Your job as a CEO: Hire and Fire

Hiring is hard ; firing is painful

When I joined Techstars, we had a lot of meetings, presentations, and talks with mentors and potential advisors. One presentation from David Mandell struck me. David said in this presentation that a CEO has three jobs:

1. Communicate a vision

2. Hire and fire

3. Do not run out of money

I already wrote before about communicating a vision. This blog post goes into the second topic: hire and fire.

Hiring is hard

Hiring is extremely hard. You have no idea if a candidate:

1. Qualifies for the job: it is extremely easy for a candidate to fake potential skills

2. Has a strong work ethic: you cannot gauge in a one-hour interview if the employee will work hard when a major issues arise

3. Is a good culture fit: it’s only after a few days or weeks you see if a candidate fits

With time, I found that the most important quality for an employee is not their skills or experience but their work ethic, curiosity, and willingness to learn. You can teach new technology. But you cannot teach work ethic and curiosity. Those skills need to be learned at the youngest age, which is why a good education based on first principles is so critical.

Firing is painful

Firing is not hard. It’s painful.

Firing someone is like telling your eight years old daughter that her dog must be put to sleep. You explain the situation calmly and try to make it less painful for everybody to accept the reality.

It’s not fun.

Sometimes, people cry or deny what is being presented. But they eventually accept the reality, move on with their lives and find a new position where they thrive.

Firing people sucks. I did not sleep for a week when I had to fire my first employee. But it’s always better for everybody.

More with less

Hiring people is like giving away candies: it’s easy to do and everybody loves it.

Firing people is asking to go on a diet and nobody enjoys it. 

CEOs love giving away candies. But they are reluctant to go on a diet. Like the dog of their eight-year-old daughter: they keep the situation lingering day after day. It’s the cruelest thing to do: not only the dog suffers every single day but your daughter lives with the expectation that she will live happily ever after with her dog. The same applies to companies: keeping an employee that should go is cruel. Not only it adds dead weight to your company, but more importantly, it prevents them from developing their careers in a position where they can thrive.

Underperforming or unnecessary employees are like fat. You do not need them to function. They prevent you from running fast and executing. And when you have too many of them, it may kill your company. Your job as a CEO is to make sure your company is lean and executes fast. Your job is to fire when it’s time to do it. You owe it to your employees.

I am not saying to fire people as soon as they do not provide value. But when you know one employee is not productive, not a fit or not providing value, let them go. Do it with respect. Accept that letting go of one employee is also your own failure. Support and help them find a new position if possible: one employee not performing at your company will thrive somewhere else.

The example of Twitter 2.0

Twitter 1.0 (e.g. pre-Musk) is a great example of a company that was bloated with a ton of unnecessary employees. The company added engineers at a very fast pace. Between 2017 and 2021, Twitter doubled the number of employees without adding meaningful products yielding more revenue.

Twitter is the prime example of the company being so bloated that it was really hard to move and execute. With more people comes more bureaucracy, processes, and internal politics.

Number of Twitter Employees (source statistica)

When Musk took over Twitter, he started to lay off Twitter staff at a very rapid pace. With 50% fewer employees, Twitter kept operating and running as before.

But Musk did not only cut the fat. He started to cut bones and muscles, which also prevents you from moving and falling. Unsurprisingly, Twitter experienced 6 major outages since Musk took over.

Stay lean and focus on executing and providing value to your users and customers. Do not hesitate to cut the fat. But do not cut too much or your core business will be impacted very quickly.