The Title Trap

For the last few years, low cost of capital (absolute interest rates + generous VC rounds) drove a high rate of salary inflation in startups. It effectively became cheaper to throw money at attracting and retaining desirable candidates.

Titles, however, have always felt cheap: giving out a “Director” or “Head of” doesn’t show up on your balance sheet, so title bumps have long been a routine way to get a someone over the hump and into the company.

For employees, while it might look great in the moment, taking on an inflated title creates a massive risk: even if you’re operating at the absolute top of your license, you may not grow as fast as the company, wind up under-performing relative to expectations, and actually set yourself back.

Let’s illustrate this with a story, based on true events:

You are coming off an awesome 2-year run at a hot startup. You got in early, were promoted from IC to Manager, and your three-person team is in a great groove. With a recent leadership change, however, your role has been layered and narrowed, and the company is starting to feel too big anyway.

You start looking for a new challenge, and immediately get a bunch of bites: everyone seems to need your very hard-to-hire-for skillset. You crush the interviews, and get offers from several high-momentum, early-stage startups.

They’re similar in comp and title: “Manager”, which is the same as you have now. You’re worried that this looks like a “lateral” move – isn’t everyone expecting you to get a title bump when switching roles? After all, you’re the first one in the function, and will be working really hard.

You put this on the table with your suitors, and one of them offers you a “Head of” title. It's not the role you're most excited about, but the title is great. You start the new gig, update your LinkedIn, and watch the congratulations pour in 🎉

Was this the right move?

It was certainly riskier than you might have realized!

It starts fine. You’re mostly doing hands-on work, and the Founder appreciates someone who can take things off their plate. You’re enjoying learning and working in early-stage.

A month in, the Founder hires a peer “Head of” to run another function. Looking at their profile, you can see 6 more years of experience, and a previous role with a “Head” title. Within their first month, they immediately bring in two people that used to work for them, roll out a new team charter, and are invited to present at the next board meeting. You haven’t done any of these things - you didn’t even know you were supposed to be!

As an ever-more senior leadership team is built around you, it’s clear that you and your function is lagging behind. It doesn't matter that your role was originally "Manager" with a title cherry on top - you're implicitly compared to your peers with similar titles. You start to feel insecure, which leads to imposter syndrome, which spirals into performative work and indecision. It's unfair: you’re working hard and want to succeed, but there are things you just don’t know how to do yet, and the Founder doesn’t have sufficient time to coach you.

Finally, 10 months in, the Founder kicks off your 1x1 with a tough conversation: they’ve decided that it isn’t working, and are going to be bringing in a new person to run the function. They offer to let you stay on as a Manager, or take generous severance. Neither of these feel great, and you feel like you messed up a big opportunity.

Now imagine the counter-factual:

You take the “Manager” title at the other company you're more excited about, and had the same great first few months. You’re crushing it on the ground, grow a team, and learn a ton from the new team members, including some really accomplished leadership hires.

You know there’s more to be done, however, and 8 months in, the Founder comes to you and says they’re going to be hiring a “Head of” to scale the function. You work together to find someone great, and spend the next year learning a ton from them.

Just over a year in, you get promoted to Director to run a bigger team. You have now shown another in-place promotion, demonstrated leadership, and are set up perfectly to take on a “Head of” role at this or your next company.

This feels like the better outcome, no?

I’m not here to say you should never take a better title.

If you are confident you can meet the expectations, you should do it; there are also risks from being too risk-adverse.

But taking a precocious title comes with real challenges. For the foreseeable future, you’re going to be playing catch up and trying to execute above your experience level. As the company hires peers (whether Directors, Heads, VPs, etc.), it will raise the bar for you, and if you can’t keep up you will stand out as the weak link. This generates insecurity and vulnerability, and mean you can get fired or layered.

Even for really amazing people this creates an accelerated Peter Principle situation: you have leapt forward to a place of relative incompetence, even if you would have done great in that role later on, and/or are doing great relative to your experience and aptitude.

Title inflation is about appearances - but create an appearance trap of their own. Titles are a one-way ratchet, so taking a stretch title creates an ego trap: if you take the “Head of” title now, and it doesn’t work out, would you consider going back to a right-size “Manager” or “Director” role? How would that look?

You’re also foregoing the opportunity to show in-place promotion. Being given a new role within a company is an indicator you came in, built something of value, and stayed long enough to reap the rewards. Contrast this with a candidate with a history of “one role” 12-24 month stints on their profile, which many hiring managers will see as a red flag.

But what about comp?

I have been avoiding the six-figure elephant in the room: compensation. Cash and equity - the two pillars of startup comp - can have big jumps between job roles and titles.

Everyone's financial situation is different, so generic advice here is hard. That said, I often see people optimizing for short-term cash in a way that could harm them in the long-term. Coming into a role where you're not set up to succeed doesn't do you or your career any favors. Your tenure will be short - potentially not even hitting your 1-year stock vesting cliff! – and you'll leave with mediocre references that will hurt your ability to go after bigger roles (with way more compensation) down the line.

Being able to leave cash on the table is a privilege, and not one to take lightly. Make sure you're making enough to live comfortably - but after that, think about playing the long game.

Actionable advice

In startups, at least, success is not the fastest time to get to the loftiest title. It’s growing a lot and building a network and perfecting a craft. Especially while looking at roles in early-stage (< Series C) companies, look for the places you can learn the most, and will be working with the best people. These are the right bets to be taking.

Whatever the title, you need to be able to honestly answer these questions:

  • Are you in sync with the hiring manager on what’s being expected of you in this role, in the short-and-long term? Are you confident you can crush that scope?
  • What do people with similar titles do at the company? Have you talked with them to find out?
  • What’s really important to you right now? Is the title a primary motivator? If so, is a startup the right place for you?
  • What’s your dream job in the next 3-5 years? Does taking a stretch title get you closer to that?

If you feel confident and comfortable in the above - great, take the leap. Otherwise, be open to compromising for a smaller landing title, in service of your long-term goals.