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Some of this is really good advice. But there's a fine line between shielding employees from the emotional burden of the full truth and creating an emotional bu

Some of this is really good advice. But there's a fine line between shielding employees from the emotional burden of the full truth and creating an emotional burden by hiding some of the truth. Generally speaking, smart people are pretty good at reading a situation. But they're also pretty good at inventing narratives to fill in the gaps in whatever information you've given them. If there's a particularly glaring gap or inconsistency in your story, you're going to create a culture of uncertainty and resentment. Money is the toughest topic of all. Who's getting what, how much of it is left, how much is considered a good exit, and who gets what in that exit -- all of these things are going to be subject to open and not-so-open speculation. Accept as much, and avoid inadvertently creating sketchy or conflicting narratives by telling different things to different employees. When it comes to the financial direction and health of the company, how much you've raised is increasingly becoming a matter of public knowledge. How many employees you have is public knowledge (at least within the company). Your monthly burn rate is not public knowledge, but a smart person can arrive at a halfway decent guess. No need to get into the weeds on these topics, but be honest at the high level. I like your idea of minimizing the into-the-weeds discussions about options. Employees should be there because they believe in the company, and they should hope for the best when the company succeeds. To whatever extent possible, don't hire mercenaries -- people who are just there for the payout. Hire people who want to be there, can handle the risk, and will be more than happy when the company wins big and everyone benefits. But give them enough options so that they will win when the company wins, and so that their incentives are aligned with yours. I don't believe it's the startup CEO's job to educate her employees on the finer points of dilution, financing, liquidation preferences, etc. Any employee joining an early-stage startup should be doing that sort of homework in the first place. But it is the CEO's job to give her employees a reasonably fair deal, and to explain her long-term goals and expectations. And the CEO should not use her superior financial knowledge or position to take unfair advantage of employees who might not have as much information or financial savvy.

droopyEyelids 13y ago
> there's a fine line between shielding employees from the emotional burden of the full truth and creating an emotional burden by hiding some of the truth. And when you take it upon yourself to mediate the truth, you're put in a position of unlimited temptation with fewer people around to keep you balanced.
- bowlofpetunias 13y ago
  This. Although all of what the author wrote and jonnathanson wrote is perfectly sound, most human beings don't get it right because the temptation to hide relevant details is just too big. I've seen it happen time and time again, and anything but full transparency only works if everything goes well. But if things don't go well, which happens in the vast majority of start-ups, I've never encountered a CEO who could resist the temptation of hiding essential bits of truth after they already justified to themselves that they were "shielding employees from the emotional burden of the full truth". And when the shit does hit the fan, those employees will no longer trust the founder/CEO, with two consequences: a) If there is still an opportunity to save the company, the employees will choose to run rather than fight. After all, who fights for a leader they don't trust? b) When the ship does go down, they will not only never work for you again, they will tell all their friends and colleagues to avoid working for you. Trust is a fragile thing. Unless you know how to get it exactly right (which usually comes from getting it wrong a few times), don't mess with the truth. Hire people who can handle the truth.
  - jonnathanson 13y ago
    Just to clarify, I was arguing against "shielding employees from the emotional burden of the full truth." I used that phrase to characterize what I felt was the author's thesis, and from there, to take a few issues with it. When I said that there's a "fine line between shield...and creating..." I was basically trying to say what you guys are saying here: that 'mediating' the truth is a really dicey proposition. I may not have phrased this as clearly as I could have, as evidenced some of the responses.
jacquesm 13y ago
> I don't believe it's the startup CEO's job to educate her employees on the finer points of dilution, financing, liquidation preferences, etc. Of course it is. Explaining the rules and terms of the game makes everybody better players. It's not you against your employees, it is all of you against the world and your competitors are part of the world. If you're not even willing to explain the rules of the game to your own team how do you expect to win the game?
- walshemj 13y ago
  I agree Jonnathan needs to be careful saying stuff like that can make people think your going to rip them off good luck recruiting with that perception hanging round your neck.
  - jonnathanson 13y ago
    I have to say, I'm really baffled by this comment. I have no idea how you got to here from what I wrote. Jacques's comment I understand and respect, but yours feels like a pretty big mischaracterization of my post. I felt I argued pretty strongly against "ripping off" employees. Here are a few lines from my post: "give them enough options so that they will win when the company wins, and so that their incentives are aligned with yours." "And the CEO should not use her superior financial knowledge or position to take unfair advantage of employees who might not have as much information or financial savvy." It is never okay to rip off employees, or to take advantage of informational asymmetry to give them a raw deal.
    - walshemj 13y ago
      I wasn't saying that you thought it was ok to rip off employees. But I was talking about the how people will perceive your comment - you came a cross as taking a hardline "Caveat emptor" line. How you "present" to your employees and the public (to use a some HR jargon) is key - and if your misunderstood it can can have serious consequences - Quiet how Eric Schmidt still has a job I dont know given his propensity for gaffes that makes Prince Phillip seem diplomatic. I have worked for a boss who was a FSTE 100 director and he was very good at explaining that he couldn't always tell us every thing that he knew.

