Step up from Start Up.
Entrepreneurs tend to be highly driven, motivated, and passionate individuals, which is exactly the skill-set you need to get a Start Up off the ground. However, when it’s time to step up from Start Up to established business, this skill set can often be a disadvantage, as the entrepreneur can struggle to see the difference between their own role within the business, and that of their employees.
In my former role as a business lecturer, I helped students to devise business plans for theoretical businesses. I remember with great clarity one conversation with a student when I discovered their idea for expansion was to get people to work for the company in exchange for free tickets to the company’s events, and taking them to the pub afterwards ‘to make them feel valued.’ I argued that what they had just described was essentially slave labour (albeit that the person would have the choice to say ‘thanks but no thanks’ to the offer!) The student then argued that there wasn’t the money to pay the workers, so how could they make the business grow? I said, “not like that!”
I was thinking about this exchange recently as I chatted to a friend who is currently in-between jobs after a nasty experience with a Start Up. As we talked, I realised I knew several other (highly successful and professional) people who had recently been burned by their experiences with Start Ups, and I began to see that while on the surface all the situations were different, they all had the same root cause in common.
In the case of my friend, the person was taken on as an administrator, on minimum wage, with a job description covering tasks like filing, answering phones, typing etc. On their first day of work, they discovered that there were no administrative systems in place – no filing system, no equipment, not even a phone! They were expected to procure and create all the resources and systems needed for the successful running of the business – in effect to act as Operations Manager, for an administrator’s wage. They raised the issue and were told to just get on with it, so they gave notice, whereupon they were told to leave immediately as they didn’t ‘have what it takes’ to work for a Start Up.
In a further case, the person is a well-known expert in a highly-specialised field, to operate in which requires specific statutory qualifications and expertise. The person was told they were being brought on board by the Start Up because of their expertise and reputation, and for the first few months this appeared to be the case. The person helped ensure that the Start Up met regulatory requirements, and passed all the checks needed in order to operate within the law. Then, as soon as the Start Up reached the point that it had met all the statutory requirements, the person was driven out. It appeared that the Start Up were using them to make themselves look compliant on surface level, but then wanted to operate in a less than compliant manner, so they had no further use of the person.
In yet another case a Start Up decided that they needed a strategic management post to help the owners develop the business. They appointed an experienced strategic manager to the team, but within weeks became frustrated that the person was ‘trying to change things,’ ‘making decisions,’ and ‘challenging our ideas.’ They seemed oblivious to the fact that these are in fact the things that you would expect from a strategic manager! The person was fired, and told it was because they were not ‘suitable’ for the role, when in fact it was just that the company had advertised for the wrong role in the first place!
In a final case, a contact of mine was employed at senior level in a Start Up as it made the transition from idea to fully operational business. The person and their new team managed to get the entire business off the ground but at great personal cost to each team member. My contact, who was line manager for the whole team, tried to explain to the business founders that the current set-up was unsustainable, that the team was already burning out, and that the goals they wanted to achieve were not possible without more employees. This was ignored, so in order to demonstrate how dire the situation was, the entire team (who were all part time) only worked their hours for one week, in an attempt to show the business owners what could reasonably be achieved in their current situation. At the end of that week, my contact was fired on the grounds that they ‘weren’t prepared to put the required effort in.’
What all these situations have in common, is a misunderstanding of the role of an employee versus a founder in a Start Up. Founders have to put the extra effort in because the business belongs to them, and they reap the rewards of this later down the line as the business becomes successful. Employees on the other hand, are rewarded for the work they do according to the terms of their contract. An employee should not be expected to work extra hours or take on extra responsibility for free, just because the business is a Start Up.
If you are stepping up from your Start Up by making employees work extra hours, or take on extra responsibilities, for no extra pay, your business is not ready to make that transition. The fault lies with you as the business owner, not with your employees.