Why that VP Title might be a problem

12 Apr

Job titles are free to give, but costly to take back

When you’re in the start-up phase and money is tight, it’s hard to compete for the best talent against bigger companies with deeper pockets. Stock options are a good alternative, but they are an uncertain and longer term promise. As a result, founders often look to job titles as an incentive to win someone over.

You’re hiring your first marketing person. You can’t afford a big salary, so you offer them the title 'CMO'. It feels like a win-win, until you actually need a real CMO 18 months later."

Is this common?

Sadly, yes. As well as for the reasons for above, you may feel that the person who joined early on and took a chance on you and has been unwaveringly supportive all this time deserves an elevated title. You can’t give them the salary you’d like to give them, but you can give them a promotion to show how much you appreciate them.

Or it may be that they are a brilliant engineer for which your product owes its very existence and giving them the title of CTO reflects that. But a CTO isn’t just a good engineer, they are also a leader and someone who has a central role and ownership in the strategic direction of the company. Just because they’re a great engineer, that doesn’t necessarily make them a great leader of a critical function of a business.

It may just be that ‘well this is easy for me to do and it means a lot to them, so why not?’. Especially if the company is small and there is no clearly laid out hierarchy yet. It just feels like worrying about consistency of job titles across the company when you have 50+ would be a great problem to have, so worry about it if it happens, not now when you are 6 people and struggling to keep the lights on.

But here’s where you’re wrong.

The inevitable pitfalls

Most mistakes in business can be reversed. Maybe you put your prices up too high… bringing them down again, is painful, but OK. Launching a new product feature that didn’t work is embarrassing, but you can fix it and explain. But anything involving people is multi-faceted and often unpredictable.

Telling someone that their job title is switching from CMO to Head of Marketing, after they’d told their friends and family that they were the CMO of an exciting tech startup is going to be received badly.

Heck, even telling a VP Marketing that you are bringing in a CMO when they thought that job title was morally theirs when the position arose, is hard.

But then, you’ve also got to think about anyone coming in. A real CMO, who sees on LinkedIn that one of the people they are going to be managing is currently called the CMO? That has got to be a red flag. At the very least it suggests that they will have someone unhappy and likely highly critical in their team. But it also points to the fact that the founders don’t know what they’re doing.

Investors, too, will 100% want to look at the senior leadership team. If they can see that there is someone there who has got an elevated title just because they are loyal and long-standing, they won’t like it. It will lose you credibility in their eyes.

In addition, I’ve found that if it’s not properly planned from early on, you start to get weird hierarchical anomalies. You might get a load of people in the engineering teams with Director in their title, on the same hierarchical level as people in the sales and marketing team with Manager in theirs. This causes a morale problem that needs to be addressed either by promoting people to Director or demoting them to Manager. Promotion implies salary rise, demotion implies constructive dismissal. It’s a nightmare. Even if you find a happy compromise, people are never rational especially when it comes to job titles, promotion, salaries etc

All this confusion that could have been avoided if you didn’t ignore it when you were a small company.

What should you do to avoid this trap?

Here’s how to think about titles more strategically — without creating unnecessary hierarchy or blocking future growth.

1. Titles should reflect Scope, not Aspiration

In a small startup, everyone wears multiple hats. That doesn’t mean everyone needs an inflated title to match. Titles should reflect what someone is actually responsible for, not what you hope they’ll grow into.

If someone is running all of marketing today, that might feel like a VP Marketing material. But if they’re still early in their career and not yet shaping strategy, managing a team, or owning a budget, a more grounded title like ‘Marketing Lead’ or ‘Head of Marketing’ leaves room to grow without overcommitting.

2. Leave Room to Grow Titles as the Company Matures

When you call your first engineer the CTO, where do you go from there?

As discussed, it’s a lot harder to downgrade someone’s title later because we’re dealing with people who have emotions. Much easier to promote them as the company evolves. Give yourself some room so, if they do step up, you have somewhere to go with them. Because the alternative if you later need to bring in someone more senior, is either to invent a weird title for the new hire (Global CTO? ), or have that awkward conversation about how the company’s needs have evolved. Neither is fun. Better to build in headroom from the start.

3. Use ‘Head of’ or ‘Lead’ as flexible, high-trust titles

These titles are perfect for early hires:

They signal trust and responsibility.
They’re understood to be temporary and flexible.
They scale up or sideways as the org grows.

You can always evolve a ‘Head of Growth’ into a VP or CMO role later and they’ll feel like they earned it.

Plus, employees who push for inflated titles early on (ie they’ve come from being a Marketing Manager in their previous job but feel they should be a CMO with you) may be more focused on ego than on impact. Treat this as a filtering mechanism.

4. Define titles in terms of responsibility, not status

Even if you’re tiny, write out what a Manager, Director, Head of, or VP means at your company.

For example:

A Manager runs a process and maybe one or two people.
A Director shapes strategy for a function.
A VP owns the function and reports to the CEO.
A C-level owns company-wide strategy and cross-functional alignment.

This clarity helps you make consistent decisions and it gives early team members a roadmap for how they can grow into bigger titles over time. Consistency is absolutely key and avoids any confusion or misapprehension down the line.

5. Be Transparent about the trade-offs

If you’re offering someone a lot of responsibility but not a high salary, say that out loud. Let them know you’re not handing out titles loosely because you care about building a thoughtful, scalable org and that you’ll revisit their title as the company grows.

People respect that. It signals that you’re building for the long term and that you take their career seriously.

Job titles are easy to give and hard to take back.

In the early days, it’s tempting to hand them out like candy to reward loyalty, close a hire, or avoid an awkward conversation. But titles shape expectations, influence future hiring, and impact how your company scales. Taking a bit of time now to be thoughtful: using flexible titles, defining what roles really mean, and leaving room to grow, will save you from painful trade-offs later. Your future self (and your team) will thank you.

David Hart