Firing a founder

Joseph Galarneau Founder and CEO at Mezzobit, creating transparency and control for Internet data

May 27th, 2013

We had two core cofounders and decided to add two additional cofounders (a general counsel and a chief architect) to dramatically increase our changes of success. Both came well-recommended after an extensive search.The GC is doing a bump-up job, but the architect is simply not producing. It's not a question of ability -- he's very bright and can crank out great code and designs when needed. He's just unreliable in terms of meeting commitments and definitely not performing at the level commensurate with his potential equity grant.

I've had some general conversations with him about this, as well a one "Come to Jesus" convo that clearly laid on his past performance, our expectations, and a go-forward strategy. He admited that he wasn't properly engaged and pledged to redouble his efforts. I told him that he'd be a close contact in the coming weeks to give him feedback on how things were going.

This guy is worth saving in that he has a lot to offer the team, as well as building product vary ahead of our first round (coming up soon). He doesn't appear to be gaming the system, and acting maliciously. I guess that I wasn't expecting normal employee performance issues so soon among founders, who usually have outsized intrinsic motivation and incentives to kick ass.

In a corporate environment, I would let this go on for awhile before pulling a switch (I've managed hundreds of folks over my career). Any stories out there in FD land regarding similar issues and how they were handled. Don't need help on the legal side -- that's well in hand.

Brian McConnell

May 27th, 2013

I think you've answered your own question. If you already had to talk with this person about subpar performance, the sooner you cut him loose, the better. You gave him an opportunity to earn founder equity, which he has to earn. If he won't deliver now, that's very unlikely to change. You can't afford to have a non-performing technical co-founder. That's a company killer. My advice: find someone else ASAP.

Matt Schaar

May 27th, 2013

Having been let go as a co-founder with absolutely no warning from my fellow founders nor the Board (long story), I can say that your approach has been entirely refreshing to hear. These are conversations that should take place in stages and over a comfortable, but not extended, period of time. At the end of the day, I think the decision for any founder to depart should ultimately lie with him/her. If the founder in question simply is not in the right environment for him/her and the company to succeed and thrive, then it's in the best interest of all parties to consider a shift. I'd have some honest discussions about the working environment for your architect and whether it's right, as well as with your Board/investors to address your concerns and solicit their own feedback on your founder. Long story short: transparency and honesty throughout the process makes it far less messy and healthy for all parties involved. Move swiftly, but openly. Best of luck. - Matthew Schaar +1 248 229 1916

Joseph Galarneau Founder and CEO at Mezzobit, creating transparency and control for Internet data

June 16th, 2013

Just to close the loop for those of you who chipped in your thoughts, tried to work with the cofounder for a few more weeks just to make sure there wasn't a communication or expectation disconnect, but in the end, we decided to break up. There were four of us, now there's three. While it's a loss, it's not fatal due to the distribution of skills, and we're moving on. It also forces to rethink the calculus that got you to a larger cofounder group (is giving away equity going to help increase the changes of success).

John Wallace President at Apps Incorporated

May 28th, 2013

I like to understand why someone is performing badly before firing them. Is he putting in the effort? Are the goals and priorities well enough defined? Is he getting an adequate ROI relative to his risk? What's getting in the way? For example, you mention that two of your co-founders are PT. Is he one of them? If so, there are *many* things that can be getting in the way. Is your venture funded? If not, then are you all fairly sharing the risk? For example, in many tech startups the first thing that needs done is the software, so 75% of the risk falls on the developer even though he only has 25% of the equity. (To share the risk evenly, founders should put in cash equal to their share of the business, and then draw against it as they put in work.) Are there other opportunities vying for his attention? Too many what-ifs. Easiest to sit down with him and figure out why it isn't working out and if there is a way to pivot the structure so that it will.

Bill Snapper Owner Principal at SammyCO, LLC

May 28th, 2013

The beginning of the company is usually the exciting part for the role of a chief architect. If you're having trouble getting them to engage early on it's not going to get easier. It sounds like you've already done what was needed to get this on track. I have to agree with Michael and say it's time to cut them loose. I had a situation like this with a business co-founder years ago. They would engage initially face to face but their homework assignments were never done. I got lots of negative comments about why something wouldn't work but never got any suggestions as to how they'd do it right. Lots of negative energy. Thankfully I made the decision after 8 weeks of this behavior to sever the relationship and while it was one of the toughest things I had ever done it was 100% the right thing. My only regret was not doing it sooner when I discovered it.

