What Now? Founder Re-Org.

Andreessen Horowitz General Partner Peter Levine is launching a series of tech leadership case studies called “What Now?” posted in two-part question/answer blog posts that will appear first here on AllThingsD. His first post presents a hypothetical situation that touches on the dilemma of being a founding CEO and realizing your co-founder isn’t being effective as the engineering lead. The solution will appear here on Friday.

SpiderNet has recently been funded $10M in an A round by two venture firms in the Valley. As part of the funding, you agreed to think about bringing on a VP of Engineering, though you are uncertain when this might occur. Currently, the company co-founder manages the engineering organization. You’ve made no explicit commitment to the timing, only that the company would assess when a new VP engineering might be needed. You sense that the time is coming.

The engineering group has 10 people at this time, and the co-founder has very little engineering management experience. He’s done a phenomenal job of hiring super-smart folks, and the group is generally working quite well. However, the company needs to double the size of the engineering team over the next several months and you are not at all sure how well the co-founder will scale.

While the engineering team is doing well, you’ve noticed some issues in product quality and some slipped dates, but nothing terribly out of the ordinary. Some of the engineers have come to you to suggest that they want more process and leadership in the engineering organization. Right now there is little process or organizational structure, which is what you’d expect in a start-up.

The bottom line is, you have this gut feeling that when you double the size of the engineering organization over the next several months in preparation for your product release, things will not run very smoothly. You are pretty convinced that you are going to need to change things around, but are very unsure when and how to go about making the changes.

What now? Some things you consider…

  • Do you put a new VP above the co-founder? Do you put a new VP under the co-founder? Do you have two in the box leadership? Do you create a new job for the co-founder?
  • And when you make the changes, what reaction will the co-founder have? Will he still be motivated or will he pack up and leave? How do you approach him on the topic? How will this impact your company’s culture?

Chime in on the comments below, and tune in Friday for Peter’s answer.

Peter Levine has been a lecturer at both MIT and Stanford business schools and CEO of Xensource. Prior to Xensource, Peter was EVP of Strategic and Platform Operations at Veritas Software where he helped grow the organization from no revenue to more than $1.5 billion, and from 20 employees to over 6,000.

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