FIRING can be harder than HIRING
The art of letting go: The painful process of firing team members in a startup, while challenging and emotionally draining, ultimately teaches valuable lessons.
👋 Hi, It’s Ritika and welcome to the 62nd edition.
One of the hardest lessons I learned while building my first startup was how to FIRE people. It’s a gut-wrenching experience that no framework truly prepares you for.
As entrepreneurs, we often focus on the exciting aspects of building a startup—crafting innovative products, securing funding, and growing our customer base. However, a darker side of startup life that we rarely discuss openly is the painful process of letting team members go.
Having been through this three times, each instance taught me invaluable lessons about leadership, transparency, and resilience.
One of the most challenging aspects of being a founder would be making tough decisions about team members.
1. Hiring the Wrong People: A Costly Mistake
As a first-time founder, I ran into and made a critical error in hiring people who weren’t well-suited for the dynamic and often chaotic environment of an early-stage startup.
And a hard truth to swallow is that resumes often don't reflect reality. An impressive resume doesn't always translate to success in a startup setting. You need more than just prior experience, someone who has the ability to get things done even when they don’t know how to, a proactive mindset, and a genuine passion for the mission.
These hires struggled to adapt to the fast-paced, ever-changing nature of our work. They were used to structured environments with clearly defined roles and processes—luxuries we simply couldn't afford. The mismatch became apparent as we missed deadlines, struggled with communication, and failed to iterate quickly enough.
Letting these team members go was my first taste of the difficult decisions founders must make. It was a harsh reminder that hiring is an art, not a science and that cultural fit and adaptability are just as important as technical skills.
2. When we run out of funds
The second time I had to let people go was due to a funding issue.
Initially, I used to think having a really great team is all you need to build a successful product and to have this amazing team will cost a lot. So, that’s where most of the funds go. Also, I was building a bootstrap startup.
We were spending money faster than we could raise it, and with no investors on the horizon, we found ourselves in a precarious position.
This time was very stressful. Every day, the pressure increased to make big cuts to save the little money we had left. Firing people because of money problems was heartbreaking. These were hardworking and dedicated individuals, but the financial reality of the business gave us no choice.
It made me see how important it is to talk openly with the team about the company's finances, creating a culture of honesty and shared responsibility.
3. Deciding to Sell the Company
The third and last time I had to fire people was when I decided to sell the company.
By then, we were almost out of money, and only a few incredibly dedicated team members were left. These people were amazing, doing everything they could to keep the company going while I tried to find an investment or a buyer.
Selling the company was bittersweet. On one hand, it gave the business a chance to continue with new resources. On the other hand, it also meant that these loyal team members would need to find new jobs.
Making those final calls felt like a betrayal of their trust and dedication, despite the circumstances.
The Silver Lining: Transparency & Trust
Being honest about the company’s situation felt like admitting failure as a founder, but it proved to be a crucial step in maintaining trust and respect within the team.
In each instance, I’ve come to understand that there is no perfect way to fire someone, but there are plenty of wrong ways. Here are some key takeaways:
Hire carefully: Look beyond resumes and technical skills. Assess cultural fit, adaptability, and comfort with growth.
Prioritize financial literacy: As a founder, understanding and managing your finances is just as important as developing your product.
Be transparent: Open, honest communication builds trust and can make even the most difficult conversations more manageable.
Act decisively: Once you've identified a problem, address it quickly. Delaying difficult decisions often makes them even harder.
Show empathy: Remember that behind every termination is a person with hopes, dreams, and responsibilities. Treat them with respect and dignity. Be compassionate and offer support where possible.
Learn from each experience: Use every difficult decision as an opportunity for growth and improvement.
Firing someone is never easy and is undoubtedly one of the most challenging aspects of being a founder. It's a skill that no business school or startup accelerator truly prepares you for.
🚀 Things to stay updated on:
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Claude AI is a really great tool to process large amounts of information, brainstorm ideas, generate text and code, help you understand subjects, coach you through difficult situations, help simplify your busywork so you can focus on what matters most, and so much more. (This newsletter post was created with the help of Claude AI).
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Thanks for reading! Until next time!
Ritika 👋
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