90% of Startups Founders Get Fired
Chapter Seventeen Excerpt: Startup Muse available from Amazon
Previously, I wrote about how entrepreneurs need to level with their employees when it comes to the realities of the startup world. In this chapter I’m writing about how entrepreneurs need to level with themselves with regard to the chances of them actually keeping their jobs. If an entrepreneur is lucky enough to be part of the 1% of founders who raise venture capital there is a 90% chance that they’ll be fired within a year — translation: you’re getting fired. When your investors/ board wants to fire you two things are often true:
- There is always someone more suited to run your company than you.
- There is a better opportunity waiting just around the corner.
First of all, let me say this right from the start — I am really good at giving advice and very bad at taking advice — much less my own advice. Over the course of my career, I’ve been fired (one way or another) from almost everything I’ve ever been involved with. From my first startup to my last I’ve been terminated, bought-out, promoted, or simply ignored — all of which I see as getting “fired”. In some cases, I took it with grace and in others, I fought it tooth and nail.
When I was “promoted” to chairman of ShopSavvy I fought the decision tooth and nail going so far as suing the company for failing to honor my employment agreement. The reality was that I ran the company for four years — it was time for me to hand the reins over to someone else. In my final year with the company, our users had doubled to 40 million and our revenues had grown four-fold — that being said I didn’t have a vision for taking us to the next level. Had I used my energy helping to find a replacement instead of fighting to stay in control everyone would have been much better off.
My advice is to begin the process of searching for your replacement BEFORE the board does. Inform the board that you’ve been talking to recruiters and candidates and keep them apprised of the process. Assure them that you’re committed to the position, but that you realize that if/ when you are successful it will be time to bring in the “big guns”. Ask them for advice and keep them up-to-date.
When you initiate the “fire the CEO” discussion you take all the fun and intrigue out of the process of replacing you. You’re not getting replaced anytime soon. The truth is that hiring a CEO is a very time consuming and difficult process — it is going to take forever — perhaps a year or longer. There is an outside chance that you’ll find the perfect candidate right away (hire them if you do), but the reality is that you’re going to kiss a lot of frogs before there is consensus on the board. In the meantime, keep running your company and stop worrying about getting fired. When you do find your replacement you’re going to become the CTO or some other meaningless title — your job will be to ensure the new CEO succeeds — do your job.
If your board pops the “we think it is time to start looking for a seasoned CEO” conversation with you before you — you’re getting fired. Instead of fighting the board, get excited. If you play your cards right you’re going to get to keep your ownership in the company, a board seat, and have the freedom and support to start something completely new. Typically, investors want you to focus 100% of your energy on their investment, but when they fire you they want you to disappear and keep quiet. If you’re smart you’ll disappear, keep quiet, and build something new. More often than not your investors will be calling you back in a year or two after their new CEO has faltered — they will falter. If you’re lucky you’ll have built something of value during your hiatus and you’ll be in a position of being able to help.
While I was “in the wilderness” after getting “promoted” from the CEO position to chairman at ShopSavvy I co-founded ViewMarket which is now SB Nation Radio generating millions of dollars in revenue and profit. Given the fact that most startups fail, playing multiple hands is a smart bet. Play as many hands as possible. Most entrepreneurs are good at starting things — embrace this skill and find others to help you finish. One of my good friends was recently fired from her dream job. She was devastated. But almost as soon as the news became public, job offers began rolling in — it turns out she hadn’t been dreaming big enough. Control is just an illusion. Let go. Start something new.