Attraction to fame is part of our culture. There are dozens of magazines, tv shows, and websites devoted too all things celebrity. This attraction to fame also extends to the business and tech world as well - bringing a household name to your company can instantly elevate the perceived status of your business. All that being said, I personally have a serious problem when anything related to fame creeps into personnel decisions for an early stage company. Too often, when doing a search for a CEO, I have heard the term "rock star" thrown about from many a venture capitalist and entrepreneur. I need a "rock star" CEO that can take us to the next level and bring instant credibility to my company. Trust me, I am all for bringing in a "rock star" executive to run a business but in my mind it all comes down to what one's definition of a "rock star" is. Is your "rock star" a big name and cover boy on a magazine, key note speaker at many a conference, and a person who happened to catch the Internet wave at the right time and translated that into tremendous financial success? Or is your "rock star" someone that is appropriate for your business, meets all of the job specs in your CEO target profile, possesses leadership skills and experience working at large and small companies helping launch new products into new markets successfully, and has the hunger and passion to work at your company.? If that candidate happens to meet both definitions of "rock star", then you are in great shape. However, if you are making a decision more because of the candidate's big name than you better think twice. I am not going to go into a full dialogue on the hiring process but I suggest seeing an earlier post where I discuss that coming up with the job specification or target profile is one of the most important things to do before emabarking on any search. Once again, the point I am making here is to not make a hiring decision just on the name of a person but to do it for all of the right reasons. A friend in LA once told me that one of the keys to success in his business was to not get starfu**ed. I suggest the same when it comes to hiring your next CEO or key executive. You are probably better off hiring the CEO who has lots to prove and who is going to be the next "rock star" than one who already is.
The myth of the Rock Star CEO
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Ed Sim is founder of BOLDstart Ventures and co-founder of Dawntreader Ventures. Mr. Sim has over 15 years of venture capital experience having led seed and first round investments in a number of high profile Internet and software companies.
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Martin Wawrusch: Hi Ed, you might want to take a look at http://lea...
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Larry Tutino: Hi Ed, I do the same thing with real estate deals...
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DzNtz: well, for starters these executives can start actu...
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Peter Kadas, MD.: I'm an entrepreneur for 16 years now. I had wins a...
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Chris: Accountability is definitely an ingredient to grea...
In very few areas have I seen clearer examples of small companies trying to please investors at the expense of the business than in C?O selection. Were I not running the company myself, I’d much rather have someone competent but relatively unknown.
I don’t want a CEO with a reputation big enough that he can waltz right into another job if the company he’s currently running fails. I want a CEO who wants (and needs) _this_ company to build him that reputation. I’ll give up a lot of “experience” in order to get that…experience is far from worthless, but it’s worth a lot less in a startup CEO than many investors seem to think it is.
One of the best examples I have ever seen of this was at a company called iMotors who hired Lloyd Ward, the former CEO of Maytag and member at Augusta National, as their CEO.
After iMotors blew through over $100 million and went belly up, Lloyd was quoted in the NY Times saying something to the effect that “iMotors was a pickup game and he was an NBA player.” If that was the case, then shouldn’t iMotors have been a huge success?
My experience is that Rock Star CEOs are most effective when they are also the company founder. Then, they have really have something on the line.
Interesting. I’ve had a few VCs admit to me they can’t help being starf**kers, even though they know it isn’t a necessarily recipe for success (and often it’s quite the reverse)! It’s interesting because they keep doing it, as if they can’t help themselves.
Clearly, CEOs need different skills at different phases of a company’s growth. For a start-up, my view is that the CEO better understand the core business inside out. That’s because, in many sectors, decisions made in first couple of years of a business can set the trajectory for a decade if the exit is an IPO, or right up until the company is trade-saled if not. After the few couple of years, it often doesn’t really matter if the CEO understands the business or not.
Example: Jon S. von Tetzchner, CEO, Opera Software
Whatsay?