google commercial?). But at my company (Eclipse Aviation, an aircraft design startup firm) the CEO serves a distinct purpose from the engineers. He has a business background but he absolutely believes in our company's goal. He probably doesn't remember his calculus, but he can sure as hell sell our product, to wealthy lawyers or government officials. He's the face of our company, somebody that other businessmen can feel comfortable with (Paul Allen among others). Our CEO is the face of our company, and the media loves it.
Are you a number crunching geek who puts people to sleep during presentations? Or can you captivate an audience with a mundane software project? Are you a Steve Jobs, or a Bill Gates? At its best, a CEO can lead a company through cut-throat business and coddle its consumers. At its worst, the CEO is little more than a figurehead who won a power struggle. Powerstruggling is an aspect of business of course, but a team player will always get further than the one tries to steal the other's thunder. Don't be an asshole and let the business dude run the business, unless you want to stop writing code.
Really, this all depends on the stage that the company is in. If (as it appears) that this is in the very early days and the task at hand is to take this great idea and bring it to market, then the "idea guy" (in this cash the techie) is probably the better choice. Once the flame is lit, the business grows and it's time to start focusing on day-to-day profitability, the stronger the case becomes for a "business guy" to take over, much like what's happened with Google. The two founders are still hugely important figures, but they brought in a true pro to run the operation.
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If it makes potential investors nervous, you've got to ask why... It should make you nervous to take 50/50, and then give the other guy the official label and final word, unless it's purely symbolic and you agree something to the effect of "CEO in name only," with no special benefits, and an agreement to that effect.
There are lots of businesses in the world. The business IDEA is something very important however, it is your whole basis for starting. Technology decisions need to be made well, or the business has an increased risk of failure -- without a good marketable product, even excellent financial decisions will not help, if you don't have an IDEA for a product.
Finances are important, because you need resources to develop technology based on an idea. Finance decisions need to be made well, or the business has an increased risk of failure. The IDEA may still be an asset, but without the resources to develop it well-managed and supporting the most important elements of proper research & development, marketing, and manufacturing, you have no product based on the idea.
There are other things that are very important for a business that develops a product, that are not finances OR technology, but are related to them both: Where and how you get supplies, how you get your great new technology made into a product, i.e. how you get it manufactured, how you price and sell your products, and how you protect the business, like any warning labels you need (Legal) and how the business chooses to represent itself and its product (Public Relations).
There are decisions to make that involve many things other than finance, and added finance background is no indication that one guy should be CEO over another guy: it will depend almost entirely on things that have not been mentioned in the article.
The best CEO may be neither of you, or both of you -- it depends on your other abilities, like Leadership skill, and experience in CEO roles.
If you are 50/50 in terms of power, then perhaps you should consider Co-CEOs despite investor nervousness, or find and hire a third person to be officially "labelled" CEO; give that person a 2% stake in decisionmaking, leaving each of you a 49% stake, and agree that the CEO has no special to a final word: final decisions are always ones that either all 3 of you support, that 2 support and 1 opposes, or that 2 of you support and the other is not available on an extended basis.
Giving that third person a 2% stake, assures there would normally not be a "tie": where neither side agrees, so no decision is made. I'm afraid if you place the other guy as CEO, even if you're supposed to be 50/50, you've given him de-facto, authority to break ties in his favor, and with only 50%, you can't later deprive him of that right once assigned -- of course it depends on the wording of your agreement the CEO's job description, and his ability to have either agreement/description ammended without you having to read and sign off on the change.
Lets make this straight, what needs to be done in the business at first.
/50% deal someone ALWAYS gets ripped off since people don't invest equal amounts of time to the business.
You need to develope the thing.
2nd you need to sell the thing.
3rd you need to do some paper work.
4th discuss with investors if you cannot do above well without pouring more money to it.
The 2nd part happens after most important risks related to business have already taken. And 3rd part isn't big deal until you have your start hiring people. 4th part is only important if you plan to hire or cannot sustain your living entire developement time.
So basicly if your thing isn't ready nor the business person do not add value to your business so you are already getting ripped off by giving him 50% of your business. And if its ready the business person should invest the money atleast equal to 5 times the salary you would of taken when developing the thing, in order to match your investment on the business.
I'd say read the Eric Sink:s articles beginning here. They teach part of the business part that geeks need to know. Basicly business part is easy if you need to know it. And computer guy is far better in the helm of software company than a business person. Since software person understands whats possible, and what not and proper technical trade offs.
Of course if he can do developement too and his domain expertice is needed for making the product then it wouldn't be obvious who should get bigger part. Oh and 50%
http://software.ericsink.com/bos/Geeks_Rule.html
Emacs is good operating system, but it has one flaw: Its text editor could be better.
Honestly, I think it's a question of both what you want to do and what you think would most likely make the company succeed. Take and guard your ownership stake. Then stick yourself where you think you'll be most valuable. If the company can't survive without you, that's the value that you have. Just make clear from the begining that you intend the company to be run by consensus, not CEO fiat. If you've got a partner who is doing work that you can't or don't want to do but which needs to get done, that's a good thing. A CEO isn't all powerful, and if you two agree on that, I think you can be very happy and effective as a CTO.
It's not wasting time, I'm educating myself.
I agree that there's enough for you to worry about without having to manage the company as the CEO. However, instead of letting your partner be the CEO, I have another suggestion:
Hire an experienced manager to be your CEO. You be the CIO, he can be the CFO, and together you can be co-chairs of the board of directors (in which case your newly acquired CEO reports to you).
Running a business successfully takes some knowledge, some experience, and some luck. I think you'd do yourself a favor by bringing in someone who has demonstrated all three. I'd have to think that investors would be pleased to see some experience at the helm.
Both Eric Sink (the founder of SourceGear) and Joel Spolsky seem to think so. (You'll have to search for the relevant articles yourself--I'm not going to dig through years worth of archives for you.)
Their thinking is:
On the other hand, the business guy is your friend and anyway, he's willing to talk to investors and answer the phone during the daytime (I'm assuming) so he's probably worth keeping around.
I think that what I'd do in your situation is give the business guy the job of CEO but retain a 51% ownership of the company. That lets him do the day-to-day business stuff and give the people he talks to a sense that they're talking to the guy in charge while at the same time letting you set him right if he tries to do something stupid.
Disclaimer: I have no actual experience in this. I'm just makin' stuff up.