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Entrepreneurship

Why your chief executive should wear a hoodie

In the early days of a startup, once your company achieved scale, the technical founder would step back to be replaced with a “professional chief executive”.

This used to be commonplace; everyone from Cisco to eBay went through the management team merry-go-round.

But the tide is turning and there is a growing acceptance that the guy in the hoodie who wrote the code has a unique set of skills that can translate into business success.

RUTHLESS OBSESSION

First, such people are relentlessly fussy about the quality of their products and services. Show me an engineer who is happy to cut corners and I will show you a liar.

Years spent ruthlessly obsessing about the position of a button instils a strong sense of perfectionism.

In a transient world where customer loyalty is everything, meticulous product development is all. All the marketing money in the world cannot replace a poorly built product or service.

RELENTLESS TINKERING

This leads into the second reason why technical co-founders are valuable: we are never happy to sit still.

In a world where business cycles are shortening all the time, if the guy at the top isn’t a relentless tinkerer, then you will be left behind.

This is something that is increasingly true across the board, not just in the tech industry.

The abundance of “labs” and “innovation centres” in everything from the car to the pharma industry is a sign of this.

A willingness to play around with business models and improve legacy processes, often using technical skills as an instigating factor, is tearing down the walls at companies that have dominated for years.

It’s certainly not an overstatement to say that an engineer with a curious mind can build something that in a few years will be eating everyone’s lunch.

Look at Travis Kalanick at Uber, a software engineer sitting atop a six-year-old company that is rewriting all kinds of markets.

This willingness to experiment is a personality trait hard-wired into technical professionals.

CALCULATED RISK

A calculated approach to evaluating risk – and the associated decision-making – is the third area where a technical background can really help a chief executive.

Years of basing decisions on data and gradually iterating products through analytics removes the emotional response.

With more information available to management teams nowadays, this ingrained problem-solving instinct can make the difference between a successful venture and a costly one.

Of course, it’s not all about perfectly calculated business decisions. I will happily hold my hand up to the fact that there are many areas where those with a non-technical background are absolutely crucial.

Until I figure out how to automate the creative and interpersonal skills required by sales and marketing, for example, I am happy to leave this to a specialist team!

This raises an important point, however. I am a strong believer in the benefits of having a technical co-founder in the top spot, as their innate abilities really make a difference.

But in order to realise this value, it is vital to collaborate closely with those who have complementary skills. Every hoodie needs a suit, each Steve Jobs needs a Steve Wozniak.

Note: This is a byline I wrote for City A.M.