Small Businesses

From Google to Microsoft — What Made These Founders Hire a CEO?

  • 4 min Read
  • April 1, 2020

Author

Neha De
Neha De

Neha De is a writer and editor with more than 13 years of experience. She has worked on a variety of genres and platforms, including books, magazine articles, blog posts and website copy. She is passionate about producing clear and concise content that is engaging and informative. In her spare time, Neha enjoys dancing, running and spending time with her family.

Table of Contents

In 1987, Intel cofounder Robert Noyce handed the reins of the company he co-founded to Andy Grove, who led Intel through a period of exponential growth — from 1991 through 1996, Intel’s revenues grew by 336 percent, with a profit margin of nearly 25 percent.



Last year, when Google cofounders Larry Page and Sergey Brin announced that they would step down from leadership positions as Alphabet CEO and president, respectively, Google CEO Sundar Pichai stepped into the CEO role at the parent company in addition to his existing role as Google CEO prompting Alphabet’s stock to rise.



Microsoft’s share price grew four-fold under Satya Nadella after less than five years of his taking charge. And under Nadella’s control, Microsoft continues to be one of the biggest and most important companies in the industry.



In January 2019, Sasha Orloff took the plunge and announced he was stepping down as CEO of LendUp, the company that he had cofounded with his stepbrother and scaled over seven years.


What Prompted These Decisions?




There are many such examples of founders/cofounders who stepped down as CEO or hired a new CEO. This begs the question: What made these successful entrepreneurs decide to hand off the reins?



According to Orloff, LendUp had reached the point where what it needed and what he was good at had become very different things.



Co-founder of Seedrs, Jeff L’s decision to hire a CEO was due to the “increasing difficulty managing both organic growth and strategic big best opportunities.” By constantly switching between two mindsets and rhythms, Jeff L felt he could no longer be as effective as he wanted to be.



To be a successful growth-stage CEO, an entrepreneur needs to be ready to manage a massive organization and devote considerable time to tasks such as running meetings and other business processes, according to LinkedIn’s co-founder Reid Hoffman. A CEO progressively needs to focus on process and organization, and that was not what Hoffman was passionate about, so he relinquished control, he noted.



Earlier this year, Fastly founder Artur Bergman announced he would be stepping down as CEO, less than a year after his internet infrastructure company went public. In a letter to his employees, he said, “At my core, I am a developer. My true strengths and passions lie in building the architecture and innovation, including our compute platform.” He has since moved into the role of chief architect and executive chairperson.



After founding Chipotle in 1993 in Denver, Steve Ells served as CEO through November 2017, when he bowed out in the wake of food-borne illness scandals that sent the company revenues plummeting. He issued a statement that read, “Bringing in a new CEO is the right thing to do for all our stakeholders. It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food.”


A Business Can Be Like a Child




In a joint open letter announcing their decision to step down last year, Page and Brin likened Google to their child. They wrote, “Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost. While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents — offering advice and love, but not daily nagging!”



Chris Costello, who co-founded Blooom with Kevin Conard and Randy AufDerHeide in 2013, shared the sentiment. He explained, “When you start a company, it becomes almost like a child. It’s a very emotional decision to think about not having the reins to that company.” In 2016, Blooom hired Matt Burgener as chief marketing officer and later promoted him to CEO. “I get to do what I do best — evangelizing the Blooom mission — and Blooom gets a better CEO to lead it on a day-to-day basis,” Costello added.



There is no one-size-fits-all approach for when and how a founder/CEO should step back. However, a well-timed transition from the founder/leader to a judicious successor can take an already successful company to even greater heights.

Talk to our team today to learn how Escalon can help take your company to the next level.

  • Expertise you can trust

    Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.

  • Quality and consistency

    Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.

  • Scalability and Flexibility

    Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.

Contact Us Today!

Tap into the latest insights from experts in your industry

People Management & HR

2025 Employment Law Updates: What to Know

As we step into 2025, businesses across the country face several important updates in labor laws and employee benefits. Staying...

Read More
Startups

5 Signs Your Startup Needs an Outsourced CFO  

5 Signs Your Startup Needs an Outsourced CFO   Startups often operate with lean teams, but as they grow, financial complexity...

Read More
Leadership & Growth

CG Startups: How to Keep Costs Low While Scaling Operations 

Consumer Goods Startups: How to Keep Costs Low While Scaling Operations  Scaling a consumer goods startup requires a careful balancing...

Read More
Press Releases

Escalon Expands Its Reach: Full Stack Finance and Early Growth Join Forces with Industry Leader 

Escalon Expands Its Reach: Full Stack Finance and Early Growth Join Forces with Industry Leader  In a strategic move that...

Read More
Taxes

Delaware Annual Review: What Series A-C Startups Must Know to Stay Compliant 

Delaware Annual Review: What Series A-C Startups Must Know to Stay Compliant  For startups incorporated in Delaware, staying compliant is...

Read More
Taxes

Tax Planning for Startups: Preparing for Your First Tax Filing

Tax Planning for Startups: Preparing for Your First Tax Filing as a Growing Business  For many startups, the first major...

Read More
Taxes

Unlock Tax Savings with the R&D Tax Credit

As a startup, managing cash flow and minimizing expenses are critical to your business's survival and growth. One often-overlooked opportunity...

Read More
Accounting & Finance

1099 Compliance for Early Stage Startups

1099 Compliance for Early Stage Startups As your startup grows from seed funding to Series A, B, or C, you’ll...

Read More
Accounting & Finance

Meet the Experts at Escalon: Ankush Sharma

Welcome to our new series, Meet the Escalon Experts, where we introduce you to industry leaders shaping your business’s future....

Read More