I came across a link to a segment of a talk given by Steve Blank this weekend on VentureBeat titled “Start-ups have no room for VPs.” In it was this short video segment where Steve explains why startups shouldn’t look like “junior versions of large companies.”
Steve is compelling when explaining why the model used by larger organizations simply doesn’t work with startups. VPs aren’t VPs, they are on the “customer development team.” The job is not scaling an organization in a startup. The job is validating the market need, refining the product, and ultimately establishing a repeatable sales process that has been proven to be successful.
I have been thinking about this a lot this weekend and find myself conflicted.
In startups I have heard variations of this in many ways and agree with the principals that Steve is expressing. Ultimately startups need contributors, not managers and it is essential that the entire team is focused first and foremost on validating the customer need and meeting that need with a successful product. When a company is pre-revenue, you are better off getting people who can execute and refine a vision rather than a group of managers looking to build a team.
While I agree with Steve in general, there are times when I believe that bringing in clearly experienced executives is advantageous to young companies. Just because you are a VP, doesn’t mean that you can’t roll your sleeves up while the company is young, yet still provide significant benefit to the company from your experience. An experienced team is actually one of the top items that VCs look for in the companies they invest in. How often have you heard “we invest in people first,” or something along the lines of “a good team can make a mediocre idea succeed, while a bad team can’t succeed with the best idea in the world?”
When you talk bringing in seasoned startup veterans, titles will come with it. Titles are used as a baseline for compensation, especially with regards to equity, and often are important in external interactions with key customers. Try recruiting a capable CEO or executive team member and tell them that they won’t have a title but will be a member of the customer development team.
For me the important thing to take out of what Steve is saying is that startups need to keep in mind is that VPs are not always necessary early, especially not pre-revenue and that all early executive team members need to understand that they are contributors first and managers second. Experienced leaders should be brought on slowly and with significant thought put into what immediate need they fill that is not currently being met.
Much of this philosophy is behind why I started MindLink Marketing. I love working with young companies who are looking to execute on key marketing processes that allow them to connect to their customers (hence the name MindLink) and establish a strong foundation for market success. I try to provide the equivalent of an experienced outsourced strategic marketing department to execute on all early marketing deliverables without the need to hire a VP of Marketing.
Ultimately the goal is that the company will be ready for a full time marketing leader who will take advantage of their proven market need and a well designed offering to meet that need.
What do you think?
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MindLink Marketing provides community marketing and content marketing services to help you connect to your ideal customers” 
True, small companies shouldn’t be mgmt top heavy, but a few experienced execs who can help find investors and roll up their sleeves as needed can make a big difference. Feels to me a lot like conversations around development process (Agile vs XP vs …). It’s not so much whether to adopt a process as it is how much process makes sense right now for the business. Ditto for executive leadership roles. If you’re still meeting in the founders’ living rooms, you probably don’t need VPs. If you’re starting to gen some revenue and it’s time to step on the gas, you probably do.
I think experience means more than titles. A VP with a big resume working for a lot of large companies and no start-up experience is a red flag, of course there are exceptions. I could see someone like that more with a board seat and could come on board once you hit a certain size. A start-up team is a different breed, driven more by adrenalin, risk and the passion to build something from nothing, folks used to doing a lot with little. That being said a start-up team may or not be the right team once a company hits a certain size as it requires a different skill set that a more seasoned executive can better manage. I may be speaking for myself here, but I believe the goal of a founder is to hire himself out of a job, replacing himself with people smarter than themselves in key areas in order to build the company.
Thanks for the comments. Ken, when I said titles come with seasoned veterans I did not mean those with big company experience. If you are trying to get someone on board with your company who has been a VP or C-level executive who has been successful at other startups, most likely you will need to bring them on at an executive level. In addition, if you can find the right person who is passionate about your company and is willing to be a contributor while your company grows, you shouldn’t be afraid of giving them a VP title if it is appropriate.
Hiring yourself out of a job as the company grows is absolutely the right way to go and the needs will become evident.
Good points. Getting the right folks on board early is critical, as I have learned one bad early hire can destroy a company. Seasoned and experienced folks who have build start-ups are important to the success of the business, in some areas you don’t have time to learn from mistakes, so I see where you are coming from.
No they don’t need VPs. They need cash and people doing the work to get the product to market ASAP. This means mostly technical people, founder/president and perhaps a good marketing person who can help focus product requirements and work with prospective customers to refine and prioritize features and prepare for the product launch. Bringing in VPs too early means they will be spending their time trying to build their fiefdoms and may get in the way of productive development efforts. They could also land you in a situation where they hire too many people before they are needed and make labor burn rates are far too high.
I don’t think I’d get a VP of anything until version 1.0 of the product was entering Beta and getting close to ship. Even then I’d be careful. Maybe you can make an exception for hiring a VP of engineering early to lead a larger development/engineering team. Even then, I’d be very careful and would ensure they have a very specific purpose in the organization that needs to be filled.
I also agree with Ken that one bad hire can wreck a company. Bad hires happen. They should be dealt with quickly and decisively before they cause too much damage. I’d rather have nobody in a job than someone causing problems for the team.
Great blog, Scott! Thanks for the interesting articles.
Thanks for the comment Craig. Overall I think this is the right approach. Pre-revenue, seeking out VPs just doesn’t make much sense. You need your whole team engaged in customer discovery mode and that is best accomplished with your early entrepreneurial team. I came across this other good blog by Sean Ellis that relates to this topic “Founders Make the Best Startup Leaders“.
Great thought provoking topic, Scott. It seems each startup I’ve worked with in the past has had a different view about this. The successful ones put people into senior positions who had prior startup experience, and they had clear expectations and directives for them. They may have joined with a VP title, but everyone could tell they were not afraid to roll up their sleeves or wear multiple hats – in fact they seemed to thrive on it.
On the other hand, I’ve seen executives join a small team who are not as used to rolling up their sleeves or did not realize the level of cross-departmental collaboration that is so critical for startups to succeed. Those were…ugly experiences.
Still others, with the understandable desire to bring leaders into a growing team, have brought very experienced and excited individuals on board without first planning out exactly how they’ll be contributing. Even if such individuals have applicable and valuable startup experience, bringing them on “just for the sake of having them” is probably the kind of luxury a startup should not pursue.