You’re Probably not the CTO, and Neither is Your First Tech Hire

I originally posted this article on LinkedIn in January 2018.  As we stand on the precipice of a new year, I thought revisiting this subject might be useful if anyone plans on making big moves at their company in 2019!

Everyone wants a cool title and that’s totally understandable. Heck, I want a cool title too, because “Attorney” is pretty boring. But, the titles you choose to assign to your first hires matter a lot when it comes to planning the future growth of your company – so don’t be flippant about it.

Only One Title Matters – “Founder” – and You’ve Already Got It

Let’s get this out of the way first: if you’re a Founder,  that’s the only title you need and the only title that matters to anyone. Of course, you can call yourself anything you want but…I would caution against that. My rule of thumb is this: if you can’t get hired for a position somewhere else with the same title, then your self-ordained title is not accurate. “Founder”, on the other hand, doesn’t have a job description, it doesn’t have the baggage that comes with C level titles, and won’t have to be explained away to a hiring manager, should, heaven forbid, you ever need to apply for a job in the future.

Your First Technology Hire isn’t the CTO Either

And now you’re thinking, “So what, Collin? It’s time to make my first in-house tech hire, and I’ve already promised him\her the title of CTO. We’re a startup, it happens all the time, half the draw for him\her to come onboard with us is the cool title!

Sorry, still not the CTO. First off, nobody that’s been in business for any length of time believes a 23 year old software developer is a CTO – or has the skills today to be one. The same items I mentioned above apply to this first hire – is this person really a CTO? Could he\she get the job of CTO somewhere else? What will he\she actually be doing – is it “CTO stuff,” or is it really “Lead Developer stuff?” Most likely, Lead Developer is more appropriate, makes more sense, and will be better for this person from a career standpoint, should they ever leave your startup. Also, while I view the tie between equity and title as pretty strong, there is no hard and fast rule saying a Lead Developer can’t have more equity than a CTO.

Looking to the Future: What Goes Up Can’t Come Down

What about the future of your company? If you make your first tech hire the CTO, what happens when you actually need to hire a CTO with 20 years of experience to catapult the company to the next level? Will the original CTO be willing to take a change (reduction) in title? Will that cause problems? Will it be a pain in everyone’s butt? OH YEAH IT WILL BE! Businesses usually don’t fail because the idea is bad, or the people are lazy – they usually fail because people don’t like each other anymore.

So, what’s the take away? 1) Founder is the only title that matters – be sure to remind anyone who receives equity of that fact and; 2) Titles are not free, and will matter when you need to hire a C-Level executive, so assign them with an eye towards the future.

Leave a Comment

DISCLAIMER: The information provided is for general informational purposes only. Posts and other information may not be updated to account for changes in the law and should not be considered tax or legal advice. None of the articles or posts on this website are intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.