The Case Against Non-Technical CEOs

by Michael Belkin

Thousands of ideas are envisioned each day, but only a select few come to fruition. Despite a CEO’s wide-eyed optimism for finding the perfect idea, early stage entrepreneurship is largely about execution. Consider Facebook vs. MySpace, Google vs. AltaVista or Dropbox vs. every previous online backup solution. One doesn’t have to look far for companies who have established themselves not by inventing new business models, but by excelling on superior execution. While some businesses can outsource IT or cordon it off to a skilled CTO, the more a company relies on its technology the more important it is that the founders have technical backgrounds. I propose a simple test, if your business can’t serve a single user or customer without software, the founders should know at least the basics of coding.

As access to capital and business advisors increase, the relevance of non-technical CEOs continues to diminish. With the seed of a good idea and a couple all nighters, an engineer can create a beta, iterate, and have thousands of users (plus usage analytics) before an MBA can say, “pitch deck.” It’s really like an architect who doesn’t know structural engineering. Though one can create beautiful pictures, an architect’s success comes from creating landmark buildings, not drawings. Further, the artistic vision is often influenced by what is physically possible, and knowing the practical implications of seemingly minute decisions can make the difference between a project being scrapped or built.

This isn’t to say that business training is useless to a startup. The ability to critically think about a business model, problem solve, form partnerships, and focus on a greater and profitable vision is essential and something that MBAs are more equipped to accomplish than their tech savvy cohorts. While a group of engineers can often fall into the trap of locking themselves in a room and over-engineering, the businessman’s “voice of reason” often helps a young company define its hypotheses, stay lean, and become profitable.

Commonly, bidding CEOs hope to find the right technical co-founder to implement their vision. However, this can prove to be difficult for an early stage venture with little funding and an untested concept. Engineers can create amazing products because they code projects they are passionate about. Inevitably some of that excitement is lost when one is implementing another’s vision.

An MBA who knows how to code can quickly apply his business acumen to define a business model, create an MVP, iterate, attract users and get investors. Further, understanding the software developer’s mindset is critical to a CEO’s ability to manage a technical team and grants her respect in the technical community. Given these benefits, one would expect an into computer science course to be on every tech-entrepreneur focused MBA’s checklist. However, only recently have business schools started to embrace this view. Instead of asking students to fight against the grain, business schools should support and encourage students to supplement their learning with such practical training and thus regain the relevance of the MBA as technical entrepreneur.