When Is It Time to Fire Your Co-Founder?

Steve Wozniak

Apple Co-Founder Steve Wozniak: Image via Wikipedia

Start-ups are a lot like some relationships; great when when you first meet and date, perhaps a little bumpy and not-so-hot as you spend more time, grow, and start wanting different things from the relationship.

The fact of the matter is that the road is littered with co-founders or co-founding teams that needed to split apart – some stay, some leave – in order for the start-up to grow. Where for example would Apple be if Steve Wozniak still ran engineering and design (certainly an interesting place, but not one that executes with anything approaching the precision it does today) or if Stanford students Andreas Bechtolsheim, Scott McNealy, Vinod Khosla, and Cal’s Bill Joy had all stayed at Sun rather than some sprouting their considerable individual wings and moving on to do other things?

Union Square Ventures principal and venture capitalist Fred Wilson estimates that every single successful investment his VC firm has made over the last 25 years has had a co-founder or early team member shown the door as the business started to scale. Wilson notes, “It’s almost inevitable.”

We all know the scenario; the person who was great as an engineer struggles to supervise the three engineers who now report to them. The person who was a great salesperson turns out to make a not-so-hot sales manager. The person that was good for odd tasks and for hanging out with has become an albatross because a larger firm now has other people to take care of those odd jobs and the co-founding team member basically hangs around adrift taking up people’s time – people who have other things they need to do.

The time to part ways then is when the needs of the start-up are greater than the need to keep someone on board whose time is past. If not done well it can be painful, awkward – but it’s still necessary.

My own experience – both working as a principal in start-ups (and bigger companies) as well as through my coaching consulting practice working with CEOs and leadership start-up teams – is that the hardest part is to figure out how to have the “time to think about going” conversation in a way that is constructive and avoids blowing up the personal relationship. It can frequently be awkward, messy stuff (“What? You don’t love me anymore?“) but if done well can be relationship building – rather than destructive –  for all involved.

As Fred notes about parting ways (“Be generous.” “I believe how you handle a person’s departure has more impact on morale than the departure itself, particularly if the remaining team understands why the departure is necessary.“), this is not one of those times when you cut corners. It’s a time to bring in experienced help  as appropriate that can bring a conversation forward in such a way where people’s pride and dignity is kept whole, and a path for both departing individuals AND the enduring start-up is laid out. That experienced help might be a board member, might be an advisor, and might be a coach like me.

I have unfortunately seen the flip side; the CEO who says “I can handle this” and does so in a way that the shouting can be heard down the hall, and it takes the firm months – if ever – to recover from the rupture. Their error? These type of conversations are part of a process – a step in a relationship – rather than a one-and-done transaction. And relationships take thoughtfulness – not simple “Time to go” announcements.

Later this week I’ll spend part of my day with a start-up in the South Bay, working on how their leadership team is performing, and charting out some next steps. It’s not certain, but I have a hunch that part of the discussion with be growth steps; how do we move from an early stage company to something that can be successful as we scale.

And part of that discussion will undoubtably be what does the firm needs to do to succeed, and who should (and wants to) stay on, and who should move on.

Tricky stuff; fortunately they are in experienced, successful hands.

Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy of KnowledgeCrush.

2 thoughts on “When Is It Time to Fire Your Co-Founder?

  1. Pingback: Tweets that mention When Is It Time to Fire Your Co-Founder? | Life Back West -- Topsy.com

  2. Pingback: How do you terminate a cofounder? - Quora

Comments are closed.