Why Early Startups Need to Be Quick to Fire
Sometimes founders start off with great friends who make lousy employees
Last week, one of the founders I’m advising cleaned house. She let almost everyone go and put the few who remained on a different compensation and equity plan. The thing is, her startup wasn’t in trouble — in fact, it was financially sound and growing.
She recognized that her company and her vision had outgrown her initial team, including a co-founder, and it was either toss them overboard or watch the ship go down in a long, slow, painful way.
The wholesale overhaul of an entire team — or even just the booting of one or two early employees — isn’t the kind of thing that’s openly talked about in startup circles. It doesn’t have a catchy name or acronym. But it happens frequently enough that it is its own phenomenon. And while I hate it and most of the time I will disagree with it and recommend against it, I also understand it.
Should you be slow to fire or quick to fire in the early days? It’s a tricky question and the right answer depends on some thorny subjects. So let’s talk through it.
Is it the team or is it you?
The obvious — and correct — counter: Wait a minute, you’re just pissed off and you’re being incredibly rash with some important and life-altering decisions. Take a step back.
And I’d say about 80% of the time, when the leader of an early-stage startup brings up letting go of one or more of the early team, it’s because all of the other negatives and stress and mistakes and bad breaks are piling up on them. In fact, there’s one startup in my past where one of my side duties early on was to keep the CEO from firing three specific individuals, which nearly happened almost every month.
Unless you are made of money or have lucked into a treasure trove of early funding, you’re not going to have perfect people in perfect roles for quite some time. Imperfection is something you have to deal with as a founder and a leader, and it’s the shitty leaders who can’t make this early period work without a rock star in every position.
But on the other hand, sometimes people just aren’t right and they’re killing the…