Dear SaaStr: 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.
Why?
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’ve got to recruit a much bigger, and more expensive, engineering team in many cases. Unless again, you have a true CTO as well, that is also leading the company.
There are exceptions, many of them. But usually there is an amazing CTO from Day 1. And often. Bill Gates coded, Jobs didn’t. But — Jobs had Woz. And “Salesperson CEOs” burn a lot more money getting to $1m and $5m-$10m ARR.
After you hit scale, maybe it doesn’t really matter as much. Maybe. But still, I’ve found the SaaS startups without a strong technical background in the founders just … iterate more slowly.
If either the CEO or the CTO wasn’t at one point a great engineer or at least a super-smart hacker, they just don’t know how to iterate quickly. How to be super agile. And the super agile startups just pull ahead as the years go on.
I look at the 25+ seed investments I’ve done. The unicorns and decacorns? All but one run by ex-engineers as CEOs, or, business CEOs that have a true CTO co-founder. And the one that wasn’t, recruiting an amazing CPO in the first year to address just this issue. It’s just too tough otherwise in my experience.
If nothing else, trust me here. The #1 thing “business founders” tell me that started without a great CTO was how much radically harder it was than they ever thought to build great software. So, so much harder. I’d wait to start until you have one.
