पाठशाला Pathshala · दल Dal, The team · Lesson 18 · Build

Building the leadership team: when, who and the first VP

The first leaders a company hires decide how it scales. Which function needs one first, why big-company executives often fail in small companies, and how to hire someone who has done a job you have not.

Pathshala, The Founder Library · 11 October 2026 · 7 min read

Tower cranes reaching into a blue sky with scattered clouds. — Photograph: Pixabay · Pexels

Somewhere between twenty and fifty people the founders stop being able to run every function themselves, and the company starts hiring leaders. The first two or three decide how it scales: whether the founders’ judgement is multiplied or diluted, and whether the next fifty hires are made by people who know what good looks like.

This lesson covers when a function needs a leader, which one usually comes first, why big-company executives so often fail in small companies, how to hire someone who has done a job you have not, and how to turn individual leaders into a leadership team.

When a function needs a leader

A function needs a leader when a founder has become its bottleneck: decisions wait for them, the people in it cannot grow because nobody above them knows more, and the founder is spending hours on it that the company needs elsewhere. The [bottleneck lesson](/library/founder-as-the-companys-bottleneck) has the test. A function does not need a leader because it has five people in it, because a competitor has a VP of it or because an investor asked who runs it.

Molly Graham, who scaled teams at Facebook and Quip, advises hiring strong leaders as early as you can and helping them grow as the company grows. The reconciliation is in the word strong. An early leader who has done the job before saves the company years; an early leader hired to fill a box costs it the same years in the other direction.

Which function first

Jason Lemkin gives a rough order for software companies by revenue: marketing first, as early as $20,000 of monthly recurring revenue; sales by about $1 million of annual recurring revenue; customer success at $2 million to $3 million; product at $4 million to $5 million; engineering at $8 million to $10 million. The logic is that founders usually build the product themselves and need help first with the work they are worst at, which in a technical team is finding and closing customers.

Treat that as a shape, not a schedule. An Indian company with a sales-minded founder and a fragile platform should hire the engineering leader first. A services-heavy business may need operations before anything else. The rule underneath Lemkin’s order is the one that matters: the first leader goes where the founders are weakest and the constraint binds this year. The [first ten hires lesson](/library/first-ten-hires-who-and-in-what-order) uses the same logic for individual hires. For sales in particular, the [sales leader lesson](/library/hiring-first-sales-leader) has the timing signal and the arithmetic.

A worked case. Two technical founders in Pune run a business software company of thirty-five people. One founder still writes the hardest code and reviews every release; the other closes every large deal and runs customer onboarding on the side. Sales is growing but every deal above ₹10 lakh a year waits for the second founder’s calendar, and two customers churned last quarter after onboarding that nobody owned. The bottleneck is not engineering, where the founder is strong and the team is learning from them. It is the second founder’s week, split between selling and fixing what selling promised. The first leader is a head of customer success, who takes onboarding and renewals and frees the founder to sell for two quarters until the case for a sales leader is clear. The org chart would have said VP engineering. The constraint said otherwise.

Why big-company executives struggle in small companies

The tempting hire is the senior leader from a large company: a famous logo, a big team, a confident manner. Ben Horowitz names two mismatches that sink them. The first is rhythm. Big-company executives are trained to be reactive, to wait for the meetings, the emails and the decisions to come to them; at a startup nothing comes, and a leader waiting for it stalls the company while the team watches. The second is skill. Running a large organisation is about managing complexity and improving processes that exist. Building one means recruiting personally, being the quality bar on the craft and writing processes from nothing.

Neither mismatch shows in a CV, so screen for them. Ask what the candidate would do in the first month: an answer that is mostly about learning suggests they think the company is more complicated than it is, and an answer with more initiatives than you expected is a good sign. Ask how this job differs from their last one, and listen for self-awareness rather than confidence that everything transfers. And ask why they want it. Horowitz’s line is that one per cent of nothing is nothing: a candidate drawn mainly by equity is the wrong one. The right one wants to spend more time creating than running.

Hiring for a job you have not done

The hardest part of hiring the first VP of anything is that the founder does not know what good looks like. Horowitz’s method has three steps. Know what you want, by acting in the role yourself for a few weeks, running its meetings and setting its targets, and by talking to people who do the job well. Run a process that finds the match: written strengths and tolerable weaknesses across functional excellence, operational skill, strategic contribution and team effectiveness, a question for each, interviewers chosen for what they can judge and references taken by the founder, including people the candidate did not name. Then make the decision alone, because only the founder holds all the criteria at once.

Two Indian details. Titles carry weight in Indian hiring and are hard to take back, so give the first leader the title the job deserves at today’s scale, head of rather than VP if the next hire will sit above them. And price the role with equity that rises with seniority, inside a pool sized for the next three leaders, not just this one; the [ESOP lesson](/library/esop-design-pool-grants-strike-price) has the arithmetic. Work through the steps below.

Hire the first leader where a founder is the bottleneck, after doing the job yourself long enough to know what good looks like. Then give the job away.

From leaders to a leadership team

A leadership team is not a set of leaders who report to the founder. It is a group that decides together on the things that cross functions: priorities, hiring, money and who gets promoted. Three habits make the shift. A weekly leadership meeting with a written agenda and written decisions, which the [operating cadence lesson](/library/founders-operating-cadence) builds into the week. Shared goals for the quarter that no single function can hit alone. And founders who give the work away.

An empty four-person rowing boat moored on calm water. — A leadership team is four people pulling in time on the questions that cross functions, not four leaders each reporting to the founder. Photograph: Diana ✨ · Pexels

That last habit is the hard one. Graham’s phrase for it is giving away your Legos: in a company growing fast, she argues, people have to hand over their job every few months to grow at the pace of the company. Founders feel this more than anyone. A founder who hires a head of engineering and keeps reviewing every pull request has hired a deputy, and good leaders do not stay deputies for long. Hand over the work visibly, tell the team who now decides, and move to the problem only a founder can solve.

Expect the first leadership meetings to be polite and the next ones to be hard. A leadership team that never disagrees is either not deciding anything or deciding it elsewhere, usually in the founder’s one-on-ones with each leader. Bring the cross-functional questions into the room, ask each leader for a view before the founder gives one, and write the decision down with who disagreed. Leaders who see their disagreement recorded and then the decision carried out together learn that the team is where things are decided. Leaders who see the real decisions made in private learn to lobby the founder instead.

The leadership review

For each new leader: targets for day thirty and day ninety written before the search, a verdict written at each, and the founder’s own check at day ninety on whether they have actually stopped doing the work they handed over. Horowitz suggests letting go of an executive who is not up to speed within thirty days; most founders wait far longer, and the team notices. The cost of a wrong leader is larger than the cost of a wrong individual hire, because a leader hires: every month a weak leader stays, they recruit people in their own image and the problem compounds.

Every quarter, the founders ask three questions of the leadership team as a whole. Which function now has a founder as its bottleneck, and is it time for its leader? Which leader has outgrown their role or been outgrown by it? And is the team deciding together, or is every cross-functional question still coming back to a founder? Write the answers down. The leadership team a company has at a hundred people is the sum of these quarterly answers.

Revenue markers are for software companies and are rough; the bottleneck test is the one that travels.