Firing

Bad hires that aren’t corrected can kill your startup

“Talent density is often more important than the absolute amount of talent. Mediocre people are neutron absorbers!”

Sam AltmanOpenAI

Allowing poor performers to stay on the team is a death blow for talent density. Everyone already knows who isn’t pulling their weight, and top performers will leave if you don’t make the hard decisions.

You end up spending time helping low performers get up to par instead of getting more leverage out of 10Xers.

While it sucks to fire someone, the A players on the team will be happy that you’ve done it. They want to work with other great people, and they knew this person wasn’t a fit.

Signs that someone is not working out

• Not getting up to speed fast enough. The best time to pick up hiring mistakes is within the first 3 months. Schedule check-ins on day 30 and day 90. Ask yourself: “Knowing what I know now, would I still have hired the person?”
• Not scaling at the rate of the startup. In a fast-growing company everyone’s role changes every 6 months. Some people can keep up, but others develop old-timer syndrome.
• They fail the keeper test. If the person were to quit tomorrow, would you try to change their mind or would you accept their resignation? If the latter, then perhaps it’s time to replace them.

Old-timer syndrome

Startups change dramatically as they grow. Some of your best people in the zero-to-one stage will not keep up with the changes the org undergoes:

• Roles become more specialised
• Rules and processes are introduced
• Hierarchies start to matter
• Decision-making is formalized
• Everyone isn’t informed equally
• Relationships become more complex

Regularly remind employees that they need to continually level up to keep pace with the org. Give them feedback if they’re struggling. But eventually draw the line and ask them to leave if they’re not shaping up.

How to fire

• Fire crisply and kindly. Don’t negotiate.
• Take their job. Not their dignity.
• Offer generous severance. It makes everything easier.
• Have a short transition period. Just cut the cord.
• Don’t demote (usually). They almost never work.
• Don’t feel too terrible. They’ll find more success elsewhere.
• Just do it. Delays make it worse for everyone.

“You might think that bad hiring decisions won’t matter that much, since you can just fire the bad people. But Stalin-esque meritocracy sucks. Yes, you can shoot the bad people in the back of the head. But the problem with that is you’re still shooting people in the back of the head.”

Stephen CohenPalantir