222: Job Titles in Startups
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In this episode, Steli and Hiten talk about the value of giving titles in startups. Hiten believes titles are NOT important and people should be more focused on the work rather than the title. Steli says there is a cost to giving titles and oftentimes, people’s actual work does not match their description. Listen in as Steli and Hiten discuss when the use of titles is beneficial for your company and also when it should completely be disregarded.
Time Stamped Show Notes:
- 00:05 – Today’s episode is about titles in startups
- 00:22 – Steli and Hiten see many people with titles in startups
- 01:12 – In a startup, there really are no titles in the beginning
- 01:50 – Everybody has to do almost everything
- 02:02 – There is general work that needs to be done
- 02:33 – Steli does not care about titles
- 02:51 – There are two different schools of thought for startups
- 02:54 – First school of thought: titles do not matter until the company gets bigger and it would be practical to use the titles
- 03:21 – One strategy is to give a title that is lower than their previous position
- 04:12 – Second school of thought: titles are the cheapest thing you can give out in a startup
- 05:14 – Steli knows a company who gave the title of founder to all the members of their team
- 06:03 – Steli disagrees that it does not cost anything
- 06:45 – Hiten says the whole title thing is crap
- 06:58 – Startups start by having people do multiple things
- 07:06 – Overtime, a hierarchy forms and there is a need for managers
- 07:22 – And then, organizational charts start to become a necessity
- 07:58 – Hiten likes to focus more on what needs to be done rather than the titles
- 08:04 – Hiten has a staff who started as an analytics engineer
- 08:11 – The guy’s position is lower as compared to what he was in his corporate job
- 08:17 – By the end, his work was equivalent to the VP of Product
- 08:26 – The guy did not care about the title, but just really wanted to get the work done
- 09:05 – The guy grew with the company
- 09:21 – Hiten thinks his company had more problems when they gave titles to people
- 09:29 – They hired a VP of sales but calling him a director would have been better for the company
- 09:55 – Hiten thinks it would be easier for people to come into the company if there were no titles
- 10:03 – Hiten wants his company culture to be one where no one is better than the other
- 10:15 – Do whatever you can to preserve your company culture
- 10:28 – When people feel equal, they end up doing better at work
- 11:01 – There is no need for companies to have rules for people when it comes to titles
- 11:36 – Steli thinks there is a lot of hidden costs to giving titles to people like internal friction or confusion
- 12:23 – Ask yourself what kind of people you are going to attract if you give out titles to everyone
- 12:46 – It is also a credibility issue
- 12:58 – Steli knows someone who had a CTO title in his resume and was applying for a sales position in his company
- 13:20 – The guy explained he was working at a non-tech company where he was helping with the Gmail account, calendar and blog
- 13:46 – This is damaging to your reputation if the only thing you did was to set up a blog
- 14:14 – You are not a vice president of something if there are only 2 people under you
- 14:20 – Do not give yourself a title that does not match reality because it will hurt your credibility
- 15:03 – When people ask Steli what he does for Close.io, he usually tells them about the work he does
- 15:23 – Giving out a title is irrelevant compared to stating the actual work you are doing
- 15:42 – The one scenario where titles can be practical and helpful is in sales
- 16:14 – The corporate world cares tremendously about titles
- 16:30 – When you are setting up a call with a corporate executive, your title will matter to them
- 16:45 – The corporate executive will more likely respond to you if you sign with your title rather than just saying you are an employee
- 17:14 – In the corporate world, titles measure how high you are in the organizational structure
- 17:39 – If you want to get the attention of people in the corporate world, the better option is to give a title
- 18:12 – In the final stages of the deal, loop in the CEO in the email conversation just so he can reply and people will respond to this
- 18:50 – Steli’s tip: Use titles strategically to make sure people do not overlook you
- 19:41 – Hiten’s tip: Be thoughtful about the title and how it can impact your company
- 20:41 – End of today’s episode
3 Key Points:
- When hiring people, ask what is more important to them – the work that needs to be done or the title they can have.
- Giving titles does have a cost, even if it is not monetary.
- You can use titles strategically when dealing with corporate clients as they care about your rank in the organizational structure.
