Startups · Entrepreneurship

Is it a mistake to give out big titles at the beginning?

Syam Vemula Senior BI Consultant at InfoMagnus

September 21st, 2016

Right now our company is in the process of being formed. We are a few cofounders and we are starting to hire the first employees. We are thinking about the titles. Obviously big titles could help in convincing top talent to join us but the issue that I have with that is that as we grow we may want to hire more senior people to lead those departments. What do you think is the way to go here? Many thanks in advance.

Niall McGinnity Cloud accountancy and startup / small business expert

September 21st, 2016

I spent 3 years as Founder in a startup where the CEO, COO, CFO titles were handed out to the Founding Team.  From an external perspective this is important, as any supplier or partner will wish to speak to the people with these titles when negotiating. Internally, it can be difficult though, especially if the Founding team has skills and/or experience gaps and more new members are added to the team, especially at the request of Investors.  If you have a CFO its hard to bring in a more experienced person and give them a more senior title.  If I was to do this again I would avoid the temptation to give out all the C level titles at the start and have more flexible titles (like Senior or Lead) that allow new people to join as the Company grows; after all those people should be more skilled and experience at a certain function (else why hire them in the first place) and the roles of the Founding team could and should change over time if the company scales successfully.  Hope that helps and best of luck with the new company.

Mats Samuelsson IoT Executive > GM, VP Product Management, Business Dev, Marketing | IoT Business Definition, Creation & Growth

September 21st, 2016

Is is a mistake to give out big titles at the beginning?Yes, huge mistake! Titles have a tendency to change people. Co-founders should be VPs if warranted - after the highest should be Director. Controller is all you need for finance - NO VP Finance! When you bring in new people everyone in the company will look at title - it has to be obvious they are worth it or it has to be earned! Flat organizations always good. Make sure thet job expectations are always aligned with Title! Best of luck!

David Austin Relentless problem solver and innovator.

September 21st, 2016

I do like co-founding team with the titles being co-founder over this and co-founder over that. The co-founder team is a hands-on project management team who have in addition to management, a maker skill set (or at least a maker mindset). It is not an operations team. Ultimately you will need to transfer to an operations business management model. Founders are typically project-oriented they normally do not make great operations managers. That's a different skill set (though with many overlaps). There are of course exceptions and you hear about those because they are amazing people, but they are the exception.  

Many maturing startups ultimately fail because they don't make that transition and partly because they kept project people in operations roles after it became an operations company... or they didn't realize that they needed to make a formal transition as such.

Manav Chaudhary Healthcare | Consumer Experiences & Journeys | Analytics | Start-ups | Mentor

September 21st, 2016

If somebody is joining your team for a big title only, it should be a No-No for you right away. Stay away from that. 

What a start-up needs is people who are motivated to do the hard work and have the skills / experience / attitude to make it happen? The focus should be on responsibilities, long term partnership or association and learning in the process (growth). 

If your start-up is at early stage, get people who are motivated by the responsibilities, the work with the founding team and the prospects of the idea. If they stay long enough with the team, titles would automatically become BIG but they would be irrelevant at that time after all the hard work. :) Good luck.  

Joseph Wang Chief Science Officer at Bitquant Research Laboratories

September 21st, 2016

Titles really don't matter until you have a bureaucracy, and if you are a startup you really shouldn't have a bureaucracy.

Also big titles do *NOT* convince top talent to join, and anyone who would be persuaded by a title is someone that you don't want, since if nothing else it means that they have no business sense. 

The other thing is that titles often mean very little to the outside world.  In some startup heavily places in the world, you will bump into a CEO, CFO, and CTO at every street corner so the title means pretty much nothing.

Eric Fisher President, iDeal Networks

September 23rd, 2016

My three sense:-) in regards to titles:
1. It helps to attract the right level of Senior talent for those who have an entrepreneurial bent  and whom you may not be able to afford at that point in time.
2.  For your funding roadshow, VC's invest in your team and they  assess each individual and their ability to execute their role in performing due diligence. They want to ensure that you have considered and brought on board the right level of  talent and skills for the current ramp up and stage you are at.  You most likely do not need a full time finance, hr, or other positions to get funded.  It is dependent on the VC's criteria, but if you are months away from commercialization it is more prudent to take on senior advisors on a part time basis for certain roles to create the infrastructure and approach to markets and not waste money in filling roles that are not yet in a position to be engaged.  I like David's comment as to Co-founder titles for those roles that are not outward facing.  But they do invest in your vision to grow your venture, so at least one of the Co-founders must assume the role of CEO.
3.  Depends on the product or services and the market you selling to.  Who are the decision makers.  If you are selling  B-2-B and the prospective gatekeepers are C-level types it helps to have sales, marketing, business development, CEO positioned at the same level.

Gabor Nagy Founder / Chief architect at Skyline Robotics

September 21st, 2016

Some startups use fun titles, initially to avoid this title lock-in issue.
Like "supreme technology thinkologist", instead of CTO...

Danny Skarka Let's do Video Production and Social Media. General Manager and Director of Production at MediaOne Studios

September 21st, 2016

The importance of title is outward facing for the most part. To give the person street cred. Internally, who cares. Keep department head as "director" and as the company grows and departments have some commonality, as a Sr Director or VP position to manage several departments. 

It seems silly to have a VP if there is no P or to have a Sr Director when the next person down is a 9-5 hourly worker. 

Sunil Vadehra Director, VisAmCo Technologies Pvt. Ltd.

September 21st, 2016

In any organisation, first thing is to decide the right structure of the organisation, keeping in mind the business focus area. This structure consists of different functions as well as activities envisaged. Different levels of roles within the functional area are to be played. At the startup juncture, one faces the problem that your question describes. One has to see hat level of competency does the existing member/ employee has and accordingly the nomenclature should be decided.