Hiring Experienced Executives At Your Startup

Hiring big-company experienced executives to your startup is hard but important.

It’s important because (done well) they will inject very useful experience into your organization. There are many high-consequence business moments that you cannot easily prepare for by reading a book. In some cases, no book can ever actually prepare you for the emotional challenge, and in other cases there’s simply no useful material to learn from, because nobody who’s written about the situation actually knows what the hell they’re talking about.

SaaS-industry moments that especially benefit from real-life experience include:

  • How to do a reorg, particularly a reorg of a very specialized business unit such as a cross-functional product and engineering team, or a globally distributed SaaS sales team
  • How and when to launch new product lines
  • How and when to expand to new geographic regions
  • How and when to restructure your go-to-market motion (for example, from a geographic to an industry focus)
  • How to get acquired or go public

These situations are nuanced, high-consequence, rare, and inevitable. While agile decision-making and iteration work well in many situations, these sorts of major changes often need to be exactly right the first time. An experienced executive who’s climbed a similar mountain in the past can save you significant time and heartache when climbing the next one – especially when there are no do-overs.

People who’ve Seen It Before can also help you move faster – when you’re 51% sure that you need to replatform your technology, reorg your sales team, or raise that massive funding round, they’re 90% sure and help to push you over the edge. My own career was shaped for the better by several experienced execs whom I worked closely with at formative moments – I’m forever grateful that I had the opportunity to work with those individuals.

But hiring experienced executives is hard, and when done wrong can be highly destructive.

One typically hires experienced executives into positions of importance, where a mishire is very costly. A lousy engineer is annoying but probably largely inert. A poor-performing executive can be devastating if they cause regrettable attrition, misallocate resources, or slow momentum.

There’s also a tendency to scrutinize the work of fancy outside hires much less:

  • Jimmy was an [Impressive Title] at [Successful Larger Tech Company]
  • We hired him because we need his expertise to scale [and we don’t know how to do it]

It’s hard to argue with anything that Jimmy does:

  • If Jimmy does exactly what we think was necessary, our instincts were correct
  • If Jimmy does something very different from what we were expecting, then it’s good that we hired him to keep us from going down the wrong path
  • If Jimmy does nothing, then he very reasonably needs to gather more information

The biggest challenge: In many cases your board, investors, advisors, and even friends will advise you that you must hire certain experienced big-company executives in order to be successful. This advice will often come with a mild dose of negging, which makes it even harder to ignore. For our advice on how to handle this, read on.

What To Look For When Hiring Experienced Executives

A Good Reason to Want the Job

Beware executive hires who will not be getting any of the following benefits:

  • A title or responsibility bump
  • A company quality bump
  • A lot of money

All of the above are good to great reasons to take a job. But if they aren’t getting any of them, and if they were so great at [Fancy Prior Company]… why are they talking to you? In my experience, experienced executives who are open to jobs that don’t bring any of the benefits above are frequently weak performers who can’t cut it. They will say things like:

“I am just fed up with corporate bureaucracy [after 20 years], I want to work in a faster-moving environment [like I have never seen before]. I’m really excited for my next journey [which is completely different from anything I’ve done before].”

Unfortunately, these hires usually simply don’t have better options, which is a bad sign after they’ve had so many years to build a great reputation and network.

There are exceptions. People who are returning to the industry after a sabbatical, time spent caring for or building a family, or after exiting a burnout-inducing startup stint can all be great hires. I’d also factor in whether candidates have real startup experience in their past and know what they’re getting into. But consider it at least a yellow flag if your company will be the “smallest” job that someone experienced has recently held, as defined by a combination of company size and role scope.

First-Principles Thinking

You hire experienced leaders, and pay them a lot, so that they can adapt their experiences to your situation.

You do not hire them just because they have experience; you actually hire them because they increase your organization’s versatility. Their experience gives them ideas for operating that you don’t know about, increasing your team’s range. If an exec shows up and just imposes what they’ve seen elsewhere, they are actually reducing your versatility. One way to check for this is to ask people what their previous company did wrong, and more importantly, why it was flawed.

If experienced execs can’t wield their experience effectively, they might as well have been dog walkers in their past.

A Brisk Promotion History

Big companies have issues identifying talent:

  • They regularly overestimate poor but politically savvy talent, mistaking political skill for competence
  • They occasionally miss high talent in obscure locations: For example, highly productive engineers in hard-to-see or hard-to-understand corners of the business

But big companies are actually pretty good at identifying great talent in high-visibility places. If you’re a superstar in a reasonably identifiable location, you’ll probably get noticed eventually.

So while getting promoted a lot doesn’t necessarily guarantee that someone is great… pretty much everyone great will have gotten promoted frequently (this includes being tapped to move diagonally upwards). If they’re missing this positive flag, figure out why.

What To Watch Out For

A Series of Short Stints

We’ve written before about the dangers of a resume comprised of many short stints.

