When is CEO 2.0 good? Ambient hires ex Palm, Sony exec as new CEO.

My old company Ambient Devices have just appointed Carl Yankowski, the former President of Sony Electronics and CEO of Palm, to come run the company. Ironically, Marc Andreessen just posted his guide on How to hire a Professional CEO. I'll copy his very brief post in its entirety if you haven't read it:

Don't.

If you don't have anyone on your founding team who is capable of being CEO, then sell your company -- now.

Perhaps Marc was just talking about the lack of a CEO at inception, but I disagree with the rule to never hire a new CEO. An outside CEO is usually brought in for one of two reasons:

a) Holy shit, this startup is totally screwed, let's fire someone so we can blame it on him. You see this frequently, with the recent exit of Dave Sifry at Technorati as a good example.

b) Holy shit, this startup isn't a startup anymore, and the current challenges require someone entirely different. There are a host of examples here as well, such as Google.

A big mistake common of VC-backed companies is replacing the CEO when the startup is in real trouble (scenario A). Of course it's hard to maintain confidence with your CEO if the company is going through rough times. But every startup has some real dark days, and the best person to make sure that it does not die is the founding team. The only thing a company has at that low point is its culture and its vision -- both of which can only come from the founders. So either the culture & vision are worth saving and you stick by the team, or they are not and it's time to shut the thing down or sell it if you can. A new CEO does neither.

But, a startup has three phases: the jungle, the dirt road, and the highway. Being the CEO of each of these is really a different job. And being a good leader is understanding how to get people better than you at a job to do it, even if it's your own. Sometimes when the start-up is doing very well, but lacks some critical expertise to get to the highway, it's time for a new leader (scenario B).

I'll be honest and say this is a very tough thing for a CEO of a startup to talk about. It's one of those dark corners we'd rather not discuss with everyone. When it comes to Conduit, I don't think there is a person on the planet that understands as well as I do what we are trying to do here, and has the ability to execute on it. But, the startup you start is almost never the startup you end up with.

In the case of Ambient, it's clearly Scenario B and so I'm very happy for David, Ben, Pritesh, and their new CEO Carl Yankowski. Ambient had its share of ups and downs, but has built a solid brand, loyalty of fans, and strong sales record with retailers.

However, Ambient was always best at pushing one amazing product a year, and that scale is completely changing as they plan to release twelve new products. As they move from the little boot-strapped consumer electronics startup that could into the fast lane, Carl Yankowski might just be the right person to guide them.

I've only talked to Carl a handful of times, but he seems like a natural fit. Carl is the former President of Sony Electronics (where he launched the Playstation), as well as former CEO of Palm, an exec at GE (where he coined, "We bring good things to light."), and happened to be CEO of video game publisher Majesco when they published one of my favorite games of all time, Psychonauts. Although a controversial figure, he's a brand wizard taking over a consumer brand that is poised to explode.

It's going to be fun to watch.

Comments

[Sulka]

Toyota has an interesting approach to this - AFAIK they always dig the execs from within the company. If there's nobody available with the qualifications, they take the best guy available and train him until he's qualified. Given their track record, it seems to work pretty well.

[Greg van den Dries]

Carl? Didn't he ruin Palm single handedly? Ugh, things must look bleak over there or someone fell asleep at the recruiting wheel.... JMO.