There's only one real answer. It's when you're ready to be a big company. But not just because you want to be a big company.
Heavy hitters (i.e. former executives of big companies) bring big company expectations. They expect to hire a big team. They expect that your product is ready to scale, and in B2B, ready to be packaged and sold down a channel. They expect that you know how to sell your product in a repeatable way, a way they can copy, optimize, and teach to new hires. They expect to move at a big company pace, and expect you have some semblance of big company processes.
These people, in general, do not know how to, and do not want to, live the kind of startup life you've been living -- the hours, the apparent chaos, the extreme frugality, the wearing of many hats. They won't love your product like you do. This will be a job for them.
Remember that they're almost always from big companies, but much less often did they help build those companies at the critical juncture -- the time before everything was working. The time before it was clear the company would succeed if it could just expand on what it was already doing.
These heavy hitters mostly expect that your company already works, fundamentally, and that you're hiring them to do more of it. If that doesn't sound like your company, you're not ready yet.
And if you hire these folks before you're ready, it will probably destroy the company. It's a one-way function. By their nature, they'll drive out your early hires and scale your costs. If your revenues don't scale comparably -- because you didn't actually have product/market fit -- then those heavy hitters and the teams they brought on will leave when they see the writing on the wall. Leaving you, alone, back at zero.
To become a senior executive at a large company you have no choice but to stop doing real work and devote your time 100% to internal politics, because you are competing for a limited number of promotions with people who will do that. The real work skills of a “heavy hitter” atrophied long ago... and all the politics of their former employer won’t help them in their new job unless they can import all their cronies too... basically there is NO reason to ever hire one of these types.
Yes, that's basically the same as having a lot of cronies. But alas the market is what it is, it pays off to sometimes hire one of these. (Look how Google hired their CFO a few years ago.)
I have seen that happen with a $100 million s/w company. It was very depressing. Not only where the people they brought in thinking of themselves as “heavy hitters”. They where also poor at their jobs. They wouldn’t have done particularly well even if the company was ready to scale. That of course didn’t help. It was sad.
What kind of people would you search for to retain to help sniff out red flags the board might miss in situations like this? I know that it’s in the board’s job description, but who can you hire as a sanity check for such a big decision?
Someone who has done it before at slightly smaller scale. To grow a business from $50m to $200m in five years hire someone who grew a division from $10m to $50m in five years, ideally at a company where not every division grew at that rate.
Was it a company valued at $100M, or a company generating $100M in revenue? My guess would be the former - usually if the founding team has figured out how to reach $100M revenue, they're smart enough to avoid hiring the kinds of idiots you're describing.
At $100M valuation however, it happens all the time. I've seen it happen too, and it's very sad to watch.
$100M valuation means ”we have four founders with PhDs from MIT, and our product uses both blockchain and ML”. Valuations are almost meaningless nowadays, with liquidation preferences and other tricks.
This. Random useless blockchain projects have valuations in billions on paper these days. The only think that matters is how much revenue your company is doing, valuations are completely random based on buzzwords these days.
One of you is saying that valuations are meaningless because companies will accept punishing terms in exchange for a face-saving valuation. The other is saying that valuations are meaningless because investors are dumb and will throw money at buzzwords.
So which is it? Are valuations meaningless because it's too hard to raise money, or too easy?
And as a follow-up question: how does this contribute to the conversation about "heavy hitters"?
The company made $100M/Year in revenue. Unfortunately I think the founders felt they where in over their heads or got bored and where convinced to take on a new CEO. I met him, he was clearly not a good choice in my view. I have no idea how he was selected. He brought in people from his old company. It was downhill from there.
This is a really good summary of how it tends to play out in the real world.
In particular it is the readiness aspect. When time has come to actually think like a business, and be less of a passionate founder of your own little baby.
Lastly, on the last point, I'd offer a slightly different pov in that these people will drive out cost that you might have overlooked, or have some sort of personal opinion on. These people will be ruthless on empty costs and you need to be okay with that.
In your opinion, where are the guys who did help build other companies during critical junctures? Do all of them stay with the companies they've helped build? I'm sure they're senior level too, perhaps being described with the same keywords (and thus indistinguishable) from the "carry-on heavy-hitters" you described?
Heavy hitters (i.e. former executives of big companies) bring big company expectations. They expect to hire a big team. They expect that your product is ready to scale, and in B2B, ready to be packaged and sold down a channel. They expect that you know how to sell your product in a repeatable way, a way they can copy, optimize, and teach to new hires. They expect to move at a big company pace, and expect you have some semblance of big company processes.
These people, in general, do not know how to, and do not want to, live the kind of startup life you've been living -- the hours, the apparent chaos, the extreme frugality, the wearing of many hats. They won't love your product like you do. This will be a job for them.
Remember that they're almost always from big companies, but much less often did they help build those companies at the critical juncture -- the time before everything was working. The time before it was clear the company would succeed if it could just expand on what it was already doing.
These heavy hitters mostly expect that your company already works, fundamentally, and that you're hiring them to do more of it. If that doesn't sound like your company, you're not ready yet.
And if you hire these folks before you're ready, it will probably destroy the company. It's a one-way function. By their nature, they'll drive out your early hires and scale your costs. If your revenues don't scale comparably -- because you didn't actually have product/market fit -- then those heavy hitters and the teams they brought on will leave when they see the writing on the wall. Leaving you, alone, back at zero.