Why Startups Need One CEO and Clear Accountability

Summary:

Why co-CEO arrangements rarely work and what startups should do instead

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In the world of startups and high-growth ventures, founders often start off as a unified front, brimming with optimism and shared vision. It seems natural then, to think, "Why not just share the CEO role?" After all, if you both built the company, why shouldn't you both wear the crown? But history—and investor horror stories—suggest otherwise.

The Illusion of Balance

A co-CEO arrangement sounds like a thoughtful solution to power struggles. In reality, it's a fast track to confusion. Without clear decision-making authority, companies often face delays on critical issues, blurred lines of accountability, and a leadership team divided by loyalty rather than function.

According to a 2020 Harvard Business Review report, fewer than 5% of Fortune 500 companies have ever used a co-CEO structure. And most of those who tried it—like Salesforce and SAP—eventually dropped it after internal frictions and decision bottlenecks.

One Vision, One Voice

Startups thrive on speed, clarity, and adaptability. None of these traits are served well by indecision at the top. Employees don’t want to guess which CEO they’re supposed to impress. Investors hate unclear chains of command. And the media will inevitably speculate about internal power struggles.

In fact, when Whole Foods had co-CEOs, founder John Mackey ultimately admitted the structure only worked because the other co-CEO deferred to him in most situations. That’s not shared leadership—that’s disguised hierarchy.

Data Doesn’t Lie

• In a study published by Stanford's Closer Look Series, researchers found that co-CEO structures increased the risk of executive turnover by up to 40%.

• The National Bureau of Economic Research found that founder disputes (many stemming from shared executive power) are among the top three reasons for early startup failure.

Real-World Fallout

One of the most notable failures of this structure was at BlackBerry, where co-founders Mike Lazaridis and Jim Balsillie both served as co-CEOs during the company's fall from mobile dominance. The lack of a single strategic vision is often cited as a key reason for BlackBerry's inability to adapt.

Then there's Wework. While Adam Neumann was technically the sole CEO, much of the chaos stemmed from unchecked founder authority—ironically the opposite of a co-CEO structure. But it shows how problematic it is when executive control isn't well-defined.

A Better Model: Defined Roles

Rather than split the CEO title, split the responsibilities. One founder can take the CEO title and focus on vision, growth, and external communications. The other can lead product or operations as COO or President. This structure allows co-founders to retain influence without sacrificing clarity.

As Fred Wilson of Union Square Ventures once wrote: “You need one person at the top who owns the decisions. Everyone else can weigh in, but there must be a decider.”

When It Might Work

There are rare cases where a co-CEO structure has survived. Warby Parker has made it work due to long-term friendship, complementary skills, and clearly defined roles. But even they admit it requires constant communication, strong personal trust, and mutual restraint.

Startups are hard enough. Adding power ambiguity at the top only invites more stress. A single, accountable CEO is not a slight against co-founders—it's a step toward sustainability. If you truly believe in your shared vision, prove it by defining your roles, not duplicating them.

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