For better or for worse: Managing founder-CEO tension inside a startup

TECHNOLOGY

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“Are you gonna hire a bunch of useless salespeople like they have at Oracle?”

This was the first of many memorable interactions I had with Eliot Horowitz. Eliot was the founder and CTO of MongoDB, and in late 2010, I was interviewing to come aboard as president. Product-led growth was far from the common buzzword it is today, but the founding team at MongoDB had built a product that developers loved — the very developer love that would drive much of the company’s rapid growth.

My topic today isn’t product-led growth, but the relationship between a founder, such as Eliot, and a hired CEO and the key factors necessary for that relationship to succeed. That dynamic was always important, but focusing on it is critical in today’s more volatile, fast-changing technology markets.

On the surface, Eliot’s question was about business models and sales hiring. But it went much deeper: Our discussion was a live experiment on how we would work together, getting to the heart of a startup’s decisive partnership between a CEO and a founder. The territory we covered that day included:

  • Was I open to unorthodox thinking?
  • Could I justify my plans on first principles?
  • Was I willing to engage with a young technical founder on business issues?
  • Did discovering that the founders wanted to challenge the established way of doing things make me excited to join — or want to run for the hills?
  • Could I make a business decision contrary to the founder’s views and have us both feel good about the process?

All of those are valid questions and examples of potential tension points between a technical founder and a new leader brought in from the outside. How a founder and a CEO work through these points of tension could help determine the ultimate success of a company.

Beyond product-market fit

Lots can go wrong with a startup, but to succeed, two things have to go right: First, the product must fit the market well, which is almost always the domain of the founder(s), and second, the company has to execute successfully, which is sometimes the domain of a hired CEO.

In almost every case, the initial product and market vision come from founders. They started the company because they had an insight that something could be done better and an idea of how to do it better. When that idea resonates with a broad audience, you have the kernel of product and market fit. Without that, there is no company.

But that initial product-market fit isn’t nearly enough. A company needs funding, a team, and, ultimately, it needs to execute on engineering, sales, customer success and marketing. In some cases, a founder is interested in and has shown an initial aptitude for leading all these areas. In other instances, they don’t, and in these cases, they need a partner to lead the company’s operations.

The four years I spent at MongoDB — first as president, then as CEO — were a great experience. The company grew explosively and changed the market for databases and how developers built web applications. Perhaps more importantly, we laid some of the foundations for what would later become a hugely successful cloud business that transformed how enterprises delivered and consumed infrastructure software.

We wouldn’t have been able to do that without a strong partnership between the founders and me, particularly with Eliot and Dwight Merriman (founder and initial CEO, who eventually became chairman). Decisions didn’t neatly divide into categories of product for them and operational for me.

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