Transitioning from Developer to CEO

I used to find it really easy to write. I didn’t know very much about business and wrote about startups constantly – so I probably suffered from Dunning Kruger effect. Don’t laugh, my blog posts back then consistently ended up on Hacker News’s front page.

These days I find blogging about business very hard. I work with a team of people who are smart and have experience and areas of expertise far outside my own. So my first thought as I try to dispense advice to other company founders is “Oh shit, so-and-so is going to read this and know what an idiot I am.”

I think most of my team may already  know how ignorant I am so I probably shouldn’t worry as much.

Anyway, to the point. I used to be a developer  – part of a two person founder team that for over a decade tried to create a business out of thin air, ambition and whatever capital we could scrounge up. At some point the engine actually sprang to life and started running and then quite quickly sped up.

These days we have a going concern with a growing team and whatdyaknow! An actual business on our hands.

Around early 2015 I made a hard transition into beginning to be a CEO as we hired our first team members. The team grew rapidly and today it ranges between 25 to 30 people. The business is busy, we have more than one business ‘division’, three execs, tons of financial throughput and lots going on.


The transition from developer to executive or CEO can be quite challenging I think. To be a developer you need to disappear into your head for around 40+ hours a week and do that for years if you want to be a good developer.

When I’ve been coding for several days, I have found that my ability to communicate verbally suffers. I stutter more – I don’t actually have a stutter, but I have more verbal hesitation. When I’m “on my game” and have had plenty of phone calls and in-person conversations, I find communication easy and I have the ability to make it flow if it gets a bit stuck. I think this is one of the challenges devs face when becoming execs – they need to learn how to communicate and how to make it flow.

As a chief executive, you need to talk to teams or groups of people frequently. The conversation tends to be one sided because you are describing a vision, a goal, a challenge. Even when it is collaborative, you tend to be the one doing most of the talking in a room. You’re the facilitator. Being in many meetings a week where you have to play that role is an acquired skill, but I’ve gotten better at it over time and I’ve also gotten more comfortable with it.

When I started out and our team was just 5 to 10 people, I found our Monday team meetings and Wednesday product meetings quite tiring. We would have them at 10:30am and an hour or two later once the call wrapped, I was just finished. I didn’t have much energy left for a couple of hours until I recovered. As I did more and more of them, I found that they became easier, and then much easier. Now they energize me. It took about 2 years to get there.


Writing is one of the most valuable skills I think any exec needs. The ability to clearly articulate your ideas in individual or group emails, blog posts and documents is absolutely critical. I happen to enjoy writing. I don’t do much personal writing anymore – obviously trying to get back into it with this post. But blogging is, I think, what really helped me become a better writer.

Writing is also an acquired skill and a muscle that you have to keep fit. When I have written several blog posts over a period of weeks, I find things flow when I need to write another. When I’m rusty, the page is an abyss and the abyss stares back.

Writing is probably what connected me with the amazing early investors we had in Defiant (called Feedjit back then). It also served as a source of early marketing, gave me the ability to write compelling copy on our first website and today, writing is how I communicate with our team.


I think leadership and power are often confused. Power is something desired by many. It is seductive and TV and film dramas are filled with scenes of people ‘flexing’ in some way. The fantasy of having someone bend to your will is irresistible if the ratings are anything to go by.

I think when it comes to inspirational leadership, power, a desire for power, the exercising of power and the confusion between power and leadership can be incredibly destructive and toxic for an organization. History has shown that accumulating power and using power devices and structures to manipulate people and groups can get things done. But I choose not to live that way and I don’t want to work for or be part of an organization that conducts itself that way.