Executives are typically highly incentivized to stay at companies for a while – typically due to compensation schemes that are heavily skewed towards equity and company performance. Constant job hopping at the executive level is often a sign that someone is a better interviewer than executer – you need to stick around to maximize comp at the executive level.

But you can build an impressive resume in big tech by coasting on the compounding momentum of tech companies on the rise, and you can link several impressive names together if you’re a great interviewer and good company picker. As an executive, it’s very possible to land and leave at several companies before your bad decisions or lack of ability to catalyze action catch up to you, which means that the ranks of tech executives include many people who’ve spent years failing upwards. If you see a long pattern of short stints in an executive’s resume, be very wary of what might be hiding beneath the surface.

Arrogant Interviewing

I’m a long-time executive. I’ve seen it all. Billion dollar M&A deals. Directors from the highest-flying FAANG companies interviewing to be on my team. CEOs of public companies have abased themselves in front of me in glass fortress conference rooms, hoping to get a partnership going. I’ve seen our company spin up new product lines, enter new countries, all without a hitch. These people I’m interviewing with haven’t seen anything. Half of them are in their twenties. Their VP of Product is wearing fucking Birkenstocks. They’re making what was it, $15M in annual revenue? $50M? I forget – I can’t count that low. They need me, and I don’t need them.

You would think that if you were trying to get a job, you would leave this attitude at the door when interviewing. And you would definitely think that you would leave this attitude at the door when you take the job.

But I’ve seen much more arrogant or belittling content in interviews than I would have expected, and arrogant interviewees have reliably brought that attitude to the job. Every situation will be colored by the lens of this executive’s awe-inspiring former employer; they will discount your team, talent, product, and progress. Your future will never be as bright as their past.

Arrogance is a sign that people think growth and leadership are easy, and anyone who’s been even a moderately successful executive knows that they are not. The only people who claim to know everything and assume that the journey is easy are teenagers and fakers. Even the cockiest, most self-reverential veteran leaders I’ve ever met all understand that the journey is hard.

So if you see an arrogant interviewer, just ask yourself – are you ready for an arrogant teammate?

Making The Most Of Experienced Executives

Have a Specific Role in Mind

A trap that I sometimes see teams fall into:

  • They get connected to a fancy executive who’s open to new opportunities through happenstance, often their network
  • They become enamored and just have to find a role for them
  • They craft a new role and bring them onboard, only for the executive to struggle because they weren’t structurally set up for success, or the company was too early for their operating style

Don’t fall in love with a fancy resume – it’s better to hire for what you need, rather than what you wish you needed.

Start Small(er)

You should typically start a new hire of any experience level with a smaller role and then ramp them up. Small wins compound into big wins; a lack of wins decays into systemic distrust. This is common advice because it works.

But with experienced executives, there’s often a temptation to ignore this canonical wisdom. It can feel like someone is just such a badass that they can onboard faster and better than anyone you’ve hired before. This is especially true when the executive is working out and actually is as great as you had hoped – it’s just so tempting to put more on their plate as soon as the first week.

My recommendation is to not skip the step of starting small even with the most experienced executives. In fact, one of the only ways to screw up an otherwise great hire is to ramp their role too fast. Great hires are destined to succeed – don’t kill the redwood tree by over-watering it when it’s a sapling. Let them onboard and get their wins like anyone else, and if they’re really great you have the rest of their career to accelerate their growth. But don’t skip the step of starting small at first.

Seek Balance

From what I’ve observed, it’s optimal to find a balance of home-grown and external talent as you reach tens to hundreds of millions of dollars of ARR. Both early stage startup people and gray-haired executives bring distinct value, and having a balance prevents one side from sidelining the other.

Having a balance of internal and external leaders allows you to retain strategic continuity and startup DNA from the old guard, while injecting industry best practices and perspective. You’ll also avoid the demotivation of older employees feeling like they were replaced and kicked out of the family, while expanding your company’s network more broadly.

For a quick example of finding balance, look at the wildly successful Snowflake:

  • Snowflake’s CEO and his entourage (CFO, Chief People Officer) joined in 2019, less than two years before IPO
  • Their CMO joined in 2016 when the company was in growth mode
  • Their CRO joined in 2013, when the company was truly a startup
  • 2 cofounders remain in operational roles, including one who runs Product

Final Thought – Don’t Get Into a Big Company Hiring Spiral

In my experience, big company people strongly prefer to hire other big company people. The reverse is not true – startup people are generally pretty open to hiring both corporate veterans and fellow startup savages. If you allow your company to be completely taken over by big-company people, they will fill it with people like themselves.

This can be fine in some situations, but many (perhaps most, perhaps literally all) companies benefit from the pirate DNA that genuine startup people bring. Most of the largest Fortune 500 companies eventually run critically low on entrepreneurial startup DNA, and try to recapture it through acquisition – they’re drinking the blood of the young to reclaim their youth. It’s fine if you feel like you don’t need startup DNA, but if you’re going to lose it at least let it be a conscious decision.