Steli Efti: Hey, everybody. This is Steli Efti.
Hiten Shah: And this is Hiten Shah. Today on The Startup Chat, we’re gonna talk about titles in startups. Yeah, I think this is a very interesting topic. One of the things I see a lot is that like this person’s a CEO, and there’s a CMO, and then there’s a CPO maybe, like a chief product officer, and then there’s nobody else.
Steli Efti: Oh wait, even more important or better, when there’s a CFO and there’s nobody else.
Hiten Shah: Whoa, whoa.
Steli Efti: There’s no money, no customers, no revenue, but there’s a CFO.
Hiten Shah: Oh yeah, I thought you’d say CRO for chief revenue officer, but hey.
Steli Efti: To me, that’s better than a CFO at that stage. Somebody should worry about revenue and not the finances.
Hiten Shah: That’s awesome. Yeah, we’re starting out laughing because this is about something I think we both share or haven’t talked about is like in a startup, there are really no titles, especially in the beginning. Yeah, someone might have cofounder, CEO. Someone might be cofounder, head of product. I mean you can come up with these names, but at the end of the day, they don’t mean anything. I mean right now, I’m the five different things of one of the things I’m working on, and that’s okay. It feels great and I’d never call myself … Honestly even in the companies I have, like I don’t think of myself, and wake up, and be like, “I’m the CEO of these things.” Even though I probably am in a lot of people’s eyes, but to me it’s just I’m just another person that does that.
Steli Efti: Yeah. I think that I couldn’t agree more. I think in the early days, especially in the very beginning, like everybody has to do almost everything. There might be some areas of expertise where some people will assume those areas just naturally without having to give them titles, but there’s also just gonna be a lot of general work that needs to get done and people will just attack them on angles. Yeah, I’m always concerned when I meet like a founding team of three people, four people, and they introduce themselves with a business card that has a very fancy title on it. That’s always semi a red flag on like priorities. But then again, it’s also kind of a youthful ignorance that is also charming in a way, can be charming. But it can also very much be dangerous. But I never cared about titles. I really don’t give a shit. In my perfect world, like I don’t know, I think at least for a good amount of time, we’d all just be employee … Like, our title would just be employee, just employee of company X. We all just work here and try to make this work. But it’s funny. I think there’s two school of thoughts that I’ve seen in startups. There’s one where it’s like titles don’t matter. Then eventually once the team gets bigger, there’s a utility to understanding who is doing what in the company, right? So titles start to be practically useful. But even then, there’s a school of thought that says even when we hire, we want to hire people that don’t care about that title, that don’t care about that type of stuff, that just care about the work. I know of startups that would always just make it a policy that anybody they would hire, that person would come in one level below what they used to be called before. If they were a director of marketing, they would have to start here as a marketing manager. If they were a VP of sales, then they would have to start as a director of sales. That was their test to see is this person humble? Does this person care about the right things? Will this be a deal breaker? Does this person care so much about the title that starting somewhere, even if it’s the great opportunity with the right package, and the right team, and everything is exciting, they care about that title so much they would never take a step back. I know about those examples. But I also know about the opposite example where a very famous … I think Andreessen said this once if I’m not mistaken. I’m not 100% sure. That titles are the cheapest thing you can give out in a startup, doesn’t cost you anything. So why not utilize this thing that costs zero, kind of just like whatever you make it up, but that can make people really happy or can help you recruit people? I think that he talked about this concept of handing out titles pretty heavy handedly to make people excited or to be attractive. I definitely notice this. It’s funny. I have a recent example where it’s a VC firm/accelerator in Europe. I definitely know that they are super heavy handed on this where I think there’s like three people that started this thing, and they’re all like the people that brought in all the money, and that have all the expertise, and the network and everything. But to build a young team of excited smart people around them, I’m actually pretty impressed about the team overall. I think they’re doing a really fine job. But the thing that sits weirdly with me or the thing that I notice is that they have like, I don’t know, maybe 10 people, 10 young people that they brought on the team. They give all of them the title of founder. They’re all cofounder of this accelerator. I don’t know, maybe I’m just too narrow minded. But I cannot need 10 cofounders of something. That’s just hard for me to compute. I see both schools of thought. Like, whatever, call everybody a VP of this, a VP of that. The other school of thought that is like, “No. No titles,” or, “As low titles as possible to really challenge the ego and because we don’t want people that care about titles.” I’m wondering what your … I’m sure you have an opinion of this, especially the heavy handed title thing as a strategy to attract talent or to give people something that doesn’t cost you anything as a business. I will say I disagree that it doesn’t anything.
