Why BigCo Alums Don’t Work Out as Employees

Earlier than Phase 4 (~$35-40M), there is not a lot of value beyond pure administration that you will get from an immediate alumnus of a public company as a functional leader. I’m talking about someone who just left a $1B+ company deep into its mature, late stage of development. 

The longer they were there the more of a problem they will pose for founders and the broader team. They want big titles like CMO or CSO, before the business merits an org chart that requires this level of leadership.

The primary issue with these alums is that they insist on an absurd bargain coming in to a small company – corporate equivalent salaries plus equity plus staff and a lot of budget. In fact, fighting for budget and staff is their number one skill, if they have experienced promotions inside public firms. This is their instinct. Politics.

Their basic instinct will not be scrappily doing whatever it takes with very little budget and very few people. Most of these folks are administrators, not doers. They worked at companies that outsource all executional work, more or less.

Although a VP, GM or C-level leader almost never becomes a startup employee, the directors below often do. And they often seek a promotion by joining your startup. In other words, if you offer a corporate-level salary or within 10-20% of a public firm equivalent, you will attract these folks. 

They see your startup as a notch in their career, not your startup as a mission they truly want to join.  And that is the problem. Careerism vs. loyalty to the company. BigCo employees by definition are loyal to their careers, not companies. They learned this behavior to survive. Once learned. It cannot be unlearned.

Dr. James Richardson

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