How do you deal with a co-founder that seems to be becoming more of hassle than an asset?

Evan Walker Esports Manager at DraftKings, Inc.

March 7th, 2015

I started a company with a friend of mine who was really into it at the start and would go through spurts of quality work for weeks/months at a time then just need to be micromanaged non-stop. Lately he seems to be more of a liability than anything and won't even do simple things like work on individual goals for the start-up so we can build our company goals. I have to ask him multiple times a week if he has finished what we've discussed and usually it takes a week or two before anything is done.

What have you done in the past? How have you dealt with difficult workers or someone that you don't think is living up to their potential. Should they just be cut from the team if they are just becoming a hassle?

EDIT: Took all the thoughts into consideration and am going to try and talk it over with him. We are a bootstrap start-up so not much extra cash to sue for paying ourselves. First question I've asked this community and I'm definitely really happy with all the feedback and look forward to learning more.

Eric Wold

March 7th, 2015

Start what might be a difficult open non-confrontational discussion. Tell him you appreciate the contributions he has made so far. The true test if you have what it takes to be a CEO is finding out why his motivation level has changed, and fixing it if possible. Team building is a CEOs most important skill. And don't be afraid to ask "Do you think I have what it takes to lead this team?" and "Do you want to carry on, or would you prefer I find a replacement?" Once he opens up, then the real work can start.

Michael Brill Technology startup exec focused on AI-driven products

March 7th, 2015

Definitely agree with Eric. I'm in the fire-fast camp but certainly not before you know *why* his performance is lacking. High probability that you are a major contributor to his attitude.

You have been building a product for over a year now, there are now tons of competitors and he's probably not being paid. You set expectations that you were going to ship an MVP in 3 months but nothing yet. His roommate makes $200K working for Google and he's wasting his time building something that'll never ship.

Statistically, you likely part ways but to Eric's point, learn as much as you can about the situation first. Then come back and ask the question.

Robert Clegg

March 7th, 2015

Wow, maybe I'm reading these comments wrong, but it seems it's pretty easy to throw this guy under the nearest bus without really taking a look at yourself. What did you promise? Why hasn't the company achieved x, y, or z? Do you have investors? How is it your partner created chunks of quality work but there isn't significant business momentum?

I kinda doubt this guy would be putzing around if you had a stream of investment and partnering opportunities rolling through the door.

You may be "busy" doing the wrong things or getting no results. What's your stake in this before you go firing people and running off with the company?

Gopi Mattel Director, Local chapter at The Founder Institute

March 7th, 2015

Many times it is not just performance, but interpersonal issues. For example, one person may argue a lot and the other maybe conflict-averse. This can lead to the perception that there is non-performance.
It is best to set up tools and processes so that it can be much more objective before you act. Set up free task management tools for the company. Create all the tasks to be done, assign responsibility and rough dates. Then it is a lot simpler to have clear information on non-performance and then all are more likely to agree on next steps for non-performers.

Eric Wold

March 7th, 2015

Lol to "fire him!" before discovering the root cause. Yes, that is the likely outcome. But discuss it first and honestly determine if his lack of enthusiasm is due to his own issues and not somebody else's weak leadership.

I've fired lots of people. You don't instantly prove you are a CEO rockstar just because you are willing to fire people. Have a real chat. Fire him an hour later if doubts are not fully resolved.

Norman Hartmann Principal Expert Mobile Computing at Siemens

March 7th, 2015

As with everything in life… find out the reason (behind his behaviour). I was once working with an old friend who’s performance was also getting worse and worse, you could literally watch it degrading. In the end it turned out that we was suffering from diabetes and was simply not aware! Lesson learned for me: bad performance can be caused by virtually any reason - I think the best advice I can give you is: find the root cause!

Brian McConnell

March 7th, 2015

I would cut him and offