This is an excerpt from the book After the Idea: What It Really Takes to Create and Scale a Startup, written by Julia Austin, published by Basic Venture, an imprint of Hachette Book Group, Inc., June 2025.
Is the person failing the system, or is the system failing the person?
Ahead of giving someone performance feedback that may lead to letting them go, there is usually a suspicion building in your head that they are not working out. You may also be hearing grumblings from other team members, customers, or investors, and signs are pointing toward a need for separation. Before you decide to separate, and doing so carefully to avoid legal issues, I advise you first do a gut check to ensure the person is indeed failing versus the system failing the person. Questions to ask yourself and/or their manager:
Did you set this person up for success?
Did they have the right information, tools, and connections to team members and customers to meet expectations? For example, if you hired someone to launch a new marketing campaign, but you have not had time to sit with the new marketing person to walk them through your vision for the business, is it any wonder that they are struggling to get the messaging right? There’s also a classic example of an unproductive engineer who is waiting for a new product manager to come on board to specify what needs to be built. They are doing the best they can to guess priorities, but are they actually failing?
Before giving feedback to a team member ... ask yourself if you are either partially or completely complicit in creating the problem.
My executive coach when I was at DigitalOcean was Jerry Colonna. One of his famous quotes is: “How am I complicit in creating the conditions I say I don’t want?” This question urges us to take a step back to be sure we are not creating the conditions, in this case, that may be causing an employee’s poor performance. Before giving feedback to a team member, putting an individual on a performance improvement plan, or firing someone, ask yourself if you are either partially or completely complicit in creating the problem (this works in our personal lives too!). A 30-60-90-day plan can help mitigate this type of situation for a new hire, but systems can fail a person later in their journey.
Are you being clear about what “done” looks like?
World-renowned author, speaker, and professor Brené Brown’s term “painting done” means to be completely clear about the “expectations of what the completed task will look like, including when it will be done, what you’ll do with the information, how it will be used, the context, the consequences of not doing it, the costs—everything you can think of to paint a shared picture of the expectations.” If we do not paint done, it’s likely people won’t meet our expectations.
It is extremely common for founders who are moving so fast that they forget that no one knows exactly what they are thinking. This causes impatience and frustration on their part when employees are just doing the best they can with the information they are given. And sometimes, even if you think you are the nicest and most approachable founder ever, employees can be intimidated by the founder/CEO hat you wear.
They may fear embarrassment (or worse) if they ask clarifying questions. If you think you’re not being clear or may be unintentionally intimidating your team, adopt the painting done concept and invite them to ask questions and get clarity. A simple “Do you have any clarifying questions?” at the end of a discussion will not only make you more approachable but will also create a more inclusive culture where the team can be curious and feel safer and more grounded when they need to ask for help. If the founder/CEO paints done and is open to clarifying questions, this approach will likely permeate across the organization.
Better than nothing
Founders struggling with poor performers often say things like, “I’d rather have an employee who’s good enough for now than go through the hassle of performance management or firing them and taking the time to find their replacement and get someone new up to speed.” And this may in fact be okay. What’s important in these cases is to have a plan that will mitigate this issue in the longer term.
Just be honest with yourself if this is the situation, and commit to a plan that you feel you can accomplish.
It could be that a poor performer is a single point of failure (SPOF) who has the only knowledge of a particular part of the business (such as your code base or customer support tool). Your plan could be to keep them until you can hire one or two new people after a fundraise process who will assume this employee’s role. Once these new hires are on board and up to speed, you can let the poor-performing SPOF go. Or, perhaps you have someone who is a culture carrier and adds value to the business in other ways, such that their mediocre performance is okay for the sake of the team’s morale.
Unless you are running out of working capital, an employee or two like this will not drag down the whole business in the near term, and maybe, as you scale, more experienced hires will come on board who can manage them and improve their performance. Just be honest with yourself if this is the situation, and commit to a plan that you feel you can accomplish. As with any poor performer, you’ll likely have to deal with it at some point, so don’t put it off forever.
When the writing’s on the wall
There are some employees who just need to be fired for cause (legal, ethical, or other serious issues). If so, do it and get it over with. No time to waste, and while it can be painful, it’s part of the job. More commonly, though, startups let go of people because of the reasons noted at the start of this chapter. Then, there are those who, no matter how much you want to improve your leadership skills and the systems to support them, you may have to give up on because you just don’t have that time. I have had several employees who, had we had the time to invest in their growth, probably would have thrived in our company, but alas, we had to let them go. I’ve also had my share of “regrettable resignations”—employees who, had we taken a beat and realized we were not serving them well, we may not have lost to another company. There is no perfect solution here other than to work at it when you can and cut your losses when you can’t.
My good friend Kim Scott is a leading expert in performance feedback, bestselling author, and cofounder and CEO of Radical Candor, LLC, a company that promotes uncompromising honesty in the workplace to improve communication. She suggests that when firing an employee, it’s crucial to be direct and provide clear, specific feedback about their performance issues, even if it’s difficult, rather than avoiding confrontation or being overly nice. This approach aligns with her philosophy of balancing caring personally with challenging people directly and avoids what she terms “ruinous empathy”: not giving necessary feedback for fear of hurting people’s feelings, which can ultimately be detrimental to the individual’s career development.
Regardless of whether you’re cutting your losses or you just have a classic firing-for-cause situation, have a standard approach to letting people go and seek counsel from an HR person and a lawyer to be sure you follow legal guidelines when it comes to offering severance and how you want to handle equity and vesting schedules for the people.
Excerpted from “After the Idea: What It Really Takes to Create and Scale a Startup.” Copyright © 2025 by Julia Austin. Available from Basic Venture, an imprint of Hachette Book Group, Inc.
