Firing a Founder Is Fine

Starting a company is difficult.

I’ve been fortunate enough to start quite a few and to help others along the way as best as I could. Some mishaps you can avoid, if you’re smart and experienced, others are best handled – this may be counterintuitive, but it’s true – by new entrepreneurs, who aren’t burdened by knowledge and take crazy risks.

Some obstacles, however, are entirely unavoidable, and will pester you regardless of what you do. Regulatory concerns, taxes (not death, hopefully), compliance issues, hiring, I could go on for a couple paragraphs, but you get the jist. One of these issues that everyone will face, sooner or later, is what to do when a member of the team isn’t working out.

No one bats one hundred when it comes to hiring. It’s impossible. I’ve learned more in the last decade about hiring than I could put into words and I’m still not confident I’ll get the next one right. Usually, this is not a big deal. The fit isn’t right, the cultural expectations aren’t met, and if everyone handles things professionally, everyone will move on and call it a day.

When the problem happens with a founder, however, it can get messy. Here’s why it shouldn’t.

Defining a founder is more difficult than you would assume. I don’t see founders, necessarily, as the people who are present in any given room. I can easily accept that someone can be present for the early stages of the company and not contribute anything meaningful enough to earn a place on that masthead. I’ve seen it happen many times. People can be in the company of greatness, take advantage of happenstance, and feel entitled to a legacy they’ve done little to earn.

I don’t think these are founders.

The opposite is also true, and it happens just as frequently. People will come in a little later, sometimes as little as weeks, contribute immensely to a project, define it, get it off the ground, be absolutely instrumental to the birth of the actual company and the laying of the groundwork for success, and be denied the status of founder because they weren’t at the bar when someone brought up the idea first.

These, to me, are founders. Absolutely, undeniably so.

Founders, the way I see it, are the people make the project viable. When it’s real. When it’s not a dream anymore. These can be the same people who ideated it over a beer, but they can just as easily not be. Founding is building, it’s creating, it’s making something happen. Discussing ideas isn’t founding.

This may sound cold, but I think companies only owe anything to those who built them.

Startups fail. They fail a lot. Sometimes the initial team quickly realises that they quite simply don’t have the technical acumen or skillset to pull off what they want to achieve. That means the starting team probably shouldn’t be the founding team. They shouldn’t be the resumes that get sent to investors, they shouldn’t be the ones attending accelerators, they shouldn’t be the ones making decisions.

This can be hurtful to people’s feelings if they’re the ones that are left in the cold, but there’s absolutely nothing to be gained by anyone in moving forward with a group of people that can’t get the job done in a market where the risk of failure is already so disproportionate. Even if you have the perfect team, your odds aren’t great, so taking on the extra risk is not a good choice.

I urge founders: don’t set yourself up for failure. And don’t do it for the sake of personal relationships, because I can promise you one thing: failure will not help you bond, especially if it’s avoidable failure.

Personal relationships shouldn’t be underestimated or made light of. They are an essential part of doing business. It’s impossible to build a team, develop trust with customers, establish a network of partners, etc. if you treat people like cogs in a machine. Businesses aren’t people, but they are people’s livelihoods, their dreams, and where they deposit their work, imagination, aspirations, and hopes.

It’s our job, as decision makers and stewards of these companies, to protect not just some cloudy notion of “business”, but the actual livelihoods of every human being that works with us and has entrusted us with their career.

A founder that is unmotivated, unproductive, unadapted to what the company became, or in any other way out of their depth can break a project. If I had to select the single greatest threat to a fledgling startup in its early stages, this is what I would pick. Interpersonal or professional issues between founders that can’t find it in them to prioritise the company.

When someone is doing harm to your project, keeping them around for the sake of sentimentality, or because you’re close friends, or for any other reason, will do more harm to these relationships than good. Not only that, it will harm everyone else involved as well.

There is seldom anything to be gained from letting a situation fester.

I like the idea that time heals all wounds. I feel like that’s only true, however, once the wound has been closed. Situations when a founder becomes a problem tend to drag along for a long while, bringing the company down with them.

Because these situations tend to be deeply personal for the leadership team, they tend to try everything and anything before making the ultimate decision of dismissing their partner and friend.

This will not preserve your relationship, it will harm it. It will make things worse when reality sets in and forces your hand.

I have seen founders that have been fired rebuild their careers with relative ease, and I’ve also seen friendships that were harmed by failed ventures get right back on track. What I haven’t seen is toxic situations get fixed by letting them continue.

If I can leave you with a final note from this article, let it be this: the startup world is vicious. The vast majority of companies will fail, and this is fine. It’s how the system works. It’s how we figure out who has what it takes. If you want your startup to be a part of that coveted 10%, a significant part of your decisions need to be about derisking. Figure out what can go wrong, and nip it in the bud.

If your founding team isn’t right, whether the issue is cultural or technical, fix it. Everyone will be better off for it.