Titles are your cheapest and most expensive thing

It’s tempting to hand out a VP title at a small startup. Here’s why you shouldn’t.

665 words • 4 min read

You’ve just interviewed a candidate you’re incredibly excited about. They have an amazing background that’s relevant to your business, they’re excited about your mission and vision, and you’re confident that they’re going to do a great job.

When you present the offer, your dream candidate says that the compensation looks good—both cash and equity are reasonable—but there’s a catch. They want to be “VP of Engineering”.

Your initial thought is probably: “Well, it doesn’t actually cost me anything—let’s just go for it if that’s what’s needed to get the candidate on board.”  

Here’s why I wouldn’t make this decision casually:

It sets a precedent, both for your existing team, and for any new hires. Are there existing employees on your team who will be peers to this person, or who will operate on the same level as this new hire? If so, you’re setting yourself up for some major confusion and awkward conversation in your next one-on-one with them (“Why is so-and-so a VP but I’m not?”).

This is doubly true for anyone else you subsequently hire. “I see that you have a VP Eng with XYZ experience, I feel like I’m comparably experienced, shouldn’t I therefore be VP Product?”

Said another way, when you pick a title for a candidate, you’re not just making a decision about this one candidate—you’re making a decision that binds you for all members of your team going forward.

It may not set your new hire up for success. Being “VP of X” shouldn’t be a perk that helps you close a candidate. You owe it to yourself and your team to honestly ask: is this person actually capable of operating at the VP level? 

If they can’t, you’re setting future-you up for a bunch of pain, and you’ll have to pick between two options. The first is that you part ways with them—painful for everyone, and especially heartbreaking if they would’ve been able to thrive at the company as a really great “Director of”.

The second is that you hire a more seasoned executive over them, who they would then report to. (This is frequently called “leveling”.) Leveling is generally a low-morale moment for the person being leveled—they may quit—and there’s also a pragmatic problem: what title do you give your new person? SVP Engineering? Seems a bit much for your 20-person startup…

To avoid creating this scenario for yourself, you need to answer two questions when determining someone’s title. (And separately, the time to do this is not when you’re making the offer—you should be thinking through it when you craft the job description and begin hiring for the role.)

1. What are this person’s actual responsibilities? The job title should reflect the role. If you’re looking for a zero-to-one individual contributor, “VP” is absolutely the wrong title for them. In fact, I’d suggest that, in the earliest days of a given function, you may not want a “VP” at all—your early team should be made up of hands-on folks who are excited about rolling up their sleeves to help you build something from scratch.

2. Are you open to “take a chance” on a candidate? Will you be able to provide them the support they need to grow into the role? If you really want to give the VP title to the up-and-comer candidate, you need to have high confidence that they’ll be able to grow into the role. Set everyone up for success by making your expectations clear—both with the candidate and with the team—so there’s no ambiguity about what “good” looks like.

It’s easy and tempting to hand out VP titles when your team is small. It seems inconsequential in the short-term. But titles are actually your cheapest and most expensive thing—cheap because it technically costs nothing, and expensive because of how precedent-setting it is for the rest of the organization going forward. Be principled and thoughtful about how you give out titles; you’ll be saving yourself a lot of pain down the road.