My leadership style is still evolving. I’m relatively new to leading a team. I’ve only been doing it for about 3 years now. Perhaps that’s why I’m so willing to write about it – I don’t yet know how little I know. But I would describe my style as follows:

  • Know that there is much that you don’t know and many skills you don’t have and will never acquire. Get really comfortable with that. You’re a hilarious ass. Get over yourself!
  • Assemble a team of talented people who you trust and who are equally realistic about their strengths and weaknesses.
  • Trust your team. In other words, collaborate, and then give them the space they need to exercise their talents and to an amazing job.
  • Collaborate with the team to gather data and then come up with a shared vision for the organization. I find that having many conversations with no whiteboard helps because you are forced to clearly visualize in your minds eye the vision and path forward. That helps you and the team remember it.
  • Once the vision is clear, as CEO you are the custodian and keeper of that vision. It is your job to repeat it to the team when the opportunity arises. The way I do that is to describe where we are headed, why we are going there, how we will get there and what it will look like on Monday morning once we have arrived. [Kudos to my father who was a brilliant CEO and is a great strategic planner for some of that. Dankie Pa!]
  • I generally treat others the way I would like to be treated and the way I want my team to treat each other. I think that requires empathy because everyone has a bad day.
  • I try to create space in conversations so that others can fill that space with their intellectual contribution. I think this may have resulted in others in the organization taking the same approach to running meetings and collaborating.

I no longer code

These days I no longer write code. As with speaking and writing, code is a muscle and if you don’t exercise it, you lose it. If I look at code – usually when I’m evaluating a job applicant or understanding a new vulnerability or exploit – it takes me a few minutes to switch modes and get into the right head-space.

If you are a developer and become an executive or chief exec, I think that it comes with that sacrifice. You may not be the incredibly productive and talented developer that you used to be as you start using different intellectual muscles.


I started my career in operations and did that for about a decade. Then switched to being a full-time developer. So I’m an ops and dev guy. I think that one of the things that is very challenging for technical founders who transition into being a CEO is that you have to step back and trust someone to do a job that is equal to or better than the job that you did.

Stepping back takes a leap of faith. It takes trust. To be completely honest, when Matt B  joined our organization as our first dev hire and I completely stepped back from being the only dev on the product, I actually could not believe the incredibly job he did from day one. I thought “Holy crap, the guy can code and I think he may code better than I do. And he works for us? What is a guy this good doing working for us?”

I think I had a touch of imposter syndrome. I felt like we weren’t a real company even though we were making quite a lot of money and that cash flow was rapidly growing. On a side-note, I suspect this may be why many founders go and raise money – they too suffer from imposter syndrome and by raising money from an investor it makes you a ‘real’ business.

Once Matt and Tim, our first two team members joined, I found that I had to delegate an increasing number of tasks as we hired more people and each time it’s a new leap of faith. You trust that the person you’re hiring is going to do a great job, take your hands off the wheel and every time I was surprised for some inexplicable reason that they did an amazing job.

These days I carefully monitor myself to make sure that I am giving our team the space they need. A day ago I was having a conversation with the team about something technical. It required the developers to discuss whether going a certain technical route was good for the organization, strategically. I initially started leading the meeting and I realized that I was creating an imbalance in the conversation. Because I’m CEO, I was dominating the room and even if someone held a strong opinion they might not voice it if it disagreed with something that I said. Or perhaps they would voice it but my opinion might carry the day by default. So I recused myself from the conversation and asked our lead developer to facilitate the meeting going forward and let me know what the team decides. I also explained why I was recusing myself.


As we scale, leaders are beginning to emerge in the organization. This isn’t the kind of awkward “leadership ability” they teach in high-school where the noisiest or brashest or biggest kid is described as having leadership abilities. Because of the mutual respect we have for each other and the intellectual space we provide for each other in conversations, our leaders are emerging organically and in a very comfortable way. They tend to be the people that simply take on a particular role through passion or necessity or both and the rest of the team acknowledge them as the person to turn to when they have certain kinds of questions or need guidance.

I’m beginning to notice that as we scale, our team is in some cases having to go through the same kind of “stepping back” process that I went through. When we were just a handful of people, we all had many roles. As we grow, some of us are going to have to acknowledge that someone else needs to do a job that we used to do – and perhaps enjoyed very much. That process will be a challenge and we’re just beginning to see that emerge.

