If you are a subscriber to Mahalo CEO Jason Calacanis’s listserv (you are, right?), you probably found your email inbox slammed last week when the list briefly allowed recipients to reply to the entire list. In today’s “Jason Nation” missive, Calacanis apologized, explaining the error and using it as a launching pad to discuss what can be an unpleasant but sometimes necessary task: firing an employee at your startup.
In the case of Calacanis’s email, it seems, the sys-admins who set up the list accidentally left the “post to list” setting on for several thousand list members. Oops. Calacanis recognized the problem almost immediately and shut the email server down. And according to Calacanis, the individual responsible was apologetic, fearing that he’d be fired.
Calacanis writes, “As CEO, I was faced with a conundrum: Should I fire a hard-working and loyal team member for making a huge error? In this case, it was the first serious error made by an otherwise ‘good kid.’ Why did he make the mistake? He doesn’t even know; perhaps a lack of focus or just a bad day. That’s the problem with mistakes: their cause can be difficult to pin down.”
Calacanis goes on to examine the three categories of that mistakes and employees can fall into and discusses his thoughts on who and when to fire:
1. A great team member who makes a big mistake
Verdict: Don’t fire them. Talk about the mistake, and brainstorm ways to fix it and to make sure it doesn’t happen again.
2. An average team member who makes a big mistake
Verdict: Fire them. In fact, Calacanis makes the argument that you shouldn’t hire average employees at your startup in the first place. “Your advantage at a startup is that you can demand employees who crush it and who are above-average, and compensate them with stock options. Average people should work at average (by which I mean big) companies. Big companies actually run better with average folks, because those people don’t rock the boat.”
3. A great team member who makes multiple mistakes
Verdict: It’s complicated, and unfortunately, it’s all too common. Calacanis says that when faced with this, he does try to work through the person’s problems. And while he notes that founders might not have the time or the training to do this, he stresses its importance. “When you try to save a flawed, yet at other times effective, team member, you send the other members of your team a positive message: loyalty.”
VC Ben Horowitz recently wrote a blog post entitled “Why Startups Should Train Their People,” in which he makes a case for ongoing functional training in startups, so that employees and management have the right skills to do their job.
Because at the end of the day, it probably takes more time to hire and fire someone than it does to train them.
