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One of the hardest parts of leading a startup (or any company really) in a major downturn is managing your employees expectations for their career growth. Many

One of the hardest parts of leading a startup (or any company really) in a major downturn is managing your employees expectations for their career growth. Many of them will have joined a rapidly growing company - ones with the most rapid career path opportunities - only to see the rug pulled out. Imagine joining a company as a software engineer with expectations of becoming a lead and then a manager? Imagine joining as a manager and expecting to grow your team from 5->50? Managing these expectations as an executive and coaching your team through the crisis is a vastly underappreciated skill. We focus too often on what your equity will be worth as a means of motivation. Convincing a talented engineer whose equity went from $1m->zero overnight that all it takes is 'grit' to make through to the other side, that's when experienced management pays off.

JoeAltmaier 7y ago
And its not all deception. For all those that are convinced to stay on a sinking ship, there are a few that flee only to discover they missed the big payout. I know one who was an early Tandem employee. He left because he had only a Masters' degree, among all those PhDs. They never respected him, never considered him for responsibility nor much equity. So he left to pursue another degree. Later of course had he stayed, he'd have been a millionaire many times over from even the little equity he'd had. Another was working on a 3270 emulator for the PC, only to have IBM announce their upcoming product just as his was about to release. So he left the floundering company to get an MBA. Later they pivoted to release the network part of their software as Banyan Vines, which was a worldwide best-seller. And so on.
- icedchai 7y ago
  Not all deception, just mostly... For every one of these examples, there's tens, probably thousands, of people who stayed on at a "promising" startup. They drank the juice and swallowed the lies, only to find out their equity was worth nothing or close to it. The truth is they would've been better off at the megacorp, investing their spare change into the public markets.
- veeralpatel979 7y ago
  By Tandem do you mean the YC-backed virtual office startup (https://tandem.chat https://tandem.chat)?
  - icedchai 7y ago
    More likely this Tandem, the fault tolerant computer company, from the 80's: https://en.wikipedia.org/wiki/Tandem_Computers https://en.wikipedia.org/wiki/Tandem_Computers
    - JoeAltmaier 7y ago
      Yes
  - phonon 7y ago
    https://en.wikipedia.org/wiki/Tandem_Computers https://en.wikipedia.org/wiki/Tandem_Computers
- ineedasername 7y ago
  Most startups fail. Most employees get nothing beyond the experience and the paycheck they earned at the time. It's important to keep that perspective when considering outliers of the "if only I had done <x>!" variety. Which isn't to say employees should always abandon ship, just that they should be clear-eyed. It's a great time to really consider if the risky $1m+ potential equity payout you signed on for still looks as shiny & filled with potential right now. Heck, even if it is still a great idea with solid execution, if they can't survive the next 6-12 months then it won't matter.
draw_down 7y ago
Hmmmmmm... I wonder exactly what sort of coaching we’re talking about here. If those people are better off going to places where their career still can grow (perhaps large companies), the right thing to do is encourage them to make that move. Are we talking about that? Is that talented engineer really best served by a pep talk about grit? Or do you just need them to stick around?
nickff 7y ago
Your points are all great, and I agree with them completely. I'd like to add that Ben Horowitz has given some great talks on the subject, and I found his book incredibly useful. [1] https://www.youtube.com/watch?v=sqI7fa04atc https://www.youtube.com/watch?v=sqI7fa04atc [2] https://www.goodreads.com/book/show/18176747-the-hard-thing-about-hard-things https://www.goodreads.com/book/show/18176747-the-hard-thing-...
foobiekr 7y ago
I appreciate what you are saying but the reality is, at least from my personal experience through a number of crises, is that once the stock is significantly damaged, stock-compensation-heavy companies should just expect to lose their top tier talent. I have seen it happen over and over. It is better just to accept that it will occur. I have never, ever seen experienced management be able to recover the situation. What really happens, though, is: if your company was not already running lean, and had a good amount of redundancy, you will lose some of your top tier talent but not all of it, due to reasons such as inertia, sunk-cost-fallacy thinking, true belief, family circumstances beyond your knowledge, and so on. One of the lessons that crises teaches is that slack in the system and redundancy is actually good. The experienced managers then credit themselves instead of these factors. One interesting takeaway is that lean startups, that can't lose more than one or two of their senior engineers, die in these situations.
jariel 7y ago
"Imagine joining as a manager and expecting to grow your team from 5->50?" This is extremely rare and opportunistic situation, that some people may not get their 'promised Ferrari right away' should only be a problem for those with the lack of maturity to grasp what's happening in this world. Also consider that said situation is not isolated and almost everyone is in the same boat.

