How to Hire a CEO (According to Vinod Khosla)
How to Hire a CEO:
1. Define the Ideal Candidate Through Real Examples
Instead of writing a spec, which generally looks like god in hard to meet form, start with a dozen top resumes that you can annotate. Highlight positive and negative experiences and characteristics to create a spec based on realistic candidates, and then hand these markups to your recruiter.
2. Choose the Right Search Firm
Smaller search firms often have a better network and instinct for entrepreneurial candidates than large firms that are used to staffing F500 companies. I have generally found that their instincts for entrepreneurial talent can be off. Smaller firms are more attuned to the needs of startups and growth-stage companies.
3. The Technical Athlete, Not the “Expert”
My bias is to find someone who hasn’t spent too much time in the industry to which the startup belongs. Some time is helpful, but too much leads to sclerosis. For example, when hiring for a medical device business, avoid candidates with too much time in medical devices. But the candidate should have experience working in complex engineering outside of medtech. The latter, coupled with deep technical expertise and just a small dose of medtech experience is likely to be more innovative and faster-moving.
There are very few areas where somebody innovated in an area where they’ve spent their life deeply entrenched. In the 40 years in which I’ve participated in disruptive innovation, I actually can’t think of one example. That’s an unusual kind of statement, and I’ve looked hard. Were space launches disrupted by Airbus, Lockheed and Boeing? No. It was SpaceX and Rocket Lab. All that activity is coming from people who weren’t in the business.
4. The Golden Goose not the Golden Egg
Prioritize finding someone who is the absolute best team builder and a good leader. That will give you the agility to navigate anything from complex engineering problems to an FDA process. A great team builder who can execute the job is more valuable than someone with narrow expertise who knows how to execute that particular job. The ability to assemble a specialized team is crucial for complex projects. And with the frequency of changing plans in a startup, someone who can constantly adapt and build for the next S-curve will pay dividends over someone whose “expertise” and “experience” handles the issue at present.
With regard to more technically complex projects, especially one that spans a multitude of different types of engineering, a CEO with a diversity of technical skill is required to make judgment calls, but again, the most valuable skill set will be in building various teams in specialized domains.
5. Growth Velocity Over Experience
When considering a first-time CEO, the most crucial factors for me are their quality of thinking and their ability to grow rapidly. It’s challenging to define this in a job specification, but I prioritize finding someone who can manage change, adapt to new situations, and build a great team over domain expertise. I prefer individuals who can quickly learn and grow, rather than those with extensive CEO experience, especially in new and evolving fields.
For example, while domain expertise is important for getting a device to FDA approval, I might prioritize someone who demonstrates rapid learning and critical thinking and who can hire the domain expert. Experience can mostly be traded off for these qualities. A candidate who is a great thinker, learner, and team builder is ideal for me. Leadership, goal setting, and understanding the technical space are key, as these are harder to learn from scratch.
I am open to giving someone a chance to grow into the role, even if they may not be the definitive long-term CEO. But they’d better be curious, a broad thinker, a first principle thinker, action oriented, a great recruiter and able to lead with vision…
6. Synthesize Diverse Information
The second important aspect is aligning the expectations of all stakeholders involved. For a company creating an artificial womb for example, stakeholders on the science, business, and impact front may include the OB-GYN, neonatologist, engineers, mother, child, and surgeon. The CEO of such a company must integrate feedback and relay it effectively to the relevant team members to both understand each of those stakeholder’s “workflows” and how the tech fits in and solves their problem. Failure to do so will result in critical requirements being omitted from the project. A CEO must gain a deep understanding of all involved constituents; integrating and addressing diverse needs is a must. In the early stages, sufficient technical/scientific background is often essential to be able to exercise judgment on hard technical/scientific choices.
7. Prioritize Effectively and Make Trade-offs Wisely
Smart individuals can quickly figure out a thorny issue if they can pare it down into its structural components, prioritize, and make decisions effectively based on the identified fulcrums. Thinking clearly and critically is often more important than experience in new technical areas.
8. Raise Funds
Even at the development stage, it’s important to find a candidate who can raise funds effectively. This ability can be crucial for sustaining and growing a company. Selling investors, employees, and partners is also a critical skill.