Lemon #54. Why it’s hard to bring big company execs into little companies

Lemon #54. Why it's to bring big company execs into little companies

While reading ‘The hard thing about hard things’ from Ben Horowitz, we learned about why it’s hard to bring big company execs into little companies: 

So you achieved product market fit and you’re ready to start building the company. The board encourages you to bring in some «been there, done that» executives who will provide the right financial, sales, and marketing expertise to help you transition from a world-class product to a world-class business.  So you aim high and bring in a super-accomplished head of sales. This guy has run huge organizations with thousands of employees. He has stellar references and even looks the part. Your VC loves him, because he has an awesome résumé. 

Fast-forward six months and everyone in the company is wondering why the sales guy who has produced nothing got such a monster stock option package. 

The most important thing is to understand that the job of a big company executive is very different from the job of a small company. In contrast, when you’re a startup executive, nothing happens unless you make it happen. So, once you hire one of these big company executives, there are two dangerous mismatches that you’ll face: 

  • Rhythm mismatch. Your executive has been conditioned to wait for the emails to come in, wait for the phone to ring, and wait for the meetings to get scheduled. In your little company, he’ll be waiting a long time. 
  • Skill set mismatch. Running a large organization requires very different skills than creating and building an organization. When you run a large organization, you tend to become very good at tasks such as complex decision-making, prioritization, organizational design, process improvement, and organizational communication. When you’re building an organization, there’s no organization to design, there are no processes to improve. You’ve to be very adept at running a high-quality hiring process, have terrific domain expertise, know how to create processes from scratch, and be extremely creative about initiating new directions and tasks. 

Some useful tips: 

  • Make sure they «get it». Every executive must understand the product, the technology, the customers, and the market. Force your newbie to learn these things. Consider scheduling a daily meeting with your new executive. Require them to bring a comprehensive set of questions about everything they heard that day but didn’t completely understand. If they don’t have any questions, consider firing them. If in thirty days you don’t feel that they’re coming up to speed, definitely fire them. 

  • Force them to create. Give them monthly, weekly, and even daily objectives to make sure that they produce immediately. 

  • Put them in the mix. Make sure that they initiate contact and interaction with their peers and other key people in the organization. Once they’ve done that, require a report from them on what they learned from each person. 

Nothing will accelerate your company’s development like hiring someone who has experience building a very similar company at larger scale. 

Ben Horowitz @ The hard thing about hard things.

Jorge Moreno

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