Be Careful About Being a Meddling Startup CEO

I recently wrote a post talking about how some VCs meddle in operating company decisions or some executive teams are too reliant on VCs to jump in and make hard calls for them.

Fred Wilson also wrote on a similar topic in his usual more succinct manner, with a great quote being:

“One thing I know for sure is that those who advise and invest in startups cannot and should not meddle in the day to day decision making. It’s harmful and hurtful to the startup and those that lead it. So operating at a higher level, helping to set the framework for decision making and then sitting down and watching the game be played, is certainly the way to go.”

Of course I agree with this. In practice it can be a fine line between sparring partner / coach and stepping over the line to brute-force persuasion. And you can easily err the other way of not weighing in forcefully enough. I see this in cases where sometimes board members don’t want to take on the “Pottery Barn Rule” that if you break it, you fix it. And with most difficult decisions being subjective it is also a fine line to walk.

While everybody can easily point at VCs or board members and accuse them of being meddlers, the same is actually true of many CEOs. I speak from experience. This can be even more harmful than the board meddler because the CEO is full time and also has more authority.

When you first start a company the CEO, of course, is “chief everything,” which includes sales, marketing, PR, product, HR and even office management and accounting. So it’s natural for the first year or two that the CEO dips his or her hand into nearly every activity. But as a company grows in revenue, customer base, venture capital and therefore executive teams members – things need to change. Many CEOs I know are control freaks and thus struggle with delegation.

My messages is for these types of CEOs. Beware. Meddling in the wrong ways or too often can either produce a culture where people don’t like to take actions because they know you’ll eventually just step in anyways or equally badly the company gets unfocused from the constant interventions.

Here is where I see this really play out:

Product Management
Most CEOs fancy their own product skills and like to weigh in on priorities. I did this. At times I wanted the engineering team to produce features to support our sales efforts to I occasionally leaned on them a bit. Eventually I had a head of Product Management – the best I ever worked with named Tim Barker – politely say to me that this wouldn’t fly any more.

Tim had a great solution. He said that product management would run like “asset allocation” in which we would allocate a certain % of dev to different purposes each quarter and once set they couldn’t be changed. …