Hiten Shah: Page as you. This is just bullshit.
Steli Efti: Huh? Go ahead.
Hiten Shah: I’m completely on the same page as you. This is just bullshit. Like giving people titles, making this shit up. I love the idea of giving someone a lower title. But all of these things are veneer. They’re like a test. They’re like a test of a person. It just doesn’t feel right to me. It’s like there are general areas in a company. Honestly, there are some things that are not even titles, but operationally different. As in tech land, in startups, we call it individual contributor, which means … That’s an individual contributor and are a manager. Early on, I think everyone tends to be an individual … Some people are a hybrid because, you know, you don’t really see it. Understand it until you … Well then there’s that I think about.
Steli Efti: Hey Hiten, I think that the connection is getting bad. You’re cutting in and out pretty heavily right now. I’m not sure if you are mobile in an area that might not got good reception.
Hiten Shah: Let me know. I’m not mobile, I’m at home.
Steli Efti: You’re at home, right? I’m not sure if it’s-
Hiten Shah: Let me know if it cuts out again.
Steli Efti: Okay, sorry.
Hiten Shah: I heard you cutting out earlier too. But I don’t know, maybe it’s just our connection. Yeah, I was just saying that I think the whole title thing is really bullshit. Even lower titles or thinking titles are cheap. Titles aren’t cheap. To me, it’s like early on, there’s really people just doing stuff like you said. People are wearing multiple hats. They’re probably doing the same things a lot of the time, different things. Over time, some hierarchy forms and some people become managers. Or you hire in managers because you found some great ones. But what I mean by manager is their primary job is basically being responsible for other people and their work output, not just your own work output. Then we get into these organizational charts and all that, which to do business, I really believe you need this. This whole flat hierarchy, flat organization stuff hasn’t seemed to be working for most companies. There are things like pods of groups of people. But even those groups of people have functional areas. There’s a product person. There’s a designer. There’s an analyst. There’s an engineer or two, or whatever. There’s still some hierarchy going on, even if it’s not necessarily a manager. There’s still some processes in place for accountability and things like that. Reviews still happen. To me, I focus much more on the behavioral aspects of it and what needs to be done to get the job done. Like, what do people need to do? What’s the work we need to do? I focus much less on the titles. I mean somebody who worked their way up, so to speak, as the company grew in one of my companies, he himself started out as an analytics engineer. In a lot of ways, that was a demotion in his title compared to where he was at in a corporate job. By the end of it, he was the equivalent of VP of product. He may be CPO depending on how you look at the size of the company and what his title should’ve been. But he never really cared about the title. He was just really good at working himself out of a job, and constantly doing jobs, and then either delegating them, giving them to somebody else, or just automating them. He kept working himself up. He is a manager and so that was what he ended up doing over time. But he really wanted to work in a startup, and have that attitude and mentality. We could afford him at the time. He wasn’t super expensive, but he was definitely not somebody we would’ve hired at like five people or even like 10 people. We hired him more at like 10 to 20 people. That’s just a good example for me of someone you would expect that would want a VP title or director title early on because they might’ve had it before. I think he had a director title. He ended up just growing with the company. That’s a classic case to me of somebody who doesn’t give a shit about a title, and a company, my company, that didn’t really care about having a system in place for like a rule for how people come in, and just how it needs to be done. Instead we were very specific to the people that were coming in. In fact, we screwed it up the most when we gave people titles of any kind, and really official titles where they were doing that job. Even like our VP of sales who I hired, Ben. In hindsight, the rule of make him a director, not a VP, would’ve probably been smarter for us to do. Not anything against him, but just the way the company would’ve taken that. I think people don’t think about all of these things. I know I just said earlier don’t have any rules. That wasn’t a rule. That was just for that role in this day and age, I would definitely demote the person, or leave a level set at where they were, just because then it’s easier for them to come into the company in my opinion. I’d convince them of that judging by the kind of culture I want, which is this idea that nobody is better than anyone else. I think that’s really what this boils down to to be honest with you. You’re trying to avoid that somebody’s better than anyone else inside of a company. I would just do whatever your culture is. I would do whatever you can to preserve that. I know there’s a lot of cultures out there, especially a lot of things coming out about Uber, and even Tesla and a bunch of companies where it’s not really … Like, people are equal. But to me, I found that when people feel equal, and they feel like they can have a say, and things can happen, you end up getting better people for every role in your company. Not just like a single role. Regardless of their own level of expertise or their own experience because it’s not about that. It’s more about like people feeling hurt. It’s more about people feeling happy when they come to work and leave. Not just happy, but feeling like they made progress, and they have an alignment with the company, and they were going towards the company’s goals, et cetera. To me, that’s my little rant on this topic, which is like damn, we really try to make rules for people when people hate rules. What’s up? We’re individuals. We want to be treated as individuals. Not like, “Oh, this company has a rule. I’m gonna have to do this when I join this company.” Just think about even somebody talking to their friend about joining your company. Does it sound stupid? Do you demote everyone or that everyone has C levels or whatever? Yeah, it sounds stupid, right? So then don’t do it, you know?
Steli Efti: Oh, I love it. First of all, I want to bring it back to this titles are cheap and that it doesn’t cost anything because I actually think it does have a lot of hidden costs. It does cost. It might not cost you money as a company to give out titles like crazy. But it can cost internal friction. It can cost confusion. Who the fuck is anybody if everybody is the C … Like, if you have 30 people and they’re all CEO, it could be confusing to people. It might be a way of being edgy, and cool, and different. But it’s also gonna confuse the fuck out of every new person you hire and everybody externally. Nobody will know what’s going on in this company. Confusion can also be distracting. It might attract certain people. Giving titles out heavy handedly and attracting somebody that way, you might want to ask yourself what type of people you and I attract. If somebody chose your company over somebody else’s because you gave them a VP title versus a director, is that really who you want? The way this person makes decisions, is that really gonna keep them around and keep them productive? I have my doubts about that. I do think that it is costly even if it doesn’t cost you money directly. The other thing is it’s a credibility thing. Honestly, if I look at your resume and it says … I had this a while back with a kid that we were talking to to give a sales position. On his LinkedIn profile, in his resume he had like the CTO title at a startup. I’m on the phone with this kid. I’m like, “Dude, are you technical? Like were you … How … Why did you … It says CTO. You were CTO of a tech company and you wanna be in sales at my company? Just explain that to me.” He was like, “Well, you know, this was a very non-tech company. Everybody knew nothing about it, and I’m kind of like I don’t know how to code. But I like technology, and I was helping them with them setting up their Gmail account, and their calendar, and their whatever, their blog or something. So I was kind of the default.” This is not just charming. This is damaging to your reputation. Don’t put CTO on your resume if you set up a blog for somebody. Even if they called you that. They didn’t know any better. Please, you should … I mean it’s hard to … People won’t take you credible. You’re a VP of something, right? Tell me about the organizational structure you were managing. Who was the director under you? Who were the managers and how big was the org structure? If you’re the VP of something and your team is a team of total of two people, you’re not a VP. You’re a manager. Just don’t give yourself a title that don’t match reality because it’s gonna hurt your credibility. It is gonna make most people who know what they’re doing think less of you, think that you’re a joker, that you just don’t know what you’re doing. It’s not impressive to be a VP of sales if you’re on a real VP of sales, it is a joke. Be careful with this stuff. As you said, you’re like, “I don’t even know. Some people think of me as CEO, but I just do work.” When people ask me what I do, I usually just tell them … Oh, when people ask me the company, I tell them, “Yeah, I work for Close.io.” When they ask me what I do, I just tell them what I do. I’m like, “Well, you know, I do a lot of content. I work with the people in the company. I don’t even fucking know what I really do.” People laugh. I talk about what I do and what company I do it for. I never say, “I’m the CEO of so and so.” It’s not because I’m ashamed of it or because I don’t want to say it. It’s just because I find it irrelevant. If you ask me what I do, I’ll tell you what I do. Being the CEO is not the answer to what I do. I do different things day to day than a year ago. Depending on when you ask me, my priorities are different, so that’s what I do at that time. But I want to actually bring up one scenario where I think titles are incredibly helpful in startups and actually using overblown titles or using the really prestigious, the C level titles, can be very practical and useful.
