A quick assessment of Airbnb’s $25 billion valuation would give the credit to CEO Brian Chesky, its public face, and the hospitality startup’s other young cofounders.
But that gives short shrift to the pivotal role of its behind-the-scenes operators, such as the company’s first executive hire, Belinda Johnson, its chief business affairs and legal officer. A profile of Johnson published on Medium on Wednesday (July 13) describes her as “Airbnb’s Sheryl Sandberg,” a nod to one of the most powerful partnerships in Silicon Valley (more on that later). LinkedIn CEO Jeff Weiner, whose company was just sold to Microsoft for $26 billion, tweeted about the profile:
The tech press has long propagated the myth of the Ayn Rand-ian founder who carries the world on his shoulders. Founders also work hard to fit and perpetuate the stereotype. But as Jessi Hempel, who wrote the Johnson profile, points out, “Many of Silicon Valley’s most successful companies trace their explosive growth to this type of strong founder-operator relationship.” We don’t see these stories all that often because most of the operators work outside of the spotlight. It’s the very nature of their jobs. “Steve Ballmer was a relative unknown until Bill Gates handed him the CEO throne,” Hempel wrote. “No one knew much about Tim Cook until Steve Jobs died.”
The relationship between Facebook founder Mark Zuckerberg and COO Sheryl Sandberg is now widely credited with being a key factor in the company’s success. In addition to Sandberg’s near decade-long career as a VP at Google, part of what makes the relationship so constructive is that there is transparency and a constant feedback loop between the two.
“For the first few years, we stuck to this routine and met every Friday afternoon to voice concerns big and small,” Sandberg has shared. “As the years went by, sharing honest reactions became part of our relationship, and we now do so in real time rather than waiting for the end of the week.”
Silicon Valley’s most successful partnerships were borne out of mutual respect and recognize the limitations of a sole founder/CEO. Zuckerberg has said that he only hires people that he would work for himself.
That sort of relationship was also behind the growth of online retailer Zappos and its acquisition by Amazon. The combination of its visionary CEO Tony Hsieh and his college friend CFO/COO Alfred Lin, who is credited with having the “Midas Touch” for his effect on every company he has joined, is what scaled Zappos into a billion-dollar company. Lin, who left Zappos to join Sequoia Capital in 2011, describes his relationship with Hsieh as that of sparring partners.
“I’ve worked with Tony for a long time,” says Lin. “He doesn’t like for people to say no to him. If you think it’s a bad idea and you just say ‘no,’ it’s really not a satisfying thing for anyone and it’s certainly not a satisfying thing for Tony. The best way to work with Tony is to help him refine his ideas as opposed to just saying ‘no.'”
Hsieh is known to be won over by loyalty, and Lin was never really replaced after his departure. Since then Zappos has become highly reliant on its cult-like leader, which has led to climbing attrition, stalled growth and innovation, and lack of cohesion around the direction of the company. Hsieh’s longtime business partner, Fred Mossler, departed the company in June. Without a genuine No. 2, there has been no one to challenge Hsieh’s ideas or the way that they are implemented. That vacuum is also a major reason behind the freewheeling culture that led to the quick depletion of his $350 million investment in downtown Las Vegas.
There are plenty of large companies that don’t have a designated COO, and investors who don’t see the necessity for one at a fast-growing startup. The scope of the COO position is highly ambiguous, but it’s generally understood to be the role that carries out the vision and serves as a counterweight to the CEO. They push back against instinct-driven decisions with data and identify what problems need to be addressed immediately and which ones are less urgent. Former Square COO Keith Rabois (who resigned amidst scandal) described his role as the equivalent of an “emergency room doctor.”
Because they take a backseat and largely operate behind the scenes, the best COOs operate without ego. The late psychologist and management theorist Harry Levinson put it this way: ”The relationship between the chief executive officer and the chief operating officer in any organization is fraught with many psychological complexities. Perhaps it is the most difficult of all organizational working relationships because more than others, it is a balancing act on the threshold of power.”
Some CEOs simply don’t want—or can’t handle—having a check on their power. Last year, Emily White, who had been considered the Sheryl Sandberg of Snapchat, left the messaging startup. As Fast Company reported: “The consensus is that [CEO Evan] Spiegel, who is prone to change his mind, realized he didn’t want a COO interfering with his control of the company.”
Airbnb’s Chesky likens Johnson to a “secretary of state” who has changed his perspective around strategy and risk. She also won him over by finding a way to consistently say “yes”—that is, through finding a way to make the impossible seem possible.
Investors place their initial bets on founders, but the long-term vitality of a business hinges upon the strength and wisdom of its team.