Why I Hired a CEO
I co-founded Optimizely with Pete Koomen in 2010 with the goal of making experimentation easy. I believed then, as I do now, that we are democratizing the scientific method. That’s a big idea and the foundation of a company that has the potential to endure for over 100 years and outlive us all. If our company outlives me, then the question of whether I’m CEO or not comes down to when to pass the reins on, not whether I should.
This is a question I’ve been thinking about for a long time. In 2013, I first read Reid Hoffman’s blog post entitled “If, Why, and How Founders Should Hire a Professional CEO.” Reid describes beautifully the process of self-examination he went through to make the decision to ultimately hire his successor. After reading this post, I made a commitment to myself that when the time was right, I would pass on the reins.
The decision to start a search for a new CEO is not one I made lightly. I sought the advice of our board, our advisors, and even the author of the aforementioned blog post, Reid Hoffman. While most of the advice I got was focused on trying to convince me to stay the course, I knew in my heart of hearts that it was the right time to start a CEO search. I have seen many companies with bright prospects fail because of a founder who is unable to imagine a world where they are not CEO. I owe it to our employees and our customers to do everything in my power to help us reach our full potential.
Why now?
As our CEO for the last seven years, I’m incredibly proud to have helped us grow from $0 to $90M in ARR. The key to our growth and success so far has been moving upmarket into the enterprise. Enterprise customers spend millions of dollars a year on our products because they see what we offer as critical to their success. The world is going through a fundamental shift into one where experimentation is becoming critical to the way businesses operate. We are in the right place at the right time. Our strategy to build a category-defining multi-billion enterprise software company is working.
Given the massive success we’ve had in the enterprise, it was clear to me we would benefit greatly from having a leader at the company who had decades of enterprise software experience and has helped build several multi-billion software companies. Bringing in a leader with this experience would be an unequivocal win for customers, employees, and investors.
Not only would it be a win for these important constituents, but as the largest shareholder in Optimizely, I have a responsibility to look out for the best interest of all shareholders and it is in all of our collective best interest financially for me to pass on the reins. In fact, despite popular tech mythology, a study of 457 tech startups shows that startups where the founder willingly relinquishes control of the board and the role of CEO are almost twice as valuable as ones where they don’t.
So, I did exactly that. I relinquished control of the board and the role of CEO and began a search for a new CEO on the first day of our fiscal year, February 1st.
The search
I took the responsibility of running our CEO search very seriously and spent countless hours interviewing and spending time with candidates. Just like we did for our investors, we put candidates through a mock board meeting to see them in action. I was delighted by the caliber of candidates we could attract. It turns out, there are very few successful $90M ARR companies where the founding CEO willingly relinquishes control. This is very attractive to CEO candidates because it shows we are at a mature enough stage in the market for them to have an impact and that they are going to have a willing partner in the founder who is committed to their success.
One thing that was very important to me in this process was that we saw a diverse slate of candidates. At Optimizely, we have implemented the Rooney rule for all hires of directors and above, which means that no candidate slate is complete until it includes a woman or underrepresented minority. This process was no exception, and we were fortunate enough to be able to consider several candidates who might not have been otherwise considered had we not instituted this rule.
Through this process one candidate emerged as the hands-down favorite: Jay Larson. I was so impressed by Jay that our first interview went for four hours straight! Jay played critical roles building two phenomenal enterprise software companies: Mercury Interactive and SuccessFactors, that were worth $4.5B, and $3.4B, respectively. Not only that, but he spent the last three years as CEO of Birst, where he successfully enabled the company to move upmarket into the enterprise and become the leader in cloud analytics. Few people on this planet have accomplished what Jay has, and not only that, but done so in a customer-centric, collaborative, and empathetic way. I personally couldn’t be more thrilled to welcome Jay to Optimizely!
My role going forward
Now that it is clear that Jay is the right person for the CEO job, I’d like to share what this means for me and my role. I’m not going anywhere! This is a 1+1=3 situation. I am deeply committed to the company and will now serve as our full time Executive Chairman. This is a role that means different things at different companies so I want to make it clear what this means at Optimizely.
I am going to focus on three areas that I am most passionate about: customers, culture, and product. I will NOT serve as a figurehead with little operational responsibility. In this role, I will continue to roll up my sleeves every day and manage our 100+ person design, engineering, and product management organization (ADEPT).
On my role regarding customers: Deeply empathizing with our customers and solving their biggest problems is one of our most important missions and I want to continue to champion this. In order to make our enterprise customers like IBM, Microsoft, and The New York Times wildly successful I need to continue to spend time with them regularly in order to listen and learn from them as well as share our vision for the future.
On my role regarding culture: One of the biggest reasons why employees join Optimizely and stay at Optimizely is because of our cultural values. Some organizations need a complete cultural reset when a new CEO comes on board, others have an opportunity for a thoughtful evolution, not revolution, when it comes to culture. Jay and I firmly believe we are in the latter category. Our culture has evolved several times over the years as can be seen in the revisions to our living culture doc. Just as we’ve done before, we want to refresh and refine the key aspects of our culture that will ensure we win the experimentation market and reach out full potential. I will also continue to be involved in our most important cultural institutions like Infinity & Beyond (employee onboarding) and Show & Tell (weekly all-hands).
On my role regarding product: Today, I directly manage the design, engineering, and product management organization (ADEPT). That will not change. I see my role as being the bridge between the minds of our customers and the minds of our engineers. Jay and I both agree I should continue to run these organizations and continue to be deeply involved here operationally.
As our Executive Chairman, I will focus on customers, culture, and product. This is honestly my dream job. I feel so fortunate to be able to serve in a role where I can have a big impact every day and spend my time on the things I love.
Lastly, one thing I want to make clear is that there can only be one CEO. That person is Jay, not me. Jay is ultimately accountable for our performance as a company, and to that end, I will do everything I can to make him successful. He and I may disagree from time to time, but the reason I hired him was because I want that. I want to make it clear that, as our CEO, the buck stops with him. I trust him to make the best decisions for the company and I couldn’t be happier with this arrangement.