Hiten Shah: Sweet.
Steli Efti: That is in sales. This is not the world I’d love to live in. In a better world, people would not care about this. But people in general, like outside of the startup world, outside of like entrepreneurs that are operators and that are not interested in bullshitty titles. The greater world, especially the corporate world, the corporate world actually cares in a tremendous amount of odd titles. So when you want to get in touch with somebody important to potentially sell them on your solution, or get them on a call, your title will matter to that corporate executive more often than not. If you send the corporate executive an email and you are just Steli, employee of Close, that will give a much weaker signal to that executive to respond to you than if your title is Director of Marketing or even VP of Marketing, or even better, CEO, right? These titles to corporate people, they do signal how important you are because, when massive corporate organization, that’s kind of how winning happens. It’s not by necessarily how much work or how much value you create, but much more measured by how you have moved up the ranks and what your title is within the org structure. Because they care about the title so much in their own career, they care about titles externally as well. Your title will them if you’re really, really important and they should care talking to you. Or if you’re not important, or not more important than them, and they shouldn’t care about you. If you were doing some kind of outreach and you’re trying to get people’s attention in the corporate world, in the enterprise world, giving your intern some fancy title like Head of Corporate Partnership, or Director of something, might not be the worst idea in the universe because it is free. But it would just be for that email. In that, some also are like in that moment, there’s nobody else that’s reaching out to try to create a corporate partnership, so he is the head of corporate partnerships at that moment. But having a fancy title like that will capture their attention. Often times in sales, I teach people to actually loop in the CEO, maybe even in the final stages of the deal, just so people see that the CEO was CCd or that the CEO responds in an email thread and says, “We’re excited. I’ve heard a lot about you. We’re excited to get you on board. We’ll do our best to serve you really well.” Just like that little touch of, “Oh my god, the CEO responded.” It sounds silly and it shouldn’t be this way. The two of us know how useless a CEO could be and how little it really means. But people care. Especially in the corporate world, they do care. I think that using titles strategically to make sure that people don’t overlook you, and make sure that people feel treated really well, or they feel like they’re at the table with the right person, I think that that’s smart and that’s just practical. So that’s the one tip I’ll give them, the one situation where I think you should get a little crazy with the titles because I think it can be very useful.
Hiten Shah: Yeah, I love it. I didn’t think of that one. Don’t deal with that one a lot. But we did the same thing when it was a sales situation. You can see how much I try to get that out of my head. Yeah, it’s great though, like I love it. It does matter. Because when you’re selling to companies that are larger than you, titles do matter. Once you get past like 50 or 100 people, those titles, they start mattering for people. A lot of the things we said have to do with startups. Yeah, I would say that my tip is probably pretty basic. Sums up a lot of stuff we talked about. But it’s like be really thoughtful about the titles. Really think about what impact it’s gonna have to your company. Just think about it. One good example is nobody has any director of VP or C level title. You’re looking to recruit somebody who will level your company up. You really feel excited about them. But you need to give them this kind of title. In a lot of ways, if you’re a cofounder, or a founder, a CEO, and that’s your title let’s say because it just has to be for whatever reason, you’ve got a small company and you’re bringing in your first executive like that. How’s it gonna feel to the whole company if you bring in this sort of one person with this crazy title? In my opinion, it actually even demotes you in a lot of ways. You want to be careful about all these scenarios and think through what’s gonna happen to the other people in the company. How are they gonna feel about it? Making sure that you even ask that person a simple question, which is, “If you come in with title X, how is that gonna make everyone else feel and what are you gonna do about it?”
Steli Efti: I love it. All right, this is it from us for this episode.
Hiten Shah: Happy titling. Bye.
Steli Efti: Happy titling. Buh-bye.