This post is by Jason Lemkin from SaaStr
Start-ups aren’t democracies, no matter what some employees may think. The CEO is the CEO, and the founders are the founders.
But start-ups also aren’t IBM or Cisco. Or even, anything like DropBox or Slack or Box or Hubspot, not organizationally at least.
From 1-10 employees, it’s a family. After 150 or so, somewhere in there, it starts to become a traditional hierarchical structure.
In between … from 10ish employees to 1X0ish … a start-up is something unique. Something organic. A couple of platoons. An organization that has come together voluntarily to take on a mission, at least in part. Later, it’s just a job. Maybe a cool job, but just a job. But from 10-150, it’s no longer a (squabbling?) family, but for many of your team, it’s more than just the best way to pay the rent.
And in this phase, most likely, at least once — the troops will revolt.
They’ll revolt when you make a senior or mid-level hire that as a group, they simply cannot suffer one day longer.
It’s happened to me, and I think for whatever my faults, I have a pretty high EQ and am a half-decent manager. So my guess is it will happen to you, too. In fact, it’s happened with every start-up I’ve ever worked with.
The three times it happened to me:
- A very senior engineer that we just HAD to have. In my first start-up, there was one engineer we had no choice about. He was literally the only person on the planet with the specific scaling experience we needed. Everyone hated him. But I forced us to hire him, over my CTO’s strong objection and my VPE’s grudging acknowledgment we had no choice. It did work — we got the scaling done. But then, once completed, the team turned on him. One day at a company meeting, he snidely called out everyone in the meeting (myself included, but that’s part of your founder job, to suck it up). It was just one burnt bridge too far. Everyone revolted within 20 minutes of that meeting. I didn’t know why at the time — but I fired him that day. It was clear anything else was even worse. Even without a back-up plan.
- A senior product lead that engineering wouldn’t work with. Another time, a rather long time ago, I had a senior product hire that was pretty brilliant. But not someone that could manage engineering. Friction between engineering and product is good, if they aren’t the same function (and in SaaS, I don’t believe they should be). But engineering does have to respect product, at least begrudgingly. In this case, the product lead was both a bit acerbic and remote. That made managing engineers by will just too hard. One day, they simply had enough. It was clear I’d lose the team. That day, they had to go.
- A senior marketing manager that offended everyone culturally. I think start-up culture is what you make of it. It’s the people you hire, not the number of Zoom games you play, how often you drink nitro stout together, or even how flat you think your organization is. And sometimes, you hire someone so far from the values and the culture of the rest of the team, they simply cannot work with him. This happened to me once. It was a hire I wasn’t really in favor of, but it was an experiment. You have to try new things. The experiment lasted 7 weeks. The borg completely rejected him. And one day I walked into work at 8am, and it was clear, the troops had revolted. By 8:30am, I had to make a change.
- Plus for Every Start-Up: the classic non-hands-on-enough VP hired too early. You see this all the time. Bob is a great VP of Marketing or Sales at Box or Salesforce or Netsuite or wherever. He comes into your Hot 17 Person Start-up. And does no actual work himself. And no one will work with him.
If you notice a theme here, it’s not about competence, not usually. Incompetent non-management hires are shrugged off by the troops. They just ignore him or her.
And you have to try things, and take risks, and make stretch hires. And again, it’s not a democracy. Not everyone you hire has to be loveable, or even, likable.
So someday, no matter how careful a CEO / founder / hiring manager you are, you’ll hire someone that the troops just … revolt on.
My only suggestion and learning is don’t fight it. Understand that when you are 500+ employees, people will expect a certain amount of incompetence embedded in the org. But not in that crucial I’m Doing This To Be Part of Something Special phase.
When you are in that phase, and the troops revolt, you aren’t actually fully in control, even as CEO. Because if you lose them, you lose everything. And if you don’t act, they won’t believe in you, that you let this one “horrible” person stay on too long.
When they revolt — they “win”.
Let that employee go, that day.
Or at least, if you totally disagree, think about what I’m saying. And at least let them go as soon as you can.
(note: an updated SaaStr Classic post)