Why People Leave Startups - MyStartupLand

Working for a startup is, by all means, an adventure. When I graduated and was looking for a job, I wasn’t even aware of what a startup was. What I knew, however, was that I wanted to keep learning new things and contribute fast to the company I was going to join. I had a few interviews with big companies, but nothing really fell into the right place. By chance, I scored an interview with a growing startup in Europe. The promise was matching my expectations. Lots of responsibilities from day one, new things to learn daily, and of course a young and fun environment.

This is now my 8th year in the startup world. I have changed 5 companies and launched also my own startup in between. It’s a love and hate relationship the one I have with the startup world. The more I hate it, the more I feel attracted to it. Every now and then, I look into the “grown-up world” and talk with decent sized companies, but they fail to excite me, so I revert back to this crazy world.

In 8 years, I have seen it all (hopefully) either first-hand or through friends. Hyper-growth and hyper-firing, no product or business strategy for months, a CEO using a fart spray (yes, that’s a thing) while employees were trying to make money for his company, bad or no communication between management and employees, evil managers… you get the idea. It’s a fun, fun world.

I live in Berlin, the so-called Silicon Allee. Although not as crazy as the San Francisco scene, Berlin is one of the biggest hubs in Europe for successful startups. In all those years, I went from being just one employee of many up to management roles. The startup companies I have worked for varied in size, from 40 up to 250 people.

There are certain patterns that repeat themselves across startup companies. Despite sometimes being obvious, some people are still surprised by the reasons why people leave startups.

It’s Not Me, It’s You… Really!

Break Up - MyStartupLand

In my “startup career”, I experienced different feelings about this world. There were times, I woke up and thought I wanted out of it. Go and work for a bigger company, or at least try to get hired. Live a simpler life. No crazy deadlines, no calls or emails to be answered at 11 PM.

Other times, I felt annoyed by the size of the startup I was working at because everything was becoming too big, slow and bureaucratic and wanted to jump into a smaller ship. Smaller team, fewer meetings, more time to do what matters.

Yes, I have a difficult relationship with the startup world. After all this time, though, I realized that I prefer the craziness to the boredom, the insecurity to the routine. The reality, however, is that when you work for a startup, you need to take extra care of your people. As a startup founder, you are in constant competition with other companies trying to steal your talented employees. Startup founders and CEOs need to realize that when employees leave startups, most of the time, the responsibility falls onto the startup itself, not the employee. Stop blaming the outside world, start looking inside.

Hiring The Wrong People

The startup world is not for everyone. It requires a different level of commitment compared to “standard” companies. Employees are expected to deliver fast results and sometimes go the extra-mile, despite not being rewarded for it.

When hiring for your startup, you need to understand who is in front of you and compare that with the current stage of your company. Is this person going to deliver on what you expect? Do you know what to expect from your employees at this point in time? Not everyone is made for the startup world and that’s fine. Startups are exciting, especially for employees coming from bigger companies, however, are they the right match?

In startups, most of the employees are expected to get their sh*t together, find solutions by themselves and deliver results. Most of the time, there are no set processes or the one in place are wrong.

TIP: Ask the right questions. The “Startup-stage-culture-fit” is a real thing. This is different from your company culture. Of course, you still need to understand whether this candidate fits your company culture, but that’s something else. Match the people you hire with your company stage.

Promoting The Wrong People

Another reality in the startup world is that most of the time, the management team is not really ready for the task. In startups, usually, employees who are great at their job get a chance to become a manager. However, being a good employee doesn’t automatically translate into being a good manager.

Promoting the wrong people in management roles will make people leave your startups. Managers are crucial, especially if your company is made of a young workforce. There’s a great book that touches on this point “The No Asshole Rule“.

Now, you might ask, if someone is not a good manager, does it mean that they are assholes? No, in theory, it shouldn’t be that way. However, 9 out of 10 (not scientifically proven, but first-hand lived), most bad managers are also a bunch of assholes, in a way or another.

As a startup founder, you need to make sure that you follow this rule consistently. The moment you get off track and promote someone, who doesn’t deserve it, people will notice and start thinking about leaving.

If you are in doubt, use the diagram below and you will have fewer problems.

The No-Asshole Rule - MyStartupLand

TIP: Aside not hiring or promoting assholes, makes sure to invest in your people. Management training led by external trainers can have a great impact on those who need it. Remember though that the training itself is not the end-point. You will need to follow up and make sure the learnings are applied.