Going forward

I’m confident in my ability to continue to grow as a CEO and to grow with the team. We are not a public company working to goose a stock price and we are not a private company that has a high pressure board with a risk of executives being changed out if targets are not met.

One of the benefits of this is that it has created a culture within the company of knowing that it is safe to fail. Kerry (my wife and co-founder) and I failed many times for more than a decade before we created our current successful business. As executives, we are in an environment where we can do risky experiments using large chunks of our cashflow and we know that no board is going to fire us for failing.

Our team knows the same thing. We just started building a completely new department in the company and one of our team members has stepped up to lead that effort. She knows that she can take a risk, step out of her comfort zone and give it her absolute best shot and it’s OK to get it wrong. We’re all in the experiment together and if it doesn’t work out, we’ll just try a different way.

That’s it

If you are a technical startup founder or aspiring founder, I hope you have found this useful. You are welcome to comment here or shoot me an email at and I will do my best to respond to any questions.

Can you build a Big Business on Apple’s App Store?

A good friend refers to the Apple App Store as the California Lottery. So I thought I’d do some rough numbers on how feasible it is to build a big software business creating apps for iPad and iPhone and selling them in Apple’s App Store.

The Apple App Store will still own three quarters of mobile app revenue by the end of 2011. It’s the place to be if you want to develop paid mobile applications.

According to Apple, they had paid out developers $2.5 billion since the creation of the app store until July this year. I’m including this as a sanity check on my numbers below.

According to this article, the combined revenue of all app stores will be $3.8B in 2011, with Apple owning 75% market share. That’s $2.85B total revenue for the app store in 2011 with 30% going to developers so total payout to devs will be approximately $1.995B for 2011 (which roughly gels with the total all time payout number above).

The app store just passed 500,000 approved apps in May 2011. (Edit: fixed a typo. Apps, not developers)

In May of this year:

  • $3.64 was the average price for paid apps.
  • There were 244,720 paid apps.
  • There were 85,569 unique developers.
If those paid apps split Apple’s projected 2011 revenue to developers of $1.995B between them, they each earn $8152.17 per year. There will be more paid apps by the end of 2011 than there were in May, so the same calculation for 2010 revenue to developers gives us: $2.1 total sector revenue X 75% apple’s market share X 70% developer share gives us $1.1025B / 244,720 paid apps = $4505 per app in 2010.
I’ve calculated both 2010 and 2011 revenue per app because the only data I have on total paid apps is from May.
So total revenue per app now is roughly between $4K and $8K per year based on my back of the envelope calculations.
While app store revenue is increasing, so is the number of developers in the app store, exponentially:
Lets say you create a startup producing Apple App Store apps. You manage to completely dominate the app store in 2011 and capture 1% of the total 2011 app store revenue of around $2 billion that Apple will pay out to developers.  That’s $20 million in annual revenue. Remember, you’ve just owned 85,560 other unique developers and a quarter million other paid apps, which is not impossible.
To put this in perspective, here is the 2010 annual revenue from a collection of well known software companies, leaving out the eye watering revenue from companies like Oracle, Microsoft, Apple, Google and the like.

Food for thought.

Are you building an R&D lab or a business

Take Twitter in a parallel universe. The team builds a great useful and viral product. They start growing like crazy and hit their first million members. The growth machine keeps pumping and everyone is watching the hot Alexa and Compete graphs cranking away.

They start getting their first acquisition offers. But the smart folks know the second differential of their graphs is still wildly positive (it’s curving up). They decide to hold off on a sale because they figure that even though they have to raise another round to buy infrastructure, their equity will still be worth more net net.

They keep growing and that second differential gets a little smaller as the curve starts flattening out into a line. Then right before the line turns into the other half of an S they hire Allen and Company, line up all the acquirors and sell for $3Bn to Google.

