Dear SaaStr: Am I Better Off Hiring an Outside CEO or Promoting Someone From Within?
There is no magic answer here:
- At Shopify, Tobi Lutke wasn’t the original CEO, but he stepped up and became the CEO when the original CEO … quit.
- At Github, Chris Wanstrath never did find a replacement CEO. Instead in the end, they sold to Microsoft for $7.5B.
- At LinkedIn, Reid Hoffman hired Jeff Weiner as a very successful outside CEO, leading to a $25B acquisition by Microsoft.
- At Salesforce, Marc Benioff was the founder, but not the original CEO. Marc hired an outside CEO to run it. But he quickly stepping in when it wasn’t working and most of the cash was gone.
Having said all that, for any promotion, the “50/50” rule likely applies. 50% of the time, that executive you want to hire … already works for you.
Make sure you at least consider all the internal candidates. For a Director, VP … or even CEO.
And also note that a lot of successful SaaS CEOs that have brought in an outside CEO, or another CEO … have come back. Therese Tucker is back as CEO of Blackline, Eoghan McCabe is back at Intercom, Josh James at Domo, etc. So whether you find a successor inside or outside your org … bear in mind you may just need to come back some day.
And a related post here:
