A little more a year after the launch of StrongLoop, a corporate API startup eventually acquired by IBM, we were out on skis. It was my fault: having built a vast funnel, we expected our product to have a specific sell-through rate and I was optimistically hired in engineering, customer service, marketing and sales. However, the sales cycles were long, the burn rate was too high, and we had too many highly skilled people who were a little bored. It was time to orchestrate a strength reduction.
I've been fired a few times myself, once from a pivotal startup and again during the 2001 recession, so I knew what that felt like. I had also been the manager of a larger company that fired employees, so I had seen the corporate playbook. But as CEO, I had personally sold these people our vision, cramming them into a shoddy little office with them for months or years - it felt very personal. Back then, the job market was robust: I didn't worry about team members finding new jobs. Today it is more uncertain.
With many startups under the pressure of a pandemic-fueled economic crisis, I interviewed several CEOs who have had to orchestrate COVID-19-related layoffs to capture (what I believe) are some of the best practices to scale properly and with compassion.
Put people before projects
One company had a pending product launch, but some renewals were pushed due to uncertainty based on COVID-19. Meanwhile, the council had decided to extend the track for more options. The question was, should the company complete the product launch and notify employees who later lose their jobs? Or should they tell employees in advance, risking losing focus as some team members (correctly) start looking for work?
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