I think he’s wrong here. Job titles serve two real purposes. To denote rank and to represent what rank someone had at a previous company so they can get other jobs at that level.
The first need exists in any company with more than one person in a department. Once you get a second person you need to have someone be in charge in case there’s a dispute. So rank is valid for companies of virtually any size.
On the second point you don’t want your employees to take a hit by working for you. The problem with calling everyone a “member of the sales team” as he suggests is that you create a hole in someone’s resume where it looks like they dropped in rank for some reason (VP of Sales to Member of the Sales Team). In a tough job economy that perceived hole could be enough for a company to pass the resume over. So stripping people of rank becomes a disincentive to your employees.
Startups are a different animal from big companies. That I agree with. But they still live in the same world and in this world, for better or worse, titles are important.
I wonder to what extent rank is used as currency. If holding the title 'VP of Sales' can raise one's earning potential, it's worth something. Part of your implicit package could be title.
A very short and very instructional video, from someone who has been in the trenches.
My own experience is that most entrepreneurs do not understand is that building startups is not just about building products and features but about mitigating risks for your customers. Until you can successfully do that, no one can put their career and their families at risk by buying your products.
So the best way is to get all your co-Founders and early employees together and have them focused on what it takes to best serve your customers. When you can do that then you will find that customers do expect a CEO and a bunch of VP's because their managers (who must approve the purchase) expect the same. So this is about helping your customers who are becoming your champion within their organization.
But the trick is to make sure that everyone on your team knows that their titles and positions are only temporary (including the CEO) and their job is to build the company to the point when they can find their own replacement.
The first need exists in any company with more than one person in a department. Once you get a second person you need to have someone be in charge in case there’s a dispute. So rank is valid for companies of virtually any size.
On the second point you don’t want your employees to take a hit by working for you. The problem with calling everyone a “member of the sales team” as he suggests is that you create a hole in someone’s resume where it looks like they dropped in rank for some reason (VP of Sales to Member of the Sales Team). In a tough job economy that perceived hole could be enough for a company to pass the resume over. So stripping people of rank becomes a disincentive to your employees.
Startups are a different animal from big companies. That I agree with. But they still live in the same world and in this world, for better or worse, titles are important.