Joël Cheuoua Senior Staff Engineer at Tintri

May 27th, 2013

Hi Joseph, Sounds like a difficult spot to be in :( many kudos for tackling the issue hands on. Off the cuff ... and even though I realize we're talking founders and not employees (although they seemed to have been recruited in a similar fashion than employees) it reminds me this thesis: http://venturebeat.com/2013/02/06/why-hiring-b-players-will-kill-your-startup/ That of course has its antithesis: http://venturebeat.com/2013/02/22/why-hiring-unicorns-will-kill-your-startup-faster-than-b-players/ Both excellent food for thoughts I think? Best, Joel.

Mike Winer

May 27th, 2013

Joseph, you wrote about how you gave him some time and then had some general conversations with him a few times and then, finally, a "Come to Jesus" meeting with expectations you clearly laid out. At which point he admitted he wasn't properly engaged. But, of course, at that point he had no choice.

In what you've written, you don't describe how you listened to him in ways he could feel really heard. There may be issues outside the business and/or inside. The only fair thing is to sit down with him and ask "What's happening for you." Are there ways we can help. And you actively listen with no expectations and especially with no desire to immediately counter his perception or feelings. You are just there for him. It seems like a waste of time because he appears to be 'the' problem, but I think you'll find it's a real gift to yourself.

I have a 2-page paper I'd be glad to send you on "Powerful Listening." I don't see how to attach it here but send me a quick email at mike@seeingresuls.com and I'll reply with the paper attached. There's also a paper by Carl Rogers the GrandDaddy of Active Listening. In the paper. which you can find at

http://www.go-get.org/pdf/Rogers_Farson.pdf

he writes: "If I want to help a man reduce his defensiveness and become more adaptive, I must try to remove the threat of myself as his potential changer. As long as the atmosphere is threatening, there can be no effective communication. So I must create a climate which is neither critical, evaluative, nor moralizing. It must be an atmosphere of equality and freedom, permissiveness and understanding, acceptance and warmth. It is in this climate and this climate only that the individual feels safe enough to incorporate new experiences and new values into his concept of himself.

And forgive my effrontery, I hunch it's the same for you. It's not easy to change our ways. I wish you the best. Mike

Daniel Lo

May 27th, 2013

You didn't say anything about where they were working... If they are not in an office, there may not be enough social "umpf". In addition, they may have had a bad transition, between one work environment to the next; perhaps a 1 week vacation.

my 2c.

Labhesh Patel Chief Data Scientist at Abzooba Inc.

May 27th, 2013

Joseph,

You'd be the best judge of this, but you need to quickly figure out how easy it would be to replace him. It seems like he is a sharp guy and can produce when he's motivated, but as a co-founder, his motivation needs to be at 100% all the time. The general consensus in the valley is that smart technical co-founders are hard to find.

Are you able to better quantify for yourself as to how much equity participation this person deserves for the engagement he is showing? Is it even worth thinking along those lines? Would he be interested in a contracting role whereby upon his producing certain deliverables, certain amount of equity gets unlocked right away for him?

You should not need to flex your "motivator" muscles with co-founders so early in the game. At the same time, you need to make sure that his leaving right away doesn't put the project in jeopardy for several months as you look for someone else to fill his role.

I would not burn bridges, probably retain him as an informal technical advisor and give him equity encouragement if he helps recruit and transition his role to someone else.

Rich Pirrotta Chief Financial Officer at Logicalis

May 28th, 2013

Ditto for what Brian McConnell said. From your other (corporate) experience, you know the answer, but you want to believe the person will change and perform as needed. It's a right and noble approach--to give someone the benefit of the doubt and to desire that they can deliver. It seems you have fairly vetted the challenges with the person, and for whatever reason, it's still an issue.

No one likes to work in an environment where they are not performing. Free the co-founder to go take on work where they can be intrinsically motivated and deliver. It's not with your company. The mismatch that exists does not serve their or your greater purposes. Good luck!

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