> Why is it so bad to have a bad employee among the first employees? Bad employees are a cancer. They literally spread and infect otherwise healthy employees.

> Why is it so bad to have a bad employee among the first employees? Bad employees are a cancer. They literally spread and infect otherwise healthy employees. When a bad employee is retained another employee who is at a similar level who does good work begins to see that management is unfair. It is not fair to compensate two people equally when their work is not equal. Also, the good employees begin to see that management is failing to do their job managing people. And the list goes on and on. In a startup the team is very small and resources are tight. For example, if there are 2 founders and 1 employee (who's bad), then 1/3 of the company's capacity is being wasted. Actually, it's worse than that. What happens is that the 2 founders waste additional time "managing" this employee, discussing how to handle the situation, etc. Basically, it's a big time suck at a point in the company's life when time is extremely valuable.