Dear SaaStr: What does a COO do in a tech startup/company? How would the team be structured? Can you give an example?

COO is a bit of a made-up job.

What I mean is, there is no organizational “need” for a COO per. You need a CEO. You need a VP of Sales, Product, Marketing, etc. You need, eventually, a CFO.

You do not need a COO. It is an elective, extra hire in most organizational structures, at least until you are huuuge.

If you think you need a COO, per se, anywhere earlier than $10m-$20m ARR … something is wrong in the management team picture.

But that doesn’t mean you shouldn’t hire one.

At the end of the day, hiring a COO, once you are at or past Initial Scale (say $10m ARR), is liberating. Once you are at scale, done right — a COO should manage all the things you, as CEO, cannot uniquely manage.

As CEO, once you have a complete management team, or most of it, a COO can then begin to manage some of the functions where you do not have special value. If sales has become an engine, maybe the COO can manage that. Or customer success. Or marketing.

A COO can also double your coverage with customers and prospects. Your biggest prospects and customers will close at a higher rate in the deals where the CEO shows up on a jet. The COO can be a close second, done right.

The traditional dividing line between external and internal sometimes makes sense between a CEO / COO, but that’s too simplistic. The line really should be between things Only the CEO can do and manage (which often are external), and things Someone Really Smart and Driven, but Not the CEO, can manage.

But a COO isn’t a crutch. This is key. A COO is leverage.

If you need a COO as a crutch, first fix your core VP-level management team. It’s not ready for prime time yet.

(Image from here)

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