Thursday, June 5, 2008

I'm sorry, but we're going to have to let you go. (Hiring for a startup part 1)

It may seem trite, but when it boils down to letting someone go......there is no pleasant way to say it. Firing employees is not an easy thing to do, especially if you were the one to hire them in the first place. HR classes and "soft skills" were things I thought were BS in bschool, but in the real world they are very important, especially at a startup.

When you're running a team that is small, every new hire can and will dramatically affect the rest of the team. If there are 10 people, just adding one person will increase your costs by at least 10% as well as change the team dynamics. Hopefully this change is positive, but many times (especially in the early stage of a company) it can be destructive. This is why it is extremely important to do your due diligence before hiring anyone (including part-time employees). Even more important is letting someone go immediately after you realize they are not contributing to the team and/or are not the best person for the job. Allowing mediocrity is the ultimate downfall of any ambitious startup. If you're striving to be/beat the best, you must hire the best. There are NO shortcuts. This may mean that you have to pass on really good candidates.......only the best and that includes part-time employees.

Large companies have the luxury of keeping people on board and helping them find "alternative" opportunities within the firm. In the case of a startup, if an employee cannot find a way to create value in such an open and ripe environment, he/she is probably not built for working in a startup. What does that mean? Not everyone has the physical, psychological, and/or physiological capacity to work at a startup. The hours are long, the work is hard, the problems are complex/never ending, the pressure grows daily, the pay isn't wall street, and nurturing/hand holding is nonexistent. Individuals who need a lot of direction/coaching are not built for working at a startup in the early stages. I've learned that the hard way. We've a number of positions that have been open for well over a year. This is not because individuals lack competence; some candidates have tremendous backgrounds and skill sets. The reason why these candidates are not built for yoonew is because they typically lack the testes/ovaries to believe in themselves and take the road less traveled. In theory it seems cool and sexy to work at a startup, but for those who live it.....we know that the GOOG brick road is a long term goal, not the short term reality.

So why in the world would one work @ a startup? I don't think you can truly appreciate the freedom, excitement, and teamwork evolved with working at a startup unless you have some corporate work experience to compare. At my first job out of undergrad I was laid off on my first day in the office. At my next job, I was dumbfounded by the number of seasoned employees who literally spent 45 minutes out of an actual work day to do real work. That's less than 10%. I would argue that this is the norm and not an exception for many "blue chip" companies. When you subtract minesweeper and solitaire, lunch/smoke breaks, personal phones calls, web shopping, and company gossiping you're left with 45 minutes of productivity. That CANNOT happen at a startup. When the system administrator's main role is to stock the refrigerator with Snapple, you know the company is in trouble. (These are NOT hypothetical examples.)

When making early hires, you're going to make mistakes. As difficult as it may be, you must man up and handle your handle immediately. I've read a lot of literature on when to fire (day of week and time). Contrary to popular belief, the best time to fire someone is immediately, even if that falls on a Monday at 9am.

After saying all of this, here's what can happen if you don't handle a firing professionally.
(If this ever happend in our office, let's just say the monitors would have had friends who came to their defense.



From another angle (in color)



(Btw, to answer everyone's curiosity, NO we did not have to let someone go recently. I wrote this post long time ago and just saw these videos. I felt it was time to give my 2 cents.)