Before I ask, I just finished my undergrad degree in CS, so I have little or no experience in these things. So please answer accordingly!
I had an idea for a startup and I discussed it with a few friends who are not only elder to me, but employed in a job professionally. Since I have absolutely no experience with web programming, I had to share the idea; I would have done it otherwise also, but given that these guys were professionals in their field, I decided it best to involve them (for development and guidance)
We have already worked out the basic details and the work has started, however there is an issue which bothers me. How do we deal with titles in our organization?
Since I gave the idea initially and involved the other guys later, how to sort out the roles everyone plays?
I am interested in understanding this from a personal experience perspective. Since I gave the idea, should I assume that I will lead or I am being pompous? After all, the idea counts right?
Again, I have no understanding of these things. I have no problem assuming a lesser role, sure, the contribution of these guys is invaluable, but I just wanted to arrive at a conclusion without hurting the sentiments of everyone involved.
All/ any inputs will be appreciated.
Honestly, I suggest you not to spend too much time on titles.
First, because it will take some time (one year, let's say) to "shape" your company. In that time you'll probably find other people to join your startup, or advisors.
Second, because many investors don't really see very well people assuming titles in a 3-people startups. It sounds presumptuous, and maybe it is.
So call yourself co-founders and move on.
The important thing to focus now is to agree on shareholding. I personally like when all the co-founders hold equal shares, but you have to make sure everybody is committed to put all the needed effort in the company
By default, I'd say in general you're equal partners in a venture unless you've established some other agreement - which from the sound of things, you haven't. So if that isn't your objective, you need to address this pretty soon.
And you need to think forward. "Work has started," and presumably there's more work ahead to turn this into a successful business. What is each of you willing and able to offer, in time, cash, contacts, experience, expertise etc? Do you constitute a full team? If not, will you want to hire people? Or will you want to bring further people in on a similar basis?
I'd view addressing this as an important team activity. I'd be surprised if the others don't give you credit for having the idea and galvanising the team - but there's no hard and fast rule that says the person with the idea leads, holds the lion's share, or anything else. In my experience, initial ideas (my own included) are often more of an indication of direction than an entire executable concept and plan. Ideas develop as they're being implemented - and they're often best viewed as team property.
So find a time to discuss the future. Find out where each of you thinks you're heading, and where each person sees themselves fitting in. See if there's an emerging structure that works, or if there are gaps or uncomfortable overlaps.
And get something on paper that you can all sign, as soon as you can. When you all know where you stand, you'll be better placed to deal with future challenges and opportunities, and less likely to fall out over different expectations, interpretations and memories of conversations.
Good luck. I hope this turns out a great success!
It's seems very weird talking to a company that consists of only three people who have the titles CEO, CFO and CTO. I would rather deal with titles like 'Director', 'Co-founder: Marketing', 'Co-founder: Development' and 'Co-founder: Financials' (these are titles I intend to use for my own startup - I want the title of 'Co-founder: Development', that's what I do). If the people involved are not founders the prefix could simply be 'Manager' (eg: 'Manager: Financials' for your accountant).
A startup needs to be run like a benevolent dictatorship - one person must have the ability to make the final decisions (after processing all advice) that all other members of the startup have to abide by. Unlike a dictatorship you can always leave if you are not happy with the outcomes. I think investors would much rather see a clear dissemination of responsibilities than cool titles.
When you have a small organisation you can't pretend you are something like IBM, Microsoft or Enron - the terms CEO, CFO and CTO have no meaning in your context (they certainly don't have the context implied by larger organisations). In larger corporations titles imply income (you would expect that the CEO gets more money than the C[FT]O), in a startup that would not necessarily be the case.
In my first startup I had the role of CTO and then progressed to CEO (as co-founders left). Apart from the founders we had two part time employees who managed the shopfront and the phones - it seemed a bit ridiculous. When working for another startup I had the title of 'Manager - Research & Development', there were three other developers and my boss (Director - Research & Development) could bypass my instructions at any time. To me that is more a 'Team Lead' position than anything else. It looked good on the business card (another extraneous expenditure for a startup) but didn't really mean anything.
I guess what I'm trying to say is that titles are not all that important, when you assign them make sure they have meaning related to the roles that people play without pretending you are the next big Fortune 100 company.
Sometimes a title like CEO can get you in trouble. You would be suprised how many calls you get looking for a CEO, CFO, CRE, etc, all looking to sell soemthing.
