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An entrepreneur's challenge: Going from a startup garage to a corporate boardroom Add to ...

When Josh Silverman received a call last year asking if he would like to work for American Express, he was surprised.

The 43-year-old technology entrepreneur’s life had always revolved around Silicon Valley start-ups. He had been chief executive officer of Skype and before that held a senior role at eBay. In the late 1990s he had co-founded Evite, the Internet invitations company, and sold it in 2001. The thought of working for a 162-year-old blue-chip corporation was alien.

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“My initial reaction was confusion,” he says. “I had no background in financial services and had never worked for a Fortune 100 company. It was never my intention to work for a Fortune 100 company.”

After hearing more about the job, however, Mr. Silverman was intrigued. American Express was keen to get further into the market for digital transactions and mobile payments, so customers could pay over the Internet and through their mobile phones as the technology evolved. The leadership team seemed committed to changing the company and, for his part, Mr. Silverman was tempted by the chance to have a big impact at a big organization. Last June, he was named president of American Express’s U.S. consumer services business. Such a role, which is all about taking the company further into digital ventures, carries the title of chief digital officer in many companies.

Mr. Silverman is among a number of technology entrepreneurs being lured to senior roles at more traditional companies. “There is a growing trend for Silicon Valley talent to move into established companies,” he explains. “In the middle of the first tech bubble, Silicon Valley was the one hiring talent from Fortune 500 companies. It was very one-way. But now we have enough Silicon Valley leaders who have run companies at enough scale to be useful for the Fortune 500 companies as well.”

Rhys Grossman, at executive search company Russell Reynolds, says demand for chief digital officers – expert technology specialists who take senior positions at the right hand of the CEO and help to transform company strategy – has increased dramatically. In Europe, search requests have risen by a third over the past two years; in the U.S., they have risen by a third in just the past year.

Advertising companies have had chief digital officers for years as they adapted to the growth of advertising on the Internet and through social media. But organizations in the wider economy, from financial services to retailing, are now appointing them too. Last year New York City hired a chief digital officer – Rachel Sterne, the founder of GroundReport, an online news site, then aged 27 – to encourage more people to engage with the city electronically and to ensure it was offering the right social networking and other tools.

The prestige of the role has increased since the days when the head of digital was an adjunct to the marketing team. “A few years ago, digital roles were a couple of levels down in the organization. Now they are reporting directly to the chief executive,” says Mr. Grossman.

This reflects the importance companies are attaching to having a digital presence, as more of their customers adopt smartphones, download apps and join social networking sites.

The responsibilities of the increasingly senior role in long-established companies mean it is getting harder to find suitable recruits. “It is not enough to simply know digital, they need to know how to lead. It is as much about a big general management role as being a digital person,” says Mr. Grossman.

Adam Brotman, 42, who oversaw the development of Starbucks’ mobile apps and in-store media services, admits it has been a bit of an adjustment working for a much bigger company. Before his employment at the coffee chain, he was CEO of Barefoot Yoga Company, a Seattle-based e-commerce business. “[Starbucks]is the first company I have worked for that is multibillion in revenues and multinational. I had to learn to be a leader and an entrepreneur in an organization of that size,” he says.

Several European companies have recruited chief digital officers in the U.S. because of the lack of homegrown candidates. Yell Group, the U.K.-based directories publisher that this week announced a loss of £1.42-billion ($2.29-billion Canadian), hired 51-year-old Scott Moore, a former senior executive at Yahoo and Microsoft, as its digital chief late last year. With sales of traditional directories falling, the company also announced plans to rebrand itself as Hibu as part of its effort to transform itself into a mainly digital business. Mr. Moore was behind Yell’s acquisition of Moonfruit, a U.K. company that helps small businesses build their own websites.

There may also be a culture shock for entrepreneurs switching over from a freewheeling start-up, Mr. Grossman says: “They can often look and feel very different from their traditional business colleagues ... For cutting-edge things like social networks, the people who know those areas well tend to be younger.”

But Mr. Silverman says the cultural differences can be overstated. “People here wear suits and I have a big, wood-panelled office, which is nothing like I was used to. I joked that they should put a cubicle in there to make me feel more comfortable. But . . . people are [still]people,” he says.

Tempting tech entrepreneurs to join established companies is the other challenge. Compared to the chance of earning immense riches from founding a successful start-up – Mark Zuckerberg was worth more than $19-billion (U.S.) after Facebook’s float on the Nasdaq last week – a corporate salary plus bonus can seem limited. “Sometimes it does fall down on the compensation,” admits Mr. Grossman. “These executives can earn a lot more doing something in the Valley.”

Mr. Silverman says: “This was far from the most lucrative offer I had. But at this stage in life it is about what I can brag to my grandchildren about. It’s about impact.”

The good news for recruiters is that power can trump money. Mr. Brotman and Mr. Moore both had better financial options but were attracted by the influence that creating a role in a big company could bring. “If we are successful in executing our plans, we can do that at a huge scale,” says Mr. Moore. “We have a 6,000-person sales force that can take our products to market. It is an opportunity you don’t have in a 50-person start-up.”

For Mr. Brotman, the highlight so far has been the launch of free WiFi across Starbucks’ coffee shops. “I set up a Twitter search and could see that the whole country for one moment seemed to be high-fiving us for that,” he says. “Seeing hundreds of thousands of consumers commenting on it, having had that kind of impact was one of the greatest moments of my life.”

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