Do people with technical backgrounds make the best startup CEOs? |

Do people with technical backgrounds make the best startup CEOs?

A Board member recently asked for my opinion on hiring a technical person as CEO for an orthopedic startup. 

After I thought about it, my advice was… “Don’t do it!  Don’t hire a technical CEO for your orthopedic startup.”

My own answer surprised me. As you know, I am an Engineer who has lead medtech startups. Today as a recruiter I talk with startup CEOs every week, so I have a lot of data points to base this answer on.

The best early CEOs are the ones who are very long-term thinkers. They realize that decisions that small decisions early on, matter. They realize that they are not building a house, they’re putting bricks in the foundation of the skyscraper, at least in their minds.

There are specific concerns with technical CEO leaders. Statistically, the majority of medtech founders/CEOs are removed or pushed aside as the startup moves from concept to extended funding rounds, to regulatory clearances, to robust quality and operations, and into early sales and finally through expanded commercialization.

Four issues I have seen first-hand.

1) Skillset

The fundamental issue with technical CEOs is that the skill set needed to create and bring technology to life are very different than the skillset to build a business. The skillset to turn the vision into reality is everything in the early days, but later, the goals shift to ensuring operations are running smoothly, deadlines are met, and the finances are healthy, etc.

2) Personality

The technical CEO often has a creative personality to run things like they see fit, regardless of the quality of their management decisions. This personality of freedom can be very helpful during the early creative phase, but not during the operational and expansion phase

3) Transparency

Many technical CEOs have an innate need for control. They can fall in love with the technology at any cost. They often refer to the company or product as “my baby”. It is very common for the CEO’s desire for control to supersede their motivation for profit and growing company valuation. Even worse is that some technical CEOs will hide real company problems from the stakeholders. One VC study found that 80% of tech startup CEOs had to be forced out of the company because of this control issue.

4) Delegation

Many technical CEOs do not know how to delegate. They believe that they “know” everything and deny they need help. Even those technical CEOs who realize that they need experts in other areas, may not have had the skills to chose the best leaders in other key areas – Finance, Quality, Regulatory, Operations, Marketing, and Sales.

With all this said, there are amazing exceptions out there, but keep in mind that technical CEOs with successful longevity are the exception.

My advice to Board members:    Hire a CEO that can get you to Year 5, not one who can get you through Year 1.

 

Thoughts?     tiger@TigerRecruiting.com

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