11 Job Roles Your Startup Doesn’t Need

I made the cardinal sin of joining a startup full-time that I had invested in. I am sure there are situations where it has worked out. However, in my case and in every story I have ever heard from founders, this never resulted in a positive experience.

The problem is power dynamics. Unlike an employee that is granted opinions, an investor has a direct stake in the startup. Not as much as the founders, but enough to subtly change how they engage each other. Think of it this way, if it does not work out, it’s not so easy to fire the investor or the founder.

This was the situation with one startup I joined after coming on as an angel investor. For over a year we debated and argued until eventually parting ways. The thing that caused the rift was not something I expected though. The founder insisted that I join as the Chief Revenue Officer, or CRO.

Job titles become expectations. This was my concern about the CRO role. We barely had a product, we did not have a clear market, and our sales process was ad hoc. The founder however insisted on building a sales team before we were ready. We spent time hiring and training a sales team, setting up tooling and processes, and running multi-stage campaigns. Unsurprisingly, all this resulted in zero revenue.

In advising startups over the past decade, I have seen plenty of job fads. One of those was the CRO role. It was a period where B2B sales and Sales Development Rep (SDR) teams were hot as startups employed brute force outbound sales tactics for driving revenue growth and sales books like Predictable Revenue^* became must reads for founders.

Startups absolutely should have a CRO running and scaling the sales organization. The question is about timing. When the market, product, messaging, and processes are well-established, it is time to add fuel to the sales motion. But when a startup has not reached product-market fit, having a CRO is pointless. What you need instead are hands-on sales people that can find leads and close deals without any hand holding or established sales practices.

The same goes for many other roles in startups. There is a time and place for these roles, but they are only good investments further along the startup journey such as when a startup has obvious traction and needs to scale. That is when specialized expertise and added people power makes sense.

There is also the tendency to inject “fun” into job roles. I have seen everything from Marketing Ninja to Code Rock Star to the very critical role of Chief Happiness Officer. I knew one founder who referred to himself as Head Waste Basket Emptier. But at least in more serious settings, he wore the CEO role.

Then there are roles that never make sense in a startup at any point of time. While founders will justify the headcount, such hires immediately raise red flags with investors and existing employees. They not only add to the salary load, cutting into your financial runway, it also raises questions about the level of judgment exhibited by the founding team.

What are these roles you should avoid? Since scaling startups tend to operate like smaller enterprises with lots of headcount and specialized roles, I will focus on early-stage startups. Below are the eleven most egregious examples of suspect roles seen on startup teams:

1. Strategists – Whenever I see a “Head of Strategy” or something similar in a startup, I cringe. The MBA crowd are drawn to such roles, but they never add value to the startup because you need people that can do the work, not just think about ideas, build presentations, and speak well.

2. Corporate Development – Should things go well, a startup might become big enough to buy other startups, thus requiring someone that can evaluate and manage the mechanics of M&A. But that’s usually not until raising a Series C or D when the startup wants to accelerate growth and has enough funding to absorb another company.

3. Chief of Staff – Big enterprises often hire people that operate like a quasi-executive to help the actual executives to do their job. While Chiefs of Staff roles will fervently protest they are not executive assistants, they kind of do similar things except with more salary. Regardless, such a role has no place in a startup, a virtual assistant is a better option if you need admin help.

4. VP's & C-Levels – Some founders think giving out titles helps recruit hard to acquire talent and makes the startup look more serious. Neither is the case and usually you will need to top these early hires for more experienced leaders once you become more established. Save the fancy titles till then and stick to more flexible titles like “Head” or “Director”.

5. Product Managers – Someone with deep product skills could help less experienced founders with more disciplined approaches to building product. However, founders are the owners of product vision. Because of this, PM’s brought on too early rarely survive as they clash with the founders on executing the product vision.

6. Growth Hacker – There was a trend some time ago of startups hiring a “growth” person. Growth hacking eventually just became a bunch of over-used tactics to juice acquisition as opposed to leading to sustainable growth. But the reality is that everyone in a startup should be focused on growth, and the best startup teams work across functions from engineering to marketing to product to drive experiments which uncover and optimize engagement and growth.

