Why having two CEOs should allow you to grow your startup two times faster
If you talk to most venture capitalists or authors of management books, I’d wager the majority of them would argue all day with you on one fundamental truth: thy should only have ONE chief executive in a startup.
However, many startups – including us – are finding the co-CEO model allows them to grow faster, manage scale easier, and dominate their industries. Whether it’s Oracle, Atlassian, or Wholefoods, many a few firms have led the charge with this interesting organisational chart.
At Appster, my co-founder Josiah and I decided early on that we both wanted to be CEO. Our thinking was that if you looked at what the CEO was supposed to do, it would look something like this:
- Set the vision
- Lead revenue growth/marketing
- Hire and recruit senior executives
- Build the strategy for growth
- Motivate the team and build the culture
We felt that these were all things we could both do well. However, being rather green-19 year-olds, we looked at other roles such as CFO or CTO and thought they were easy to rule out for ourselves because we simply didn’t have the experience or knowledge to do them well. They don’t teach you how to read a P&L at Belmont High!
There is No Way This Will Work…
When I talk about our co-CEO structure, I usually hear a few reasons why it won’t work in the real world. Maybe you’ve heard a few of these as well:
- With two CEOs, people in charge will somehow play daddy against mummy when it comes to getting what they want
- Two CEOs will inevitably lead to a misaligned vision because they won’t be able to agree or resolve issues in a professional manner
- External investors won’t fund a company that has two people in charge
- How will you divide up the work of leading a company between two people?
In reality, we found that sharing responsibility allowed us to grow faster, manage different offices around the world and have somebody to get a different perspective from. Every time somebody told us that it wouldn’t work, we just remained focused on growing and doing our own thing.
But here are a few things we learnt to make it work:
#1 What to do when you disagree (communicate and fight in private)
Startups are scary enough already, so the last thing that staff need is to see two co-CEOs arguing about decisions in the business.
Sure, it’s easy to let “transparency” and the energy of the moment allow passionate debates about strategy or execution to sound like full-fledged arguments. Even if you’re both super comfortable with conflict and see it as a critical part of solving problems, your staff often will not understand the context of what is going on.
That’s why Josiah and I always make the rule that if we disagree with something in a meeting, we “take it offline” and get aligned before we present it to other leaders in the organisation. It makes everyone’s lives a lot less stressful.
#2 Dividing workload
There’s no hard and fast rule about how to divide up a co-CEO responsibility. I often see some firms have one leader focus on the internal parts of the business, such as HR and operations, while the other focuses on external parts such as sales, branding, finding new opportunities, and being the face of the brand.
Personally, that approach didn’t really work for us as we recruited various leaders such as CTOs and VPs to take some functional areas under control. We decided instead to focus on new strategic initiatives, where we could improve the business regardless of function.
For instance, Josiah recently helped with expanding our Silicon Valley office, while I’ve spent a lot of time focused on launching a new product for Appster. Knowing how to divide the work up evenly will depend on the stage of your business.
Stage 1: Divide up day-to-day tactical work. One of you will do the programming; the other will do the sales calls.
Stage 2: Taking over functional and the staff in those. You’ll typically take a C-level title like Co-CEO and CTO or Co-CEO and CMO.
Stage 3: Dividing roles into internally or externally focused. At this stage, you’ll typically have a bunch of other managers and your focus needs to be on different strategic areas.
#3 Make sure you both share the same vision and commitment
Working with thousands of startup founders through our various products, services and events, one thing that becomes obvious is that not all co-founders work well together and similarly neither do two co-CEOs.
There are a lot of reasons why partnerships fail, but if both of you don’t share a strongly aligned vision of what the business will look like in five years and have the same level of commitment to make it happen, it will never work.
Commitment means that you’re both willing to make the same sacrifices, work the same long hours, give up the same comfortable incomes and deal with the tough stuff together. When Josiah and I started Appster, we both agreed to take a risk on a 12-month office lease we couldn’t afford; we both knew the financial risk of not being able to pay it.
We also both worked from 8am to around 3am every day and bunked in a tiny shared bedroom in student accommodation in Southbank. We were both giving Appster our 100 percent.
#4 Be like a scientist
One technique we found useful when sharing the co-CEO title was using experiments to solve arguments.
Let’s say Josiah thought of a new marketing strategy and wanted to try it, but I thought it was not the best idea – instead of arguing about why I thought it was stupid and not taking any action (decision by committee, government style!), one of us would agree to run an experiment to see if the idea actually worked on a small scale and we’d make our final decision based on the data.
You’d be amazed at how many disagreements are solved logically and fairly – and how often data proves you wrong!
So there you go, my experience has been that, provided you are highly aligned with your co-founder, a co-CEO partnership can work wonders for growth and scale provided you stay on the same page and equally committed to the company.
Has having two CEOs helped your business? Or has it been a bad idea? I’m keen to hear everyone’s thoughts in the comments below.
Featured Image: Mark McDonald and Josiah Humphrey | Photographer: Stephen Dorian Miner
Mark McDonald is the co-founder and co-CEO of Appster, a leading mobile app and product development company with offices in Melbourne and San Francisco.
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