As a venture capitalist I have lived through many founder/CEO transitions–instances in which a founder moves on to a new role inside a company, and a new leader comes in to assume the CEO role.
It’s never a completely seamless process. And there’s been plenty written about whether this transition is even a good idea in the first place: Five years ago, Ben Horowitz penned a much-read piece on why his firm prefers founding CEOs to stay in their roles. Three years later, LinkedIn Founder Reid Hoffman offered an articulate counter-point about why many founders should bring in a new CEO when the time is right.
Both Ben and Reid make good points, and I can tell you from experience that every company situation is different. Some founders are highly effective through an IPO. Others find, usually as their company transitions from a tiny startup to a larger organization, that they can’t focus as much on their original passions—often product development or engineering. Instead, their days fill up with managerial, HR and personnel-related tasks. Running a hyper-growth company is, after all, a lot different than overseeing five or six people in a garage, or a Silicon Valley ranch house. (Yes, I’m watching Silicon Valley on HBO.)
Often, though, these transitions are initiated by the original founder/CEO and are very successful. In his blog post, Reid talks about his thought process in bringing on a new CEO, Dan Nye, in 2007; he made the move mostly because he didn’t feel excited about many of the requirements of running a large organization. But it was really the second time that was the charm for Reid: In his blog post, he writes about how he eventually realized that LinkedIn’s new CEO would need to “own” product development and innovation, too. That led him to bring in Jeff Weiner, LinkedIn’s current CEO, who has been successfully partnering with Reid for the past six years. Coincidentally, I grew up with Jeff and have known him for over 30 years—he was a great choice and he has done a superb job leading the company.
Another good, and more recent, case study is Evernote. There, Founder/CEO Phil Libin also realized himself that he needed to make a change at the top of the company as it scaled. He said publicly that he searched for his own replacement “for a couple of years.” Just last month, Evernote and Phil announced they had brought on former Google exec Chris O’Neill as the new CEO; Phil moved into an executive chairman role.
A similar scenario is unfolding right now at one of my portfolio companies, Platfora. The company announced yesterday that current COO Jason Zintak is taking over CEO duties for Founder/CEO Ben Werther, who will become executive chairman. Again, in this case, Ben initiated the transition: After hiring Jason, a veteran executive of enterprise software companies like SAP and Responsys, for the company’s No. 2 role, Ben realized Jason was actually the right person to serve as CEO and take Platfora to the next level.
To me, this move demonstrates Ben’s true leadership skills. He realized his strengths and weaknesses, put his ego aside and asked Jason to take the helm, putting Platfora in an even stronger position to succeed going forward. Welcome Jason! And best of luck to both Jason and Ben in their new roles.