Signs you need to leave your startup
As a founder or CEO, when your company is pulling you to develop instead of you pulling your company, you need to start having hard conversations with yourself.
This is particularly relevant if you aren’t building a company to flip in a year or two; if you have to grow and sustain a company, this conversation needs to be happening internally all the time. You should constantly be asking yourself, “Am I still the best fit for this role?” If you aren’t, you have two choices: develop yourself and fast — get out ahead of the train and be ready for it as it grows — or get out of the way, put someone else in your seat, and cheer them on to success.
I came up with a list of indicators (both in myself and in others I’ve observed) that told me the company had outgrown my capabilities. I was learning and catching up, but wasn’t pulling the company along the way a leader should. The challenge with each of these “indicators” is that they were, at their foundations, once a strength that was loved. But as the context around us changed, the principle we were using became lost in the application, and we started hurting people and companies with our inability to scale.
So here are seven indicators that you’re not scaling the way you should be. Any one or two of these showing up in your behavior, you can probably work through and be fine. However, if you see most of them in you or a leader you know, it should throw a red flag and merits discussion. Leaving the company isn’t the only way, but pretending you’re not the problem isn’t going to fix anything either.
1. You don’t celebrate successes
We had an incredible Black Friday this past year, we grew almost 70% over the previous year — it was amazing. We’re a 450 person organization, so the whole company was thrilled beyond belief. They’d done it! The team had done it! Amazing!
Co-founder and CRO, Dave, ran the front-of-house team. He shows up Tuesday morning to run the debrief meeting:
“Great job on a great black Friday everyone”
*Team cheers with excitement*
“Now, 12 days of Christmas starts in two days, so here’s what we have coming up, let’s get to work…”
A few of our directors stopped the meeting and criticized Dave for not taking time to celebrate the success. Tireless nights, no sleep, a Thanksgiving through which we all quasi-worked, tech, retail, merchandising, ops, all came together in the best way our company had ever seen, and what did we do as a company? We nodded in their general direction and moved on.
The rough part is that when Dave told me this, my reaction was, “What do they want, a party every time we break a record? We’re growing, of course we’re gonna break records”
I’m so embarrassed. But seriously, it’s a startup mentality. When you’re in the fray, you show up every day doing the best work of your life, and when you close that big deal, just shut up about it because there are ten more right behind it. When you have a record day, don’t get cocky. We’ve gotta do it ten more times or it doesn’t count, and the next one has to be bigger.
Well, when you’re not a startup, that pace and that expectation is rough on your organization.
As we realized our mistake, the senior leadership team paused, then took a day to make cookies by hand, then went employee to employee high-fiving, wishing Merry Christmas, and thanking each for such a great effort to create that record-setting day. It wasn’t much, but it was something to say that we saw the big thing you did, and we’ll take a day to touch each of you to ensure that you know you are seen and appreciated. Really it’s the directors and managers that know how to appreciate their people, but the standard is set at the top.
It was such a foreign way for me to spend time, thanking people and appreciating a big win. The startup way is to feel no pain, but feel no joy either. We pride ourselves on being numb to it. When you are more than just a few people in a basement, that mentality doesn’t scale to your people who haven’t joined a “startup”.
2. You are having your entire staff send you dailies
Turns out this is more common than I realized. This was a thing I did that I thought was fairly innocent.
Everyone: send me a note every day and tell me what you’re working on, I’ll tell you if you’re working on the right thing and if you’re doing enough, and generally be able to drive value where there’s opportunity. Cool?
Seems like a fine balance right? Well it actually works great when you’re a remote team of a few, so a lot of startups fall into the, “every day we’ll send a quick note” mode. But as you get bigger, you will find yourself hiring a manager to manage a team, and you casually say to them “I need a daily report of what you did yesterday and what you’re working, k? Thanks”
Yeah, so you end up with a manager whose day isn’t built to be represented on a daily basis and you silently judge how lazy this new guy is, while at the same time still inserting yourself into conversations directly because you’re watching the daily emails come through from the entire team.
This is a sign of someone who doesn’t have the organizational skills to build workflows that support the needs of the organization nor effectively delegate responsibility and create accountability inside their organization. Huddles with your managers are fine, do them in person, make them quick, align efforts. Daily emails from them and the people below them is bad; stop.
3. You are the abusive manager
This one seems fairly self-explanatory. Don’t be mean to people. But this mean manager is like a silent killer; it’s like a crappy relationship with someone who you hate that you love.
Have you ever seen a leader sort of flip out, then come back a few hours later to fix it? And then casually turn that into a management style? I’ve been that guy, and seen it a bunch. It’s a real thing.
Someone drops the ball on a task that you, the-holy-one-who-should-be-respected-dang-it, specifically asked them to do, and sure, you’re in a meeting in front of their peers, but you can’t even right now and, “HOW DARE YOU, ARE YOU SOME KIND OF IDIOT!?!? GAHHHHHH”
Then, two hours later, “Hey buddy, sorry I blew up back there, you know that’s not me, I was just frustrated with how this all went down and snapped, no hard feelings?”
It becomes a cycle; the leader loses it, halfway takes blame for it, apologizes, rinse and repeat. You aren’t building leaders by treating people that way. You aren’t inspiring your team. You are trying to motivate with fear, and that sucks. Motivate with love, passion, devotion, but not fear. Wankers motivate with fear; don’t be a wanker.
