Two People Before the CEO
To value a company, take the head of sales and the head of social media to dinner — before you meet the CEO.
- Difficulty
- Moderate
- Time to result
- ~days to results
- Steps
- 4
- Confidence
- 88%
When O'Leary values a company there are only two people he wants to talk to before the CEO: the person running sales and the person running social media. He takes each to dinner separately, opens good wine, and learns two things — what the sales distribution channel feels like, and the real CAC and return on ad spend. If those two know their numbers cold, the business model is already figured out and his job is just to pour gasoline on the fire. He considers the head of sales more valuable than the CEO, because a CEO is replaceable but a great salesperson who knows the product, the channel and the buyers is not.
Origin
O'Leary built his own career on sales and marketing — the one area he trusts himself completely — and across 50-plus investments and Shark Tank he learned that the CEO is often not even the original founder and holds little stock, while the sales and social leaders hold the truth about the business. So he inverted the normal diligence order and meets them first.
Core principles
- 01The health of a business lives in its sales distribution channel and its customer acquisition, not in the CEO's pitch.
- 02The head of sales and the head of social media know CAC and return on ad spend better than anyone.
- 03If those two know their numbers cold, the business model is already figured out.
- 04The head of sales can be more valuable than the CEO and is harder to replace.
- 05A relaxed setting (dinner, good wine) surfaces the truth faster than a boardroom.
How to run it
- 1
Identify the two key operators
Before engaging the CEO, find the person running sales and the person running social media — the two roles that determine whether the business actually works.
- 2
Meet them separately and off-guard
Take each to dinner separately in a relaxed setting. O'Leary opens a couple of bottles of good wine on his tab because everything goes better and people reveal more.
Pro tip Separate dinners prevent them from aligning their stories and surface independent truth.
- 3
Extract the channel and the numbers
Learn what the sales distribution channel feels like, and get the real CAC (customer acquisition cost) and ROAS (return on ad spend).
- 4
Judge the model, then decide on the CEO
If the two know their numbers cold, the business model is proven and your job is to scale it. Only then assess the CEO, who is often a later hire with little stock.
Pro tip The head of sales may be more valuable and harder to replace than the CEO.
In the wild
Rather than start with the CEO, O'Leary takes the head of sales and the head of social media to separate wine-fueled dinners to learn the distribution channel, CAC, and return on ad spend before forming any view of the company.
→ If both know their numbers, he concludes the business model is figured out and he only needs to pour gasoline on the fire to scale it.
Common mistakes
Anchoring on the CEO's pitch
The CEO is often not the founder and holds little stock; taking the pitch at face value misses whether the real acquisition engine works.
Undervaluing the head of sales
Treating the CEO as most important ignores that a great salesperson who knows the product, channel and buyers is far harder to replace.
Is it for you?
Best for
Investors and acquirers evaluating whether a company is genuinely a good business.
Not ideal for
Deep-tech or pre-revenue companies where sales and social channels don't yet exist.
From the transcript
“There's only two people I want to talk to before the CEO. I want to meet the person running social media, and I want to…”
“The head of sales is more valuable to me than the CEO. I can always replace the CEO, but I can't replace a great saleswoman…”
From the episode
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