droopyEyelids 13y ago

> there's a fine line between shielding employees from the emotional burden of the full truth and creating an emotional burden by hiding some of the truth. And when you take it upon yourself to mediate the truth, you're put in a position of unlimited temptation with fewer people around to keep you balanced.

bowlofpetunias 13y ago
This. Although all of what the author wrote and jonnathanson wrote is perfectly sound, most human beings don't get it right because the temptation to hide relevant details is just too big. I've seen it happen time and time again, and anything but full transparency only works if everything goes well. But if things don't go well, which happens in the vast majority of start-ups, I've never encountered a CEO who could resist the temptation of hiding essential bits of truth after they already justified to themselves that they were "shielding employees from the emotional burden of the full truth". And when the shit does hit the fan, those employees will no longer trust the founder/CEO, with two consequences: a) If there is still an opportunity to save the company, the employees will choose to run rather than fight. After all, who fights for a leader they don't trust? b) When the ship does go down, they will not only never work for you again, they will tell all their friends and colleagues to avoid working for you. Trust is a fragile thing. Unless you know how to get it exactly right (which usually comes from getting it wrong a few times), don't mess with the truth. Hire people who can handle the truth.
- jonnathanson 13y ago
  Just to clarify, I was arguing against "shielding employees from the emotional burden of the full truth." I used that phrase to characterize what I felt was the author's thesis, and from there, to take a few issues with it. When I said that there's a "fine line between shield...and creating..." I was basically trying to say what you guys are saying here: that 'mediating' the truth is a really dicey proposition. I may not have phrased this as clearly as I could have, as evidenced some of the responses.

jacquesm 13y ago

> I don't believe it's the startup CEO's job to educate her employees on the finer points of dilution, financing, liquidation preferences, etc. Of course it is. Explaining the rules and terms of the game makes everybody better players. It's not you against your employees, it is all of you against the world and your competitors are part of the world. If you're not even willing to explain the rules of the game to your own team how do you expect to win the game?

walshemj 13y ago
I agree Jonnathan needs to be careful saying stuff like that can make people think your going to rip them off good luck recruiting with that perception hanging round your neck.
- jonnathanson 13y ago
  I have to say, I'm really baffled by this comment. I have no idea how you got to here from what I wrote. Jacques's comment I understand and respect, but yours feels like a pretty big mischaracterization of my post. I felt I argued pretty strongly against "ripping off" employees. Here are a few lines from my post: "give them enough options so that they will win when the company wins, and so that their incentives are aligned with yours." "And the CEO should not use her superior financial knowledge or position to take unfair advantage of employees who might not have as much information or financial savvy." It is never okay to rip off employees, or to take advantage of informational asymmetry to give them a raw deal.
  - walshemj 13y ago
    I wasn't saying that you thought it was ok to rip off employees. But I was talking about the how people will perceive your comment - you came a cross as taking a hardline "Caveat emptor" line. How you "present" to your employees and the public (to use a some HR jargon) is key - and if your misunderstood it can can have serious consequences - Quiet how Eric Schmidt still has a job I dont know given his propensity for gaffes that makes Prince Phillip seem diplomatic. I have worked for a boss who was a FSTE 100 director and he was very good at explaining that he couldn't always tell us every thing that he knew.