As a startup founder, you wear many hats, including recruiter-in-chief. Assembling a team of high-achievers is crucial, but you won't always get it right. Knowing when and how to part ways with under-performers is a vital skill that you need to learn for the long-term success of your startup. 

Startups are a labour of love, and the early team members are often close to the founders - either as friends, previous colleagues, or as people who've been deeply involved in the formative stages of the venture.

This emotional attachment can make it exceedingly difficult to assess and act on under-performance objectively. If you're wracked with guilt, try to think about it this way:

"Keeping someone in a job where they are unlikely to succeed could be thought of as an act of cruelty ... letting them go, to find something more suitable, is an act of compassion."

The Domino Effect on Company Performance

In a lean startup, every employee counts. Under-performers can consume a disproportionate amount of resources, hindering progress. Whether it's missing development deadlines or failing to hit targets, the effects of under-performance ripple through the company, affecting everyone's workload and the startup's ability to execute its vision. At seed or Series A level, finances are usually tight. The cost of retaining an under-performing team member goes beyond their salary; it also includes the opportunity cost of not having a high-achiever in their place.

The Morale Quagmire

The problem is usually visible for all to see, and its persistence can lead to resentment among team members who are pulling their weight. If you don't act, the rest of the team will lose respect for you - even if the person in question is their friend.  The added stress of managing someone who is struggling can detract from your focus on core activities such as product development and fundraising. Tolerance for underperformance sets a precedent that can dilute your company culture and values over time. 

When to Say Goodbye

Always give underperforming employees a chance to improve. Clearly communicate what needs to change and set a timeline for reassessment. After the stipulated period, assess the performance and make a call. If there’s no significant improvement, it's time to part ways. Make sure you consult a legal advisor to ensure that you are complying with all laws and regulations when letting someone go.

How to Let Go

When it comes to pulling the plug be honest but compassionate - share the reasons for the decision without berating the individual. Offer support - whether it's severance pay, career advice, or offering to serve as a reference for future opportunities that better match their skills, try to support the individual in their next steps. Address the situation with the remaining team members without divulging confidential information. This clears the air and resets the collective focus on the company's goals.

Learning to let go of under-performers is an essential skill for startup founders. While emotionally challenging, the failure to act jeopardises your startup’s mission and undermines your team’s morale. Mastering this aspect of leadership ensures that you're nurturing an environment where everyone - your startup, your team, and even those you have to let go - has the best chance to thrive.

Starting a company based on scientific research or groundbreaking technology is no small feat. The journey from the laboratory to a viable business often demands a broad skill set, ranging from scientific expertise to entrepreneurial acumen.

Yet, one of the most challenging transitions scientific founders face comes not from the lab or market, but from within their own boardroom - when new investors suggest it's time for the founder to step aside as CEO in favour of a more commercial leader, usually around the time of a Series A funding round.

Initial Reactions: Fear and Loss of Confidence

For a founder, being asked to step aside can be an emotionally fraught experience. After all, the company is often the embodiment of years of hard work and personal sacrifice. Feelings of rejection or inadequacy may emerge, leading the founder to question their abilities and the value they bring to the enterprise they've nurtured from the ground up.

The Silver Lining: A New Leader Can Unlock Untapped Potential

Although initially challenging to accept, bringing in a commercial CEO can offer a wealth of benefits, both to the founder and the company as a whole. A CEO with a proven track record in business scaling, marketing, and operations can accelerate the company’s growth, expand market reach, and drive profits. Their different set of skills can complement the founder's deep scientific or technical knowledge, thus forming a well-rounded executive team.

From CEO to Subject Matter Expert: A Fulfilling Transition

Stepping aside from the CEO role doesn't mean a diminished role in the company. In fact, the opposite is often true. As the subject matter expert in the business around the science, the founder can now concentrate on research and development, innovation, and other scientific aspects that initially fueled their passion.

In this specialized role, they can continue to make significant contributions to the company without the burden of day-to-day operations and managerial responsibilities. Over time, many founders find that they enjoy this more specialized role and the opportunity it offers to dive deep into the science or technology that excites them.

The Responsibility of the Recruiter: Sensitivity and Support

As for the person tasked with recruiting the new CEO, a human approach is crucial. It’s essential to appreciate the emotional investment and personal journey of the outgoing CEO, acknowledging that stepping aside is not an easy decision. Providing transparent communication throughout the process can mitigate some of the emotional challenges involved.

Support shouldn’t stop once the new CEO is in place. Continued mentorship and regular check-ins can be valuable for the outgoing CEO as they adjust to their new role. This period is an opportunity for both personal and professional growth, but it often requires ongoing emotional support.

Embracing the Change

Transitioning leadership in a scientific startup is more than just a business decision; it’s an emotional journey for everyone involved. When handled with sensitivity and thoughtful planning, the transition can lead to a stronger, more successful company and happier, more fulfilled team members.

​The founder, while stepping back from the daily grind of being CEO, can relish the role of being the guiding scientific force behind the company. In doing so, they will not only continue to contribute to their venture's success but also find personal fulfillment in a role that leverages their true strengths and passions. to edit.