7. Brand Marketers – Early-stage marketing should focus on three things. One, hone the message to resonate with target markets and personas. Two, build assets for driving awareness such as web & social content and customer pitch decks. Three, create the lead generation engine so sellers have deals to work on. Anything “brand” related can wait until you are big enough to be an actual brand.

8. Partner Managers – Establishing partnerships when you do not have product-market fit is a waste. There are exceptions where a startup is building within an ecosystem like a value-add solution for cloud infrastructure customers. Outside of those exceptions though, a partner manager is not going to yield a lot of success until you have a lot more customers.

9. Head of Architecture / DevOps / SRE – These are key roles for startups once they reach scale, but are overhead when you need to operate a lean engineering team early on. The codebase and architecture are not complex enough to require specialization, plus most startups do not have enough users where scalability and performance are a concern.

10. Office Manager / Receptionist – There’s a tipping point where a startup needs to move from co-working to their own office. Even then, it makes no sense to hire a person just for one task. Hire an operations person instead that can take on several tasks such as HR and/or finance as well as attend to office needs.

11. Fundraising Advisors – Normally this is a consulting role, but there are instances when startups have hired a full-time fundraising person. This is always a mistake. Investors are betting on the founders and will not tolerate speaking to an intermediary. Founders need to own this work, from finding investors, to outreach, to pitching, to negotiating.

The bottom-line is that startups should be exceedingly careful when hiring and to be clear on what they are hiring for. Having just exited the ZIRP-era (zero-interest rate period) that fueled unhinged spending and hiring, startups are finally getting back to the values of frugality and operating lean.

What are your thoughts on these roles and are there valid exceptions to what I shared? Did you have positive or negative experiences hiring the above roles in your startup?

Mark

*We no longer recommend this book given the tactics are dated and ineffective for current B2B selling practices

Banking is something that rarely ever makes the startup news. Until that is when startups get blindsided by unexpected events like last year's bank runs at SVB and First Republic.

The most recent banking controversy occurred this past week when some customers of a Mercury got suddenly notified that their accounts would be closed within the week. Quite a few turned to Twitter to vent their frustrations on having a bank they trusted turn them away without any explanation.

Eventually the CEO of Mercury, Immad Akhund, spoke publicly on the matter to address the growing backlash. Short story is that accounts based in several countries would not longer be able to bank with Mercury, including Croatia, Nigeria, Pakistan, Philippines, and Ukraine.

I greatly sympathize with the founders that got caught having their businesses upended and put at risk without a bank. Without a bank, it is impossible to accept payments, pay invoices, process payroll, etc. And while founders are scrambling to find another bank, their startups grind to a halt.

Mercury absolutely flubbed their response and handling of the situation. However they cannot be completely blamed for the situation. Being a fintech, they are under the same scrutiny as any regulated bank in terms of Anti-Money Laundering (AML) and fraud compliance. Thus any startups domiciled in any sanctioned country or countries in the gray area add to the scrutiny and compliance oversight. Should regulators find or suspect any violations, the cost for penalties of non-compliance would cause Mercury to go under, affecting all customers.

Our advice mirrors what we recommended during the SVB crisis. Startups should have at least two bank accounts. Yes this may add cost and complexity, but it will provide cover should any unforeseen circumstances cause a bank collapse or account closure due to sanctions or other reasons.

Well I decided to keep the newsletter going during the summer break, mostly because there is simply too many ideas in my head that I need to get out 😂

The latest adventure happened to be speaking as one of the keynotes for the AWS Startup Day during AWS Summit Taiwan 2024 in Taipei. It was great to see all the interest around Generative AI among the startup community and developers that attended the event. Taiwan has one of the highest concentrations of STEM educated talent in the world and many are now moving beyond hardware to building software based products. I am looking forward to returning to Taiwan again to meet more startup founders!

This will most likely be the last Community entry though till I am back in full swing this fall with more events and travels in the works. Enjoy the summer and chat again next week!