What just happened is a kick ass group of product guys teamed up with a kick ass group of financiers to create an R&D lab. The lab came up with a hit product and was acquired. Make no mistake, this is a very very good thing! In this parallel universe the amazing product that is Twitter is combined with a company with the business infrastructure and knowledge to turn it into a money printing machine. That creates jobs, brings foreign currency back into the US through exported services and of course the wealth creation event for the founders has a trickle-down effect if you’re a fan of supply side economics.

Now lets step back into our Universe (capital U because I don’t really believe in this parallel universe stuff). Another group of kick-ass product guys called Larry and Sergei teamed up with a group of kick-ass financiers called Sequoia in 1999. A guy called Eric Schmidt who is a battle hardened CEO from a profit making company that got their ass handed to them by Microsoft joins the party.

In 2000 Google launched AdWords and the rest is business model history. A history that you will never hear because once the company started printing money they went dark. There are tales of Bill Gross having invented AdWords, legal action, a possible out of court settlement – but no one will ever know the full details of these early days and we have almost zero visibility into the later story of how Google turned that product into a money printing business.

The stories of successful transitions from product to business are never told. Even if they were they would bore most of us  because they are not fun garage-to-zillionare stories. They are stories where the star actors are cash-flow plans, old guys with experience and teams of suit-wearing sales people.

The thing that attracts most geeks (also called Product Guys) to startups is the garage to zillionare story through an exit. And that’s OK provided you get your head screwed on straight and understand that you are an R&D lab who’s goal is to get acquired. So go and make yourself a credible threat. Make yourself strategically interesting. Go and build the kinds of relationships that demonstrate your worth to potential acquirors, get them addicted to your data and result in an exit.

[Quick aside: I spent the day skiing a while back with a great guy who heads up a certain lab at Stanford. They came up with an amazing product that you now use every day. They teamed up with an A list VC with the specific intent of selling to Google. That’s exactly what they did and it has improved our lives and Google’s business model. So again, the R&D lab approach is very very OK.]

The other smaller group of founders are business geeks. I’m friends with a handful of company founders and CEO’s in Seattle who absolutely personify this group. Everyone of them was a VP in a larger company. They all have MBA’s from top schools. And every one of them is focused on generating cash in their business. The road they’ve chosen is a longer, harder road with a lower chance of success but a much higher reward (think Michael Dell, Bill Gates, Larry Ellison) if they succeed.

Both paths are morally and strategically OK. You just need to know which you’re on and make sure your investors and the rest of the team are using the same playbook.

temet nosce (“thine own self thou must know”)

Why we breathe

Free Diver in LimasolHold your breath for a moment.

In about 10 to 30 seconds you’ll be feeling a strong desire to take a breath. That’s not caused by lack of oxygen. It’s caused by excess carbon dioxide buildup in your blood.

[Ok you can breathe again.]

The trigger in mammals that causes us to want to take a breath is an excess buildup of CO2. In reptiles the trigger is lack of O2. Free divers don’t hyperventilate to get more O2 into their bloodstream. They do it to to flush out excess CO2 and remove that breathing trigger. That’s also what causes shallow water black-out as you’re surfacing, so don’t try it without a buddy.

I’ve worked in more startups than I care to count where the lack of endurance was not caused by lack of oxygen, but an excess buildup of waste. Getting a larger office, buying excess server capacity early on that isn’t needed, hiring excess people to manage that server capacity, hiring managers to manage the people, hiring an ad agency and PR firm and a small team to manage them.

Once you start down the path of waste you may still have enough oxygen in your bloodstream to surface, but the excess CO2 in your business creates a strong demand for more Oxygen which causes you to raise another round of funding, producing more CO2 and the cycle continues.

So start your business by hyperventilating to flush out all excess CO2, take a deep breath and beware of shallow water blackout as you’re approaching the surface.

[Photo credit: My good friend Bruno Stichini who hosted a free diving world record attempt in Limasol, Cyprus back in 2000]