Episode Summary
In this week’s episode of Equity, Haje Jan Kamps and Mary Ann Azevedo delve into the recent decision by fintech company Brex to abandon its co-CEO model. They discuss the challenges that come with having two CEOs and how this change aims to enhance agility and appeal to investors as Brex eyes a potential IPO.
The Co-CEO Model at Brex
Brex, founded in 2017 by Pedro Franceschi and Henrique Dubugras, initially thrived under the co-CEO structure. However, as the company grew, this setup began to slow decision-making. To address this issue, Brex has recently shifted to a single-CEO model, with Franceschi leading as CEO and Dubugras becoming chairman of the board.
The Challenges of Co-CEOs
Having two CEOs can create several challenges for a company. Some of these challenges include:
- Slow decision-making: With two leaders making decisions, it can take longer to reach consensus, which can slow down the pace of the business.
- Conflicting priorities: When two people are leading a company, they may have different priorities and visions for the future, which can create tension and conflict.
- Lack of clear accountability: With two CEOs, it can be unclear who is ultimately responsible for decision-making and leadership.
Why Brex Abandoned its Co-CEO Model
Brex’s shift to a single-CEO model aims to address these challenges and enhance agility. By having one leader at the helm, Franceschi will be able to make decisions more quickly and efficiently, which can help drive growth and innovation.
Additionally, having a single CEO can also make it easier for investors to understand who is leading the company and what its vision is. This can be particularly important for companies like Brex that are eyeing a potential IPO.
Other Companies with Co-CEO Models
Brex is not alone in adopting a co-CEO model. Several other companies have also experimented with this leadership structure, including:
- Microsoft: In 2014, Microsoft announced that Satya Nadella would be its new CEO, while Bill Gates and Steve Ballmer would remain as co-chairs of the board.
- IBM: In 2017, IBM announced that Ginni Rometty would be stepping down as CEO, with Arvind Krishna taking over as president and CEO. Meanwhile, John Kelly III became the company’s new vice chairman.
- Salesforce: In 2022, Salesforce announced that Marc Benioff would be taking on a more prominent role as co-CEO, while Bret Taylor would become co-CEO.
These companies have all had varying degrees of success with their co-CEO models. However, it’s worth noting that each company is unique and has its own specific needs and challenges.
Conclusion
The decision by Brex to abandon its co-CEO model raises important questions about the effectiveness of this leadership structure. While having two CEOs can create several challenges, including slow decision-making and conflicting priorities, it can also bring benefits such as shared vision and expertise.
Ultimately, whether a company’s co-CEO model is successful will depend on various factors, including the personalities and working styles of its leaders. As Brex continues to grow and evolve, it will be interesting to see how this change impacts its success.
Equity is TechCrunch’s Flagship Podcast
Equity is produced by Theresa Loconsolo and posts every Monday, Wednesday, and Friday. If you want to hear more about the latest developments in the world of startups and venture capital, be sure to subscribe to Equity on Apple Podcasts, Overcast, Spotify, or your favorite podcast app.
You can also follow Equity on Twitter at @EquityPod and Threads at @EquityPodThreads. For the full episode transcript, check out our full archive of episodes over at Simplecast.
About Our Hosts
Haje Jan Kamps is a general tech reporter at TechCrunch. He has founded several companies to varying degrees of success and has been a journalist and TV producer since the dawn of his career.
Mary Ann Azevedo is a senior reporter at TechCrunch, covering venture capital and startups. She has more than 20 years of business reporting and editing experience for publications such as FinLedger, Crunchbase News, Crain, Forbes, and Silicon Valley Business Journal.
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