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Entrepreneur Office Hours - Issue #94
A hard learned lesson about why startups fail
I need your help. I promise, It’s a very simple request, and it will, quite literally, help save lives. Here’s the deal…
As you’re about to read, in this issue I’m sharing a very personal article about my family, my health, and how those kinds of things impact startups. I’m donating any royalties I receive from the article (which are calculated based on the number of people who read it) to a fund that does life saving research for children with heart conditions.
In other words, the more people who see the article, the more money it raises to save children's lives. Do you see where this is going? Easy, right?
If you’re willing, could you please take 15 seconds to share the article. Here’s a direct link you can copy/paste:
Oh, and hopefully you’ll read the article and get value from it, too. It’s a lesson about startups and why startups fail that, unfortunately, I had to learn the hard way. By sharing it, I’m hoping I can save other people from a similarly terrible experience.
Thanks for your help and support!
Every entrepreneur knows most startups fail, but very few of them actually understand why. In this article, I share a hard truth about life and entrepreneurship that helps explain high startup failure rates.
Is One Number the Key to Unlocking Your Startup’s Full Potential?
Entrepreneurs spend so much time obsessing about their products that they often overlook what really matters: customer acquisition. You should be obsessed with that! And, as I discuss in this article, obsessing about customer acquisition means obsessing about CAC.
Office Hours Q&A
Aaron, I need help! We’ve got someone on our team who everyone really likes as a person, but he’s not doing the work we need him to do. It’s costing the company too much money to keep paying him for the limited amount of value he’s creating. And it’s costing us too much time to keep trying to train him to be better.
At the same time, I can’t even begin to describe how much everyone likes him. We’re a small team of only seven people. He’s a really good guy. The kind of guy who’s super-nice, incredibly dependable, always there when you need him, and that kind of thing. Everyone on the team likes him a lot, myself included.
As the CEO, I know I’m the one who needs to fire him, but I just don’t know the best way to do it. I don’t have trouble firing people who are clearly bad at their jobs and bad for the company. But that’s not the case with this employee. Do you have any tips for how to fire someone you really like as a person?
Ah… the joys of being “the boss.” Everyone thinks they want to be the boss until they actually have to do the hard parts, then it’s not nearly as fun. #AmIRight
In all seriousness, what you’re describing here is one of the most important parts of a CEOs job. Not firing people, specifically, but focusing on what’s best for the company and doing those things even if they’re not always the most pleasurable or enjoyable things for any particular individual.
Companies can’t protect themselves, so they need people to protect them, and that job falls to a CEO. In other words, your job is to put yourself in the proverbial “shoes” of the company and then make decisions for it rather than yourself or anyone else.
In this case, it sounds like focusing on what’s best for your company is what you need to do. The company needs a certain employee fired, and, as CEO, it’s your job to act in the best interests of the company.
The way to do that is by being direct and honest with the employee. Explain to him that the company has limited resources and, right now, the resources being expended on his salary aren’t returning the value the company needs, so you have to let him go. If it helps, you might also consider suggesting that maybe he’s not cut out for working at a startup where the cost to value margins are so much thinner. Maybe even offer to help him get a job at a more suitable type of company if that’s something you’re willing/able to do. At the very least, offer a recommendation.
If he’s as good a person as you seem to indicate, he’ll understand the situation. He’ll also understand why you, as the CEO, have to do what’s in the best interest of the company, and that doing so isn’t a reflection of how you personally feel about him.
Also, for what it’s worth, you seem concerned about the impact of firing this person on your company since everyone likes him. While that might be true, if the employee is as problematic as you indicate, I suspect his coworkers recognize his shortcomings, too, and they’ll understand why he needs to be fired. In fact, I bet they’ll be more happy about it than you realize.
Sure, like you, they might enjoy this coworker as a person, but that doesn’t mean they aren’t frustrated by the problems he’s creating for the company. I’m guessing, after you let him go, you’ll notice more relief than anger. If, for some reason, that’s not the case, you can consider addressing the issue with your team. But I wouldn’t worry about it immediately. Instead, do what you have to do as soon as possible – why delay it at this point? – and see what, if any, response the team has. In other words, don’t try to guess how they’ll respond. Just wait and see how they actually respond.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!