Should the Computer Science Guy Be CEO?

compuguy84 asks: "I'm a Computer Science major. A Finance Major friend and I are starting a business based on an innovative idea I had. I came up with the concept and developed the overall model we would use. He loved it, and we've been working on our business plan ever since. We've both donated our respective expertise, covered major ground, and agreed from the start that everything will be split 50-50 (ownership, power, etc). Unfortunately, the time has come to incorporate, and potential investors have advised against assigning Co-CEO's. So who should be the CEO? Should the Finance Major get the job based solely on his Business knowledge, or should the Computer Science guy get the job because it was his idea? We've both have shown ourselves to be savvy business folks, but I don't have the 'schoolin'. All signs so far point to giving him the job, but I can't shake the feeling I'm getting robbed. If it was my idea, shouldn't I call the shots at the end of the day? Has anyone been through this? What did you do?"

You

[invisik]

I think you should become the CEO as they seem to be closer to the ideas and workings of the company (the "visionary"), whereas the Financial types hammer the books and tell you how much you can spend on your ideas (not as irreplacable as you are). There's no reason salaries and perks can't be similar. Finally, it often doesn't matter what the title is, as long as things are working out. But I still think it should be you.

-m

Re:There are plenty of shots to go around

[ePhil_One]

You're going to have enough on your hands just making sure that your idea gets implemented correctly. Let someone else handle the issues of licensing, stocks, quarterly filings and investor reports. Do what you each do best. Nonsense. This was his idea, he needs to be the CEO because he has had the strategic vision to see the viability of the product. Make the other guy CFO and have him deal with the Financial matters you mention like a CFO should. A company needs a CEO and a CFO, the CEO will not have time to do the job of the CFO too. Mind you, the CEO will also not have time to do the work of a CTO, and pretty soon he's going to have to throw off that part of his job.

Re:There are plenty of shots to go around

[sumdumass]

Your aproach sounds good. However I think something should be done to ensure the CEOs interest follows the line of thought that the company was founded with. This might be somethign as simple as limiting the scope of control the CEO would effectivly have without advice and maybe consent from you. It would be impossible to expect that every decision be floated first but maybe the ones costing large sums of money like switching supliers to get one thing cheaper but other things will cost more or taking loans out that could potentialy bankrupt the company before it is ready to perform.

This would be like as you suggested with the exception of the CEO having a duty to involve the other person on major decisions. I guess if there is a disagreement, something could also be implemented to fix that too. I was involved with a small company and was one of the three owners. I took more of a behind the sceens employee type role. This is how we did it except we had three people and there wasn't any stalmates. We set it so anythign costing over $5,000 required informing all of us and the consent of at least one of us. This number grew as the business did. Eventualy I cashed out to pursue another venture but it continued on for another 5 years or so before it was bought up by one of our local competitors who still runs the company as a seperate entity. (wish I had stayed for that:)

Re:Who has more business sense?

[jthuck]

I couldn't disagree more. The difference between 51/49 and 50/50 isn't 2%; it might as well be 99/1. My father started a business 51/49, and at one point "the other guy", the one with 51%, decided to vote my father off the board with his majority stake. The board then voted to fire him. At that point he held 49% of a private company where he had no say.

It all worked out in the end; my father started his own business (100/0 :) and within a month already had most of his customers begging him to do work.

You need no stinking business expert!

[JollyFinn]

Lets make this straight, what needs to be done in the business at first.
You need to develope the thing.
2nd you need to sell the thing.
3rd you need to do some paper work.
4th discuss with investors if you cannot do above well without pouring more money to it.

The 2nd part happens after most important risks related to business have already taken. And 3rd part isn't big deal until you have your start hiring people. 4th part is only important if you plan to hire or cannot sustain your living entire developement time.
So basicly if your thing isn't ready nor the business person do not add value to your business so you are already getting ripped off by giving him 50% of your business. And if its ready the business person should invest the money atleast equal to 5 times the salary you would of taken when developing the thing, in order to match your investment on the business.

I'd say read the Eric Sink:s articles beginning here. They teach part of the business part that geeks need to know. Basicly business part is easy if you need to know it. And computer guy is far better in the helm of software company than a business person. Since software person understands whats possible, and what not and proper technical trade offs.

Of course if he can do developement too and his domain expertice is needed for making the product then it wouldn't be obvious who should get bigger part. Oh and 50% /50% deal someone ALWAYS gets ripped off since people don't invest equal amounts of time to the business.

http://software.ericsink.com/bos/Geeks_Rule.html [ericsink.com]

What are the roles?

[FuzzyDaddy]

I work for a small company (~20 employees) which was founded by a PhD doing research on DoD SBIR contracts. He was the President (we had no CEO) for many years. After a few years, some of those research ideas panned out into products which we needed to develop and sell. The founder realized that there was too much work to do, and we brought in a CEO. This was a guy he knew well (he'd been on the board of the company for a long time). There is a lot of work the CEO deals with that the founder is happy to be rid of - marketing, scheduling, setting priorities. Most of the important decisions are joint decisions anyway, but the CEO is responsible for pushing to get the decisions made. The founder has gone from 90 hour weeks to 50 hour weeks, and seems much happier for it. He still is involved in fundraising, hiring, etc, but it's not all on him.

Honestly, I think it's a question of both what you want to do and what you think would most likely make the company succeed. Take and guard your ownership stake. Then stick yourself where you think you'll be most valuable. If the company can't survive without you, that's the value that you have. Just make clear from the begining that you intend the company to be run by consensus, not CEO fiat. If you've got a partner who is doing work that you can't or don't want to do but which needs to get done, that's a good thing. A CEO isn't all powerful, and if you two agree on that, I think you can be very happy and effective as a CTO.