JoeAltmaier 7y ago

And its not all deception. For all those that are convinced to stay on a sinking ship, there are a few that flee only to discover they missed the big payout. I know one who was an early Tandem employee. He left because he had only a Masters' degree, among all those PhDs. They never respected him, never considered him for responsibility nor much equity. So he left to pursue another degree. Later of course had he stayed, he'd have been a millionaire many times over from even the little equity he'd had. Another was working on a 3270 emulator for the PC, only to have IBM announce their upcoming product just as his was about to release. So he left the floundering company to get an MBA. Later they pivoted to release the network part of their software as Banyan Vines, which was a worldwide best-seller. And so on.

icedchai 7y ago
Not all deception, just mostly... For every one of these examples, there's tens, probably thousands, of people who stayed on at a "promising" startup. They drank the juice and swallowed the lies, only to find out their equity was worth nothing or close to it. The truth is they would've been better off at the megacorp, investing their spare change into the public markets.
veeralpatel979 7y ago
By Tandem do you mean the YC-backed virtual office startup (https://tandem.chat https://tandem.chat)?
- icedchai 7y ago
  More likely this Tandem, the fault tolerant computer company, from the 80's: https://en.wikipedia.org/wiki/Tandem_Computers https://en.wikipedia.org/wiki/Tandem_Computers
  - JoeAltmaier 7y ago
    Yes
- phonon 7y ago
  https://en.wikipedia.org/wiki/Tandem_Computers https://en.wikipedia.org/wiki/Tandem_Computers
ineedasername 7y ago
Most startups fail. Most employees get nothing beyond the experience and the paycheck they earned at the time. It's important to keep that perspective when considering outliers of the "if only I had done <x>!" variety. Which isn't to say employees should always abandon ship, just that they should be clear-eyed. It's a great time to really consider if the risky $1m+ potential equity payout you signed on for still looks as shiny & filled with potential right now. Heck, even if it is still a great idea with solid execution, if they can't survive the next 6-12 months then it won't matter.

draw_down 7y ago

Hmmmmmm... I wonder exactly what sort of coaching we’re talking about here. If those people are better off going to places where their career still can grow (perhaps large companies), the right thing to do is encourage them to make that move. Are we talking about that? Is that talented engineer really best served by a pep talk about grit? Or do you just need them to stick around?

nickff 7y ago

Your points are all great, and I agree with them completely. I'd like to add that Ben Horowitz has given some great talks on the subject, and I found his book incredibly useful. [1] https://www.youtube.com/watch?v=sqI7fa04atc https://www.youtube.com/watch?v=sqI7fa04atc [2] https://www.goodreads.com/book/show/18176747-the-hard-thing-about-hard-things https://www.goodreads.com/book/show/18176747-the-hard-thing-...

foobiekr 7y ago

I appreciate what you are saying but the reality is, at least from my personal experience through a number of crises, is that once the stock is significantly damaged, stock-compensation-heavy companies should just expect to lose their top tier talent. I have seen it happen over and over. It is better just to accept that it will occur. I have never, ever seen experienced management be able to recover the situation. What really happens, though, is: if your company was not already running lean, and had a good amount of redundancy, you will lose some of your top tier talent but not all of it, due to reasons such as inertia, sunk-cost-fallacy thinking, true belief, family circumstances beyond your knowledge, and so on. One of the lessons that crises teaches is that slack in the system and redundancy is actually good. The experienced managers then credit themselves instead of these factors. One interesting takeaway is that lean startups, that can't lose more than one or two of their senior engineers, die in these situations.

jariel 7y ago

"Imagine joining as a manager and expecting to grow your team from 5->50?" This is extremely rare and opportunistic situation, that some people may not get their 'promised Ferrari right away' should only be a problem for those with the lack of maturity to grasp what's happening in this world. Also consider that said situation is not isolated and almost everyone is in the same boat.