SUB CATEGORIES OF Founders

A founder CEO is a startup’s founder who also serves as the startup’s CEO. There are examples of many successful founder CEOs and, from the numbers, more stories of founders who have voluntarily or involuntarily passed the baton to a new CEO (Sergey and Larry to Eric Schmidt at Google). Sometimes these transitions are forced upon startups by investors, which does not necessarily mean the founders would not have been successful as CEOs over time.

Ben Horowitz of the prominent venture capital firm, Andreessen Horowitz, is a big believer in the founder CEO and founder CEOs is one of the components of the firm’s investment philosophy. He gives the following list of successful founder CEOs. We have not independently verified whether all of these are founder CEOs, but we trust Ben’s instincts and the list if certainly impressive. Ben’s take is that founder CEOs can be developed, and he has a track record to support his view. Here is Ben’s list:

  • Acer—Stan Shih
  • Adobe—John Warnock
  • Amazon – Jeff Bezos
  • AMD—Jerry Sanders III
  • Apple – Steve Jobs
  • DEC—Ken Olsen
  • Dell—Michael Dell
  • EA—Trip Hawkins
  • EDS —Ross Perot
  • Hewlett-Packard—Dave Packard
  • IBM—Thomas Watson, Sr. (*)
  • Intel—Andy Grove (*)
  • Intuit—Scott Cook
  • Microsoft —Bill Gates
  • Motorola—Paul Galvin
  • nVidia—Jen-Hsun Huang
  • Oracle—Larry Ellison
  • Peoplesoft—Dave Duffield
  • Salesforce.com—Marc Benioff
  • Seagate—Al Shugart
  • Siebel—Tom Siebel
  • Sony—Akio Morita
  • Sun—Scott McNeely
  • VMware—Diane Greene

The individuals (*) are not technically co-founders, but were part of the initial team.

Founder CEOs also run Facebook (Zuck), Fusion-io (David Flynn), Twitter (Evan Williams) and Workday (Dave Duffield and Aneel Bhusri) and Fusion-io (David Flynn).

In our view, many times the skills that make a good founder are not the skills of an effective CEO. A founder needs the boldness to start a company most others would never start, to accept and move past repeated rejection and overcome the many obstacles he or she faces. He or she needs to be able to innovate and develop new ideas and industries. A non-founder CEO is often better at managing a bigger team and making sure different parts of the startup work together cohesively, communicating to a large group and allowing autonomy. Non-founder CEOs are often better at stepping back and questioning early assumptions of the startup. Founder CEOs are more defensive of earlier decisions because most of the decisions were made by them.If a startup does decide to transition from a founder CEO to a non-founder CEO, it is often better to make the transition over time with a clear plan. There tends to be resentment and confusion in the organization if the transition is quick. The best situation is for the two individuals to work together, assuming the founder cooperates and the CEO is open-minded. Google is the perfect example of success. Eric was clearly the CEO of Google and Sergey and Larry were co-presidents of sorts.Some VCs push the founder out of startups if a new CEO is brought in because many founders undercut the new CEO. In our view, that is not ideal unless the founder is not willing to play ball with the new CEO.