I like director titles:
Director of BD, Director OF QE, Director of Customer Service, etc.
With a director title (even if you are the big cheese), you can always deferr big decisions and say that you have to dicuss them with your board, and CEO. Gives you an out, or buys time for high pressure sales. A director title earns respect, but is not cocky.
I also like the title of CVO.
How about just "Co-Founder", keep it simple. If you are still working in your idea/product, do not spend too much time on something like "titles" when you are still trying to figure it out your startup.
You can also look at this other question and answers for guidance:
What's your title in your little startup? And this article by the guys over at VentureBeat is really good as well:
Among yourselves, I agree with Filippo Diotalevi, who said not to worry about this early on.
However, if you incorporate in the US, your state's laws will require certain titles to be filled in the company - typically a board of directors, plus officers like president, secretary, and treasurer. Each of these positions has specific legal responsibilities which must be executed correctly to do things like open a bank account for the company. For more information, check out a book or two on incorporating in your state; Nolo Press has some good ones.
I've co-founded three startups and held positions like "President", "CTO", and "Chairman of the Board". The titles sound cool, but in reality, they mostly land you with extra work. So don't just take a title because you like it, make sure you actually understand the job that goes with it and are prepared to do it.
Several topics raised in this question have has been discussed in the past:
• Deciding titles in startups? • Referring to one-man-company: use “we” or “I”? • How do I start a sole proprietorship and when does it start?
Job titles can / should be whatever is required to impress potential customers / shareholders / banks / etc. If somebody wants to be called supreme master of the universe rather than plain webmaster on their business card, it doesn't make a great deal of difference.
The important point, as @Pierre and @Clint alluded to, is defined roles and responsibilities. You want to ensure that things get done, and that people have the authority to do what they need to do, and know who has to approve/agree what.
This is separate from any ownership / shareholding / partnership agreements, which you will also need to sort out.
Good luck with he venture.
What kind of company is it ?
Will it become a public company in the future ?
Founder & CEO is basically do.
IF you want to escape tax,
Make your dad as chairman of the business and yourself be the "Managing director" so that you can have your salary and save tax on it one way, and you can trust your father on the second way.
It also very important as to who is financing the new start up. I that role is played by you, then you get the right to be a leader by default. Otherwise, you all end up being equals.
Don't worry about the titles so much. A larger concern for you should be how you deal with disagreements. If all of you consider your self as equals that compromises can become very hard to achieve sometimes. It ends up delaying many vital decisions until a consensus is met.
A friend started a company a couple years back but it took a long time for it to get going for he had communication problems with his partner who was supposed to be in charge of finance and accounts. You can also look at UN for that matter.
Take up title other than partners after you each have more than a couple employees under you. You don't need them otherwise.
Jan, After so many answers focused on the question of titles rather than your proper role, I fear this essential and much more important part of your question may have been lost.
You've expressed that this is your idea and is your baby. Much like a family, it's easy to nobly say at the outset that the only thing that matters is that this baby has every possible opportunity to grow up healthy and successful. The truth is, who has what say is of the utmost importance as time goes on. The entire direction of the company, and your role as founder, can be completely lost or mishandled in such a way that your baby is lost to others. It's a painful thing to watch and worse to experience. While titles can define these roles, they aren't really what I think you're after.
I'd suggest you secure a neutral 3rd party to sit down with the management team ASAP to help you define your roles. My best advice would be an attorney equally trusted by all of the stakeholders. This process has the potential to give you all well defined roles and expectations that have preserve and protect your startup from all sorts of potentially explosive issues down the road.
If you're looking for a laugh...I suggest this site - http://www.bullshitjob.com/title/ And my serious answer: In my experience, job titles are pointless for the founding team. You're all going to be working so much and be so strapped for resources that you can't say, "That's not in my job description." Everyone does everything when it's crunch time.
IF you NEED titles...Make whoever is going to take care of the business end (incorporating, accounting, etc) CEO, make the server person CTO, and make the UX/UI person CDO (Chief Designer Officer) or CUXO (Chief User Experience Officer). These are mostly for the outside world. Everyone should be in charge of customer support too.
Here's a great article from OnStartups about the founding team's magical mix. It's a great read for early web startups.
http://onstartups.com/tabid/3339/bid/13808/The-Magical-Founding-Team-Mix-For-Web-Startups.aspx GOOD LUCK!