You're Not a CEO

This is part of a series of posts about decisions we've made at Sentry over the last 15 years. I genuinely feel we've been through a lot with Sentry and our learnings provide value to others. More so, I believe people in this industry, most successful people, do others a disservice by not having honest conversations about the hardships and endurance it takes to succeed. This all started with Sentry: From the Beginning .

In 2019 I stepped down as CEO at Sentry. I remember when talking to our CFO about considering the transition his response (whether considered or not) was that he thought I was capable of doing the job. I hired a CEO not because I didn’t think I could do the job, but because I didn’t think I was the best person for the job. You might not be either, and there’s a good chance that even if you’re calling yourself a CEO, you’re not operating like one. If that thought has occurred to you, or you simply want to learn more about how this process works, this post is for you.

Let’s start from us raising a Seed round, as this journey is a long one.

Even before that round was closed, our partner (Dan Levine) asked if I wanted to be CEO. I didn’t really consider the question at the time (or why he asked it), but I knew one thing for sure: it wasn’t a relevant decision I needed to concern myself with. I’m very much an out of sight, out of mind kind of person. If the decision isn’t relevant right now, I’m not going to make it. I don’t recall exactly how I answered in that situation, but I do recall my sentiment over the years: I’ll do it until I don’t want to, until I can find someone who’s a multiplier rather than a small optimization. Dan asked me that question at least once a year after that, and it was always something that led me to consider what that might look like.

After a while the job started to take a toll on me. I was leading every department, and I was extremely hands on. Product and Engineering were my focus, but Sales and Marketing were becoming increasingly important. That meant I was spending more and more of my time focused on things I didn’t enjoy: hiring executives, thinking about field sales (not my favorite thing), and generally speaking dealing with a growing amount of (often needless) bullshit between all of these teams. Sentry was an engineering-dominant company at this time. We had a small sales and marketing effort, though a lot of it was grass roots and led by doers rather than leaders. Once we started filling out the leadership team that quickly opened my eyes to what being a CEO actually meant. To do it well I couldn’t spend my time being hands on in engineering anymore. I had to focus on accountability, which also meant a strong focus on hiring talent in roles that I didn’t thoroughly understand.

I like to think of myself as a high capacity individual, but also someone who naturally prioritizes. I don’t do work if I don’t think of it as important, and I procrastinate on work that doesn’t need done today. That process means I inevitably end up with more free cycles to focus on things that I think are relevant, rather than spending my cycles in tedious routine (aka endless meetings). That worked for a while, but at some point things stop working. They stop working because not everyone is going to understand your domain as well as you. Not everyone is going to prioritize strategic outcomes over personal outcomes. Not everyone is going to care as much as you (and most founders). They stop working because leaders, especially executives, are no different than any other individual.

This all matters because one of the core responsibilities of being CEO is staffing the leadership team, and its something I came to despise early days. I’ll admit I feel more comfortable evaluating people now, but its especially brutal when you’re smaller and you’re having incompetent investors whisper in your ear that you should fill out the C Suite (Dan never did this, for clarity). That brings me back to the hiring of a CEO. Dan would remind me that the CEO has three key jobs:

  • Ensure there’s enough money in the bank
  • Build a leadership team
  • Set the strategic direction

Money was never the issue, and strategic direction is actually something I think is one of my strengths, but two out of three isn’t enough. I was drained from hiring executives that inevitably didn’t succeed. Even more importantly, by the time I decided to make the change we were far enough along that I could hire a CEO who could lead us to becoming a public company. That meant the possibility of hiring a CEO once, and only once.

So at the end of 2018 I decided I would step down as CEO and bring in a partner.

That process is both more interesting, and less exciting than you might think. If you’ve never been through executive recruiting, generally the way it works is you find a third-party sourcer and you pay them a hefty fee to help you source candidates. They make their entire career by keeping a running log of candidates that are on the market, might be on the market, and managing those relationships. This means you’re paying them for two things:

  1. To source candidates, particularly with a focus on your stage, industry, and other needs
  2. To manage the candidate throughout the process - ensuring that both sides are dialed in (or if one should opt-out)

That means they work for the candidates almost more than they work for you. Thats not exclusively true, and while it might seem like they’re playing both sides, the way they manage these relationships is what’s key to them building that candidate pipeline for you.

The interesting thing about the CEO search is the limited selection of candidates. The pool is fairly constrained, as people who can run a company (particularly at Sentry’s stage in 2019) is fairly small. They’re people who have shown they’re capable of managing an organization of a minimum size, likely with 15-20 years of career experience growing into that possibility. The other aspect that makes this search more exciting than most is just how capable most of these candidates are. In fact, in my search nearly every candidate I talked to was someone you could consider hiring for the role. In fact, I only remember a single candidate who was in no uncertain terms unqualified. That is rare for an executive searching, especially if you’ve had the luxury of looking for something like a marketing leader where success is found less commonly.

I spent a good 9 months on this process end-to-end. It’s a lot like dating - you’re repeatedly trying to find signal in candidates, enough that you’re willing to risk it all and immediately marry this person. Sure, you can get a divorce, but its going to be disgusting, messy, and leave some scars. Its probably not all that different than trying to find a co-founder. I recall when nearing the end of the process, when we had two or three candidates remaining, I just didn’t know how to make the decision on who was best. Remember they all seemed to be good fits.

Eventually one opted out, decided they weren’t ready for the plunge yet (CEO is a big lonely and demanding job after all), so that left two. I had learned early on to trust my gut - or at the very least, when my intuition says its a bad idea, its universally been proven right. In this case we decided to move forward with Milin (who’s still CEO today), almost entirely because of a simple belief I have: the job takes work. He showed the most interest in doing the job. The particular anecdote I give people is that the level of excitement he had was obvious, as he was texting me at 7am and midnight on the same days. When signal is a challenge, you take every little bit you can get.

At the end of 2019 we introduced Milin to the company and I transitioned into the CTO role, focusing on product and engineering, but still being heavily involved in the strategic side of things. Unfortunately for Milin just a few months later Covid began, but thats an entirely different story.

To wrap this up, particularly if you’re a founder and “CEO”, there’s one ask I’d leave you with: lose the hubris and consider your team, your shareholders. Some of the biggest companies in the valley should have had the founder step down. You might be the right person for that job, but you might not be. You also may simply be the right person right now.

Still with me?

A small tangent on executive hiring, as I think many people make similar mistakes to what I did. We wrongfully assume that someone who’s run a function can build a function. We think that someone who’s successfully built a sales team at some other vaguely similar business has any idea how to do it at yours. The reality is that executives are no different than any other role. They’ve developed a different skillset, but the same things that make an individual great at your company, those characteristics and behaviors, they’re what will make that executive a successful leader. They need to be articulate concepts well, inspire others, make decisions based on expertise as well as considered inputs. They need to be high capacity, thoughtful, and able to think critically. Just like any other position you’d hire for, many of the people will not reflect the needs of your company.

If it helps, take this as permission to stop hiring executives externally, and instead give people on your team a shot at the job. Qualifications are moot. Both are risky, but your team likely has developed more expertise, you know their strengths and weaknesses, and unlike many career executives, they’re still excited and driven with opportunity.

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