TIP 2: If you are a startup founder or a CEO and also an asshole… well, I guess you skipped this paragraph.

Having Unrealistic Expectations

Expectations in startups are usually insane. However, there is a thin line between insane and unrealistic.

Insane expectations are when you want someone to deliver a report by the end of the day and it’s 5 PM. Or, you expect someone to fix something on a weekend. These are insane expectations, especially in “normal companies”. However, people who work in startups are usually OK with them and actually get excited with these requests.

For example, if my boss sends me an email at 10 PM, while I am chilling on the couch, and by the title of the email I have the feeling that it might be urgent, I usually read on and reply. The same thing happens in the morning when I wake up and check emails from work before I even get a coffee. Is it insane? Yes, but I am OK with it.

Unrealistic expectations, though, are when you expect a trainee to do any of the above, or when you want your people to deliver a project within a week, but not even with the double of the team, it would be possible. Even when you ask to reach certain numbers, but the product is failing your sales team is an unrealistic expectation (salesman rant!).

Having unrealistic expectations will drive away employees from your startup.

TIP: Set some boundaries. Understand which employee can go the extra mile repeatedly without suffering. Don’t expect people to go the extra mile every single time. If you have high expectations, make sure your company is supporting the people and that you hire the right candidates.

Fostering Talent Is Not A Substitute For A Decent Salary

Startup Low Salary - MyStartupLandA low salary is a subjective thing. Employees will have a different perspective on what they are worth. However, I have worked in companies where “We pay less because we give you the opportunity to grow and learn new things” was part of their internal selling point. Sadly, people fell for it.

Although it might be true that not all startups foster talent in the same way, giving your employees a possibility to learn and contribute more to the growth of the company is not a replacement for a decent salary. Yes, they are learning more, but it is for YOUR company, not theirs. Don’t forget that!

It is also true that some employees also think they deserve a higher salary because they have been a certain amount of time in your company. This is very wrong and this is on you! People should not get an increase in salary, or title promotion for that matter, just because it’s the year mark. Employees need to earn whatever they get, not feel entitled to it. Yes, it might be easy to give everyone a promotion and a salary increase after a year, but is that the example you want to set?

TIP: If employees leave because they think they deserve more, talk to them and understand what is driving their assumptions. If you don’t agree, point that out and create a plan. However, be aware that if in other departments, you have adopted different standards, then people will leave your startup.

TIP 2: Don’t even try to give virtual shares instead of a salary increase. Virtual shares are a joke, most of the time. It can be a nice bonus if the company succeeds but be realistic, that’s not something people can use to eat, employees will still need money.

Creating Insecurity Overall

Startups are not always for the long-term. Millions are born daily, millions die daily. Insecurity, however, is a state of mind you, as a startup founder or CEO, create by not having a proper plan or implementing the right communication strategy.

Insecurity comes from different things. Firing randomly people without explanation. Having a failing product and demanding results. Implementing company changes without communicating this correctly. Insecurity comes from a lack of communication.

Employees feel insecure because they think they might be the next one on the line or the company might go down. Being a startup CEO or founder is not an easy job. It becomes more complicated if you don’t share what’s happening. You can either take the steps yourself and come forward (that would be amazing) or delegate to your managers the task, regardless of which one you go for, communication is key.

TIP: Being busy is not an excuse to ignore issues or your people. Take the time to have an open forum of any size. Foster a culture where people feel OK to share feedback, even anonymously. There’s always room for improvement.

TIP TO EMPLOYEES: If you don’t like feeling insecure, don’t join a startup! If you feel insecure, but still love startup, speak up!

Ignoring Processes & Policies

This is probably a consequence of all points made above. Wrong people, wrong managers, bad CEOs, often ignore those little-established processes and policies. Don’t be that person!

Working in a startup, already implies that there are very little processes and policies. For employees, feeling that at least those are in place and followed is very important. When exceptions are made or policies apply only to the “low-class” employees, then people will leave your startup. It’s not that complicated. Follow the rules you have put in place.

TIP: Avoid those situations by being an example. If there are exceptions, for whatever reasons, then, once again, through clear communication you can make people feel better and more secure.

 

Working for a startup is a roller-coaster. Not everyone can do it. Some people go through it and then run away. Some others stay and enjoy the ride. Regardless of who your employees are, it’s important you understand, as a founder or CEO, that people will leave your startup eventually, can you make that journey easier?

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