Why are so many CEOs former engineers, or at least have technical backgrounds?
I’ve come to almost exclusively invest in founder-CEOs that are engineers. Or at least where the co-founder CTO is a true equal partner to the CEO.
Well to get something off the ground,
- You need to build it. If you can’t help here in the early days, you better be a darn good salesperson.
- You need to recruit a great engineering team. Why at least in the early, pre-revenue days, do they want to work for a CEO that can’t also ship product? Maybe only if you have already done it before.
- You usually need to understand how and where technology is going. You don’t need to be an engineer to do this, but most “salespeople” CEOs can’t pull this off. At a minimum, you need to have steered a product from nothing to success to pull this off.
- You need to be able to build if not a jaw-dropping product, then at least, a very start-of-the-art one. Want to outsource it instead? How in this day and age you are going to build a great product that way, I don’t know.
How do you do this, if the CEO isn’t at least a pretty good engineer? It takes, best case, a lot more money. Maybe 3x-5x more money to get it off the ground. You need to pay up to recruit a “technical co-founder” and then she often will bring in 2x the engineers, at a higher price, than an engineer CEO.
There are exceptions, many of them. But usually there is an amazing (in terms of cleverness, if not always pure skillset) CTO from Day 1. And often. Salesperson CEOs burn a lot more money getting to $1m and $5m-$10m ARR.
After that, maybe it doesn’t really matter.