The Day I let my first employee go

His name was Robert Paulson.

 

Just kidding.  His name is CJ.  We hired CJ right out of WPI to be a developer for MessageSling.  CJ’s a bright kid.  We met him at a “Meet the Entrepreneurs”-type dinner hosted by WPI’s Venture Forum a couple months after starting the company.

When it came time for school to end, CJ came knocking on our door.  The decision whether or not to hire him — really the decision to hire ANY engineers at that stage — was a tough one, and there will be another post about it.  But for this post we’ll focus on the fact that we hired CJ, and ended up letting him go.

It wasn’t CJ’s fault.  We ran out of money.  When CJ started, we made it very clear to him:

CJ, we have very little money.  We can currently only pay you through 6 months.  Our runway could be even shorter if anything else comes up.  BUT.  We — me, I, Ryan Angilly — promise you that we’ll let you know with at least a month notice if that’s gonna change so you can line something else up.

I ended up breaking my promise.  When I let CJ go,  I told him he was getting his last paycheck in a couple days.  Not only that, but the company didn’t actually have enough money to pay off CJ’s last paycheck.  We ended up paying some of it out of pocket.  

I never got all the details, but an accounting error gave Scot the impression we had a lot more money than we did.  One day he told me we would be out of money in a few days.  I felt sick. 

At the time, though, I wasn’t mad at Scot at all.  He didn’t have any experience keeping track of money at that level.  Quickbooks is a nightmare.  We were doing this crazy thing where our “salaries” were >$100k, but we were only taking a fraction of that and keeping track of the difference as a “loan” that we were giving the company.  He was doing his best.  On my end of things, this was “My First Rails App ©” so there were plenty of app deficiencies that he had to put up with from me.

As an aside, I will say that our financial setup was unnecessarily complicated.  We were a startup with $50k and no revenue.  It was a disaster waiting to happen.  Any Series A we raised surely would not have honored our “loans” to the company, and any oddities in accounting would have been cleaned up by their number crunchers after the fact.

So Scot tells me we’re basically out of money, and I’m dreading talking to CJ.

I tell him.  And guess what?  The world didn’t end.  He didn’t reach across the table and try to strangle me.  He didn’t come in and shoot up our office a few weeks later.  My tires never got slashed.  He was even nice enough to proofread this post for me.  This was a startup.  CJ knew that.  I think all startup employees need to really understand that.  You can get axed at any time whether it’s “your fault” or not. 

Moral:  It really sucks having to let someone go.  It’s even worse when it’s not because they suck at their job.  But it comes with the job.  Make sure people understand that when you bring them in.  CJ did, and it worked out.

UPDATE: Everybody loves CJ!  Comments via email and over at Hacker News made me realize I should have given you all an update on what CJ is doing now.  Well, he’s doing just fine, and told me if you want to chat with him, feel free to send him a note at @waltz. 

Thanks
Thanks to Christian Bryan (CJ), Kimberley Byer, and Kate Angilly for proofreading drafts of this post.