I’ve worked for organizations of every size, from being employee #1 to starting at #25 to a massive US federal department. Further, I’d advised companies starting from a single founder to a couple hundred employees. From being on every side of that, one of the things I’m most sensitive to is job title but probably not for the usual reason:
In many places, a job title denotes authority.
When a “Managing VP” gives you an instruction, you better jump or update your resume. If a “Senior [whatever]” makes a decision, that’s the way it is until the “Super Senior [whatever]” comes along with their own whims. In especially bureaucratic organizations, this turns into fiefdoms. God help you if you try to talk with Bob before clearing it through the “Assistant Deputy Manager of People Named Bob.”
Within startups – especially when you’re small – job titles are almost irrelevant. Yes, there should be a CEO but beyond that, most people will have a core area they focus on and a few areas they help in. The title is less important than getting the right work done at the right times and knowing who’s focused on what. Or to put it another way: Everyone takes out the garbage.
Some companies try to take this to an extreme and have a handful of CxO titles and that’s it. I have a friend who’s entire team simply had the title “Developer” which led to other problems..
So why are titles important?
First, titles draw boundaries on where authority begins and ends. This applies to hiring & firing, budget priorities, and decisions in general. You won’t go to the VP of Engineering to approve Google Ads or the CMO to choose a CI/CD system.
When things are going smoothly, cash is flowing, and everyone is happy, people will forget about this to the point where dumb things happen. That launch party will be a little too big, that marginally qualified friend will get hired, or someone will embarrass themselves in front of a customer.
That’s when titles suddenly become important again. You need to know who can and can’t authorize that bill, who can and can’t fire that employee, and who should fix that problem with the customer. And of course the problem doesn’t have to be as large of those, it could be an everyday situation. A simple disagreement between two colleagues may require someone higher up to make a decision and settle it. Without titles, no one is quite sure who can make the final call and who should respect it.
Second, you’ll need titles for recruiting. While there isn’t a standard cross-company definition for most roles in technology, there is quite a bit of signaling through titles. A Director is higher than a Senior but a Senior Director is higher than both. If someone was a Senior XYZ in their last job, they’ll want at least that in their new job. Even if it doesn’t come with more authority or prestige, that doesn’t matter as long as someone can put it on their resume.
The only exception is moving between companies of wildly different sizes. Being the CTO of a 10 person startup does not cleanly translate into being CTO at a 100, 1000, or 10000 person company.
Finally, you’ll need titles to open doors outside your organization. In my last job, I took “Director of Product” as my title. There were only 6 of us and I had my area of focus, so it had zero value internally. But when I needed to contact any large company and get ahold of the right person, having “Director” in my title got the job done. During my time there, I could get through to other directors with a single email, VPs with a couple, and anyone below them with effectively no effort. This included everyone from other startups to 100k+ employee companies and everyone in between.
Which titles should a startup have?
In short, it depends.
For a more useful answer, you need a CEO but everything else can be fluid. More than anything, I’d recommend treating titles as another positioning opportunity for any outward facing job. If you know how your customers and partners buy, talk, and describe themselves, match them as closely as you can.
If you don’t know how your customers buy.. that’s a different problem.