Holy @!$%! That Was Hard!

Happy Friday Friends,

Last week I had to make the hardest decision of my professional career. We had to let half of our team go. We were only 12 people so losing 6 is massive for a startup like ours.

I’ve been building teams for many years, fortunately, I haven’t had to let too many people go. Part of that I can attribute to the fact that I built most of them from the ground up to scale a business or department. That means I did most of the hiring. I’m not saying my hiring process is foolproof but, with so little attrition it must be decent.

This is the first time I’ve needed to have difficult conversations. What makes them specifically difficult is they weren't conversations based on performance. Which, most of the time the employee knows is coming. This is the business’s (our) fault. We had talented, committed people, some had been with the business since month one.

The hardest part for me was looking at an org chart and deciding who is not required. That killed me.

Looking at people as roles and numbers on a piece of paper doesn’t sit well with me. No person should be simplified to a role and the cost associated with that role. Everyone can add value if you know how to leverage their skills. And, in startups every head counts.

But, in times like these, we didn’t have a choice. I didn’t have a choice. As the captain of this vessel, I needed to step up and take responsibility for the tough decisions.

My primary job is to look after the company's best interests and keep the boat sailing. That is challenging for me because my values all align with people, not companies.

So, how did I choose? How does any company in this situation choose? I would love to know. I’d guess that the bigger ones have a surplus in most departments because of over-zealous investors. So, it might look something like last-in, first-out. Plus a few “managers” because they are a bigger cost to the company.

For us, we need to realise revenue as quickly as we can to give us some runway. We are lucky to be in a position with a very solid backlog of contracted customers. These customers are in varying stages of implementation and we’ll realise revenue once they are onboard. So, at this point, an onboarding team is the highest revenue driver for our business. And, of course, engineers go without saying for any tech startup. We had to let go of everyone else who did not fall into those camps.

It was a day I don’t want to remember but a day I won't soon forget.

I keep asking myself, how did I end up in this situation 3 months into running a startup?

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The simple answer is - it’s a sign of the times. Our small business can’t be different from the majority of tech startups.There are a lot of companies in tech around the world that are taking stock at the moment. Twitter has removed 50% of its workforce. Facebook let over 1,000 people go last week. And, there are handfuls of tech companies that have closed up shop in the past month. If I look at it through that lens then it doesn’t seem too bad. Some of these are multi-billion dollar whales, we're a tiny guppy.

The more complicated answer is that often in life we learn lessons the hard way. Having never led a company before there were things I could not have known to look out for. There were warning signs I now know I should have seen, but, during the honeymoon, I did not.

And, sometimes ignorance is bliss. Sometimes we have a sense that things aren’t all unicorns shitting rainbows. But, we want to be optimistic so choose to turn to ignore our gut with the hope things will turn out for the best.

They won’t.

Instead of joining the business and immediately looking to scale. Which was my mandate from the investors who hired me. I started uncovering some things. Nothing sinister. Almost all are pretty common. If I asked twenty tech founders about their first 18 months, almost all would admit similar issues. Inexperience and a little ignorance.

I want to be clear. I am still crazy excited about the business. We have an amazing opportunity if we can make the right decisions and get the time to work on it. If offered the opportunity again I am 99% sure I’d still take it. As a mate of mine put it to me. “You’ve had an expedited, masterclass in startup bootstrapping and fundraising.” Lessons like these are invaluable!

Hindsight is 20/20. Would I do things differently if I could redo the past 4 months? It’s hard to think if I’d change anything. It’s too short a period to have acted too differently. I am hard on myself though. And, as most of you will know I am thinking about what learnings I need to take the experience.

Assumption really is the mother of all fuck-upsNever assume anything. Make sure of it yourself. I’ve caught myself a few times recently saying, “well, I assumed that was the case.” Without a doubt, assumption leads to the biggest mistakes. You are setting poor expectations for yourself.

Listen to your gutDon’t discount your gut feeling in life. The reason it’s there is because of all the years of experience you’ve been compounding. I know I have great instincts and they’re right more often than not. I need to become more conscious of listening to that feeling and, then exploring why I am feeling hesitant.

If it seems too good to be true it ALWAYS is!My father used to say this all the time. We will tell our kids the same thing for sure. There is a reason why cliches become cliches. It sucks but it's reality.

We control outcomes, they won't magically sort themselves outThere are times when I let something be and just hope it sorts itself out. I know I’m lying to myself! If a situation resolves itself it’s because I’ve taken action to force it in a certain direction. In business, and in life, we need to be more proactive in affecting outcomes.

What I haven’t figured out yet is how to turn off emotion and not let this affect me too much. I can often separate business and emotion. But, this time is a little different. I am leading and thus I partially blame myself. It is up to me to look after the business AND the amazing people who work with me. Accepting that I don’t have full control is hard to accept.

The situation has presented me with some levelling-up lessons. But, I do wish they hadn’t come at this cost.

It’s pretty tough out there friends. From what I’m seeing and what I’ve been reading we’re still only in the early, early stages. Next year is gonna be challenging - buckle up.

I'll leave you with one of my mantras (it's also tattooed on my arm).

This too shall pass.

Peace, love and muscles.

JarrenThe Beginner CEO