Despite some high-profile examples, coders are often not considered to have much talent for, or even interest in, the business side of software. But the CEO of a major data platform says technical employees can transition to leadership—and in fact, they might even be well-suited for it.
For four years former developer Nick Halstead was the CEO of social data platform DataSift, where he learned that programmers were much better qualified for C-suite positions than he had originally thought.
"People talk about technical founders, but they don't talk about technical CEOs," says Halstead. "It's peoples' perception that technologists don't have the business savvy, but in an early stage company the technologist should be driving a lot of company decisions."
Here are five reasons why developers can make great CEOs, and a couple of things they must learn before they do.
Doing business can mean anything from making a sale or setting up a partnership to managing logistics. "I like to apply a lot of logic to all of these business processes in the same what I would a programming task," says Halstead. "Programmers are very strong on strategy and execution because they have to plan so much." Areas like sales and marketing may seem like alien territory for the average developer but Halstead disagrees. "You must have empathy with the needs of the other party, whether that is in a business development deal, selling to a customer or marketing. Programmers can do this well because it's essentially quite a logical thing. You are looking at what is the problem they are trying to solve? How can they go about it and how can I actually solve that for them? As a programmer you spend your whole time solving other people's problems."
Spreadsheets are still the basic tool of business planning and programmers master them easily. "I must have made thousands of spreadsheets," said Halstead. "From the very first angel investor who expected a cash flow projection, no one is going to give you money unless you can show what staff you are going to take on, what equipment you will have to buy, what your rent is going to be. It was easy as a programmer to actually put together some very sensible looking numbers," he says.
Whether you are considering adding a new feature to the product or choosing a supplier, there’s a new spreadsheet to be made for most business decisions. In an early stage company which does not yet have a finance team, it’s the founder or CEO who will make those spreadsheets, giving the technical CEO a distinct advantage.
One of the biggest challenges in a growing business is effective information flow. "The cache is the thing that helps you optimize access to data," says Halstead. "The management team is the cache to the CEO. You are reading only the most pertinent bits of information without the micro-management of trying to access the database direct."
Caching also means defining what data should be reported on a daily, weekly or monthly basis. "DataSift has 50,000 metrics that are tracked literally every minute. Nobody is going to look at 50,000 metrics," says Halstead. To solve this problem DataSift determines the most important metrics and then places alerts on the others.
Naming means developing a common vocabulary for products, processes and concepts across the business. "All programming requires you to come up with a name for whatever feature and thousands of things need to be named at various levels," says Halstead. "For a CEO, it's crucial that the company has a clear idea about naming processes, products, everything. That's more challenging than you think as the company grows. Programmers are good at it because they literally do spend half of their time having to define what something is."
Every developer had struggled with a seemingly intractable problem for days before the solution magically pops into his head. This process isn’t just useful for code. "Debugging can be very very complicated," says Halstead. "You have got tens of thousands of lines of code. You are trying to find, say, a memory leak and all the tools you have used are not showing up where that leak is. You have done every kind of modeling. Then one morning, you wake up and the solution is sitting in your head. Don't think that ability should stop at programming. Companies go through those challenges from personnel to strategy choices."
Halstead recently asked an audience of developers whether they would prefer to get a multi-monitor, high-speed development setup at work or receive the value of the equipment as a cash bonus. To a man, they choose the development setup. "Non-programmers think that like salespeople, programmers can be motivated by money," says Halstead. A programmer’s salary must make him feel sufficiently valued but beyond that cash incentives don’t tend to be very effective. "I have been in businesses with bonus schemes based on productivity. None of them ever worked. Your productivity was tracked by the number of features that you completed on the timeline that you gave your manager. So the programmers start to game it and say ‘we can finish that in 12 weeks’ as opposed to the six weeks that I know it's going to take."
A better alternative is to give developers the opportunity to solve big technical problems, to learn constantly and even to radically change roles in a way which doesn’t fit in with the company’s resourcing plan. Developers also recognize the value of other developers.
"Programmers tend to accumulate company knowledge more than any other role within a business, " says Halstead. "They become your Intellectual Property in a person. It is going to cost you three times their salary to replace them, in addition to the massive impact of that IP walking out of the building."
It’s not all good news for the aspiring programmer-CEO. There are a few things he is going to have to learn and the first is how to listen, especially to non-developers. "A lot of very talented programmers tend to be arrogant bastards," says Halstead. "I know that I was incredibly arrogant as a young programmer, thinking you know everything. You seriously can't have that attitude as a manager."
However, listening is not the same as taking advice from everyone who offers it. "Your customers will always tell you all kinds of random stuff and so will all your employees. In the early days of this business, I had angel investors who were vehemently against us going down the line of Twitter. But it's an important lesson to know when someone has got a view that you should respect and take from."
One thing every CEO must learn to do is tell a good story. It’s essential for everything from getting investment to hiring. "If you are not prepared to learn to tell a story, then don't attempt to be the CEO," says Halstead who taught himself how to present the hard way. "I found an event in London called MiniBar. It was free drinks for the first hour and five companies got to pitch. To get a crowd of drunk people to listen to you, you were going have to make the story compelling, simple and maybe even entertaining."
After that Halstead took every opportunity, big and small, to present. "If you can't as CEO talk passionately about your product and your market segment for at least an hour without stopping then you shouldn't be doing it. To achieve that is practice. Anyone can do it."