There are a few startups that have been able to grow rapidly with a Co-CEO structure. A good example of this could be Warby Parker where you see two graduates from Wharton Business School with business backgrounds calling the shots as you can read here.
At a larger scale, there have been other successful cases in bigger corporations such as Oracle, Tiffany & Co, or Chipotle.
There are several VCs, such as Mark Suster, that have expressed some skepticism around this structure, as they want a leader in the company that always has the last say from a decision making perspective. Having two people decide, when there is a disagreement on direction or vision, makes it complicated from an execution perspective.
With the reasons and examples above, what are your thoughts on the Co-CEO structure? Is it a good or a bad idea for a potential high growth company that is looking to scale rapidly in a 5 to 7 year horizon? Are there any pitfalls from implementing this structure?
One huge example of where co-CEOs failed spectacularly: BlackBerry.
In general, it is not a good idea to have Co-CEOs. In an early-stage startup especially, it is important to have defined roles to avoid overlapping functions due to limited resources and the importance of a guided direction. This means one "head" who will represent the company to investors, partners, and employees, and to make the final decision.
Titles do not necessarily mean the actual functions in terms of execution are exclusively siphoned. An alternative to the Co-CEO structure is to have a CEO whose role is "outward"-facing, and a COO who focuses "inward". In more generic terms, the CEO would deal with investors, customers, and partners, while the COO deals with the inter-workings to run the company more effectively and efficiently.
No, no and no. You must recognize the difference between what a CEO does and what a COO does. That is likely the better construct. The CEO focuses on the long term and removing road blocks, which typically includes focusing on funding. The COO keeps the ship moving in the right direction and makes sure that everyone is doing everything needed to achieve the strategy. If you have two CEO types or two COO types, there are bound to be problems. This isn't about control, it is about getting the right things done at the right time.
In the public markets, shared leadership is a red flag to short the stock. In my experience as an entrepreneur and coach, it's more a matter of EGO than a rational business decision. I had partner (50/50) years ago who insisted on the title President. To assuage him, I adopted the title of Principal and have used it ever since. But with all the challenges startups face, you have to ask why you would spent an ounce of energy on such puffery.
You raised the biggest question for me: What happens when the two equal CEO's disagree?
Also, either they are redundant (both doing the same thing) or it seems like they could divide an conquer and each take charge of one area.
Does it make any sense to carve out a niche for each one? (maybe CTO and CEO, etc.)?
Do they both have competencies and want to work on the same areas?
No, it is not. The question you need to ask yourself is Why Do I Need a Co-CEO.
It's not a good idea in my viewpoint. Early on it can mean that the CEO alone isn't strong enough to investors. Confusion can happen around who makes the final calls.
You're asking the VCs to deal with two of you. DO NOT add an extra burden to VCs without a strong benefit. The VCs have other startups competing for their time.
Well it depends on the scenario, first thing you should be asking yourself is why would you have co CEOs i mean there should be a 100% need else you should lead it yourself without any CO.
Even if you need CO, start alone, try to get things moving before making this decision. onces you feel that you lack few things which you will only then think about partners or anything.
It's not really matter who is carrying which title if both founding partners have equal shares (50/50) of the company because both will have the same weight when it comes to decision making anyway.
For public appearance they can be Co-CEOs but they may play different roles on leading and overseeing day-to-day operations depending on their expertise and competency, which most startup founders do.
The Founder Dilemmas's book by Noam Wasserman may be a goodread if you want to know more about the pitfalls of bringing in co-founders..