My private company is healthy and growing. Do I need to hire a No. 2?

By Maynard Webb

November 25, 2020
 
Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at dearfounder@fastcompany.com.
 
Q. We have a healthy company and are at about $60 million in revenue. Now I need a strong No. 2 to manage our current business, while I work on our next legs of growth, which includes a geographic expansion. Should I hire a chief operating officer, and if I do, how can I work with that person? What advice do you have about how to make this relationship most successful?

—Founder of a later-stage private company

Dear Founder, 

I applaud you for thinking carefully about this next phase. You are right: in order to become a bigger, and one day even a publicly traded, company you will need to focus on this kind of expansion. 

I think that what you are talking about, and looking for, is two different jobs. A COO could be the right hire to help manage the current business and there should be a different person who can help you expand internationally. That would also free you up to focus on your next stage of growth including revamping the product to resonate with a larger audience and stay involved with the customers, both of which are required of the CEO. I hope that you are up for that. If not, there might be a different solve entirely. 

The COO role is very interesting. It’s not always clear exactly what that person does, which is because it varies from company to company. When I was the COO of eBay my focus was on running the technology and product—and keeping the wheels on while CEO Meg Whitman focused on the strategy and new phases of growth. If you are a founder who is product and tech focused, the COO will more likely be more of a chief revenue officer (CRO) oriented around sales and marketing and focused on the front end of business. I would recommend reading the book Riding Shotgun: The Role of the COO, which talks about the different models for the role. 

Now is the time to sit down and explore what you think you will need to get to this next stage. Some questions you should be asking so that you can make 1+1 = 3 (instead of less than 2):

    What kind of person are you looking for?

    How do you partner? 

    How will you make sure you are in sync? How do you ensure the person’s intentions match yours—you are not looking to be replaced. Sometimes COOs want to replace the CEO. How will you test their intentions and build trust?

    How do you set them up for success? Understand that the COO role comes with complexities. Even if the CEO and COO have a great relationship, there will be folks that don’t want someone in between and they will try to get rid of the COO. 

    How do you monitor progress? 

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