4. Great people want to leave
Great people are attracted to eccentric leaders like you’d find in a startup, but startup folks have this crazy expectation that everyone will love the company the way they do, that everyone has that “ownership mentality”, and that they all lose sleep the same way the founders do. When they don’t match it exactly, founders have a way of passively pushing great people out of the organization.
Similar to this is the tendency towards the “savior mentality”. You have a problem, you realize you need Person X, and when this person joins you, everything is going to be fixed and that problem will go away. Sales will grow, morale will improve, culture will be great, etc.
Then Person X comes in, and things are better, but Person X isn’t perfect, they just are good at some stuff and bad at other stuff, so a net win. But when you were expecting them to walk on water and they can’t, you decide they suck. So they go from savior to devil, and then you kind of hate them because they didn’t fix everything you thought they were going to. Of course the people you brought in feel your animosity/tension/disapproval, so they don’t feel safe in their position and therefore never do their best work.
Mentally, these founders aren’t equipped with the patience and vision to let other managers in and to let accountability become distributed. They place unrealistic demands on people, and although they can get people in the door, they struggle to make those people feel safe in their positions and authority within the company. Give them time and they will find a place that is better for their soul. Don’t be a leader who makes people feel unsafe.
5. Your company has grown but you haven’t
I mentioned this at the beginning of this post, but I think one of the best telltale signs of knowing if your founder is being out-scaled by their company is the focus on personal development. My company hit a point where it started jumping — 50 to 100 employees, 200 to 450 employees — in very short spans of time. Seemingly overnight I went from being completely competent in my management style to having no idea what I was doing. With this growth, I found myself coming to grips with my own uncertainty and lack of confidence. Things started getting really bad reactions from me (all the stuff we talked about above).
Two years ago I went full bore on scaling myself, I got a therapist, business coaching, joined a reboot circle, took university courses, etc. I spent thousands of dollars and countless hours building myself. I had to scale myself to be able to handle the new requirements being placed upon me by my organization.
Think about it: in the beginning, life happens, you aren’t focused on scaling yourself, you’re focused on putting out fires, on hiring, on selling, on growing, on coding, on servers. You have things to worry about that are important. But when you focus on the fires, you miss all the growth you should be experiencing in order to handle the big shifts in your company. You may make a token effort with some books here and there, or some other rhetoric you use to justify your lack of concerted effort on building yourself, but it’s not enough.
In startups, it’s often said that with big growth you should plan on completely rebooting your C-Suite every 2–3 years. The problems will change so dramatically in that time that the people who are right to take you from $0–100m a year will often be different than the people to take you from $100–250m.
Unless you are working like crazy to be ready for the next phase, you will end up holding the company hostage to your own incompetence. Hostage, in that you have a job and a paycheck and human nature will make you not want to lose those, so you go into this denial space where you aren’t incentivized to leave because you’re insecure in your future. You go from company hero to terrorist real quick. Fact is, being an actual C-level exec is harder than we thought it was, and learning to be that person on the fly, well that’s even harder. It can be done, but it takes real work.
6. Your job title isn’t what you do
I see this a lot: CEO’s that are really CTO’s, CMO’s that are really digital marketers, CFO’s that are good accountants, etc. This kind of stuff is fine for awhile, because in the beginning, we are the CEO of a four person rig. The fact that we do CEO duties and the tech and pay bills, well that’s just a bonus.
Fast-forward a few years, and it’s a huge distraction to the actual role of CEO which needs a full-time CEO rather than a distracted tech lover. It’s not a “you failed” type problem, you just need to specialize or die. So focus and get great at being a CEO.
However, it is a real struggle to go from being a CEO who is the person doing the work, to the CEO who is managing people doing the work, to the CEO who is directing managers, to a CEO who is VP’ing the vision and inspiring managers, to a true CEO.
In the midst of that journey, people tend to stall out at a favorite place; they stay manager / coach, or they stick at director and never raise their vision. Being able to sniff that out will save you a lot of heartache.
7. You need people to know how busy you are
This is a great tell. When you go on vacation and come back and people say, “How was the vacation?” you obsess over making sure they know you didn’t even like the vacation but you worked the whole time because you’re savage like that … Yeah, that’s not healthy.
Entrepreneurs wear their busyness on their sleeve. It’s the one thing we are actually good at, being busy. Everything else we’re sort of faking it. We don’t know how to be the perfect leader, we don’t know if our product is the right fit. We believe, but we don’t know a lot of stuff, and people see the chinks in our armor sometimes and that makes us nervous. But we know how to work, dang it, and that’s our favorite mask to wear over every insecurity that we have: We just work hard. And we need people to know it. So we reply to emails late, casually joke about others’ half day effort when they go home at 8pm, or whatever nonsense we decide makes us feel good. We just need everyone to agree with us that we work the hardest — then we can feel good about who we are again.
It’s a thing that’s fun at five people, but becomes unnecessary and distracting at scale. So quit it. You actually did enjoy that vacation, quit obsessing over making people acknowledge that you pulled the laptop out on the beach and worked so hard and never slept. Just say, “Thanks it was great” and let your people have some sort of balance to their lives as well. Or better yet, go take that obsession to a new project and get out of the way so your company doesn’t suffer.
I hope this started a conversation with yourself or someone you are close with battling some of these indicators. The goal here isn’t to drive people out of their companies, but if you don’t address the issues in yourself, when your company starts to scale, a lot of people get hurt if you aren’t up to the task of leading them. Love to hear thoughts on this, or if you’re in a space where this rings true, I’d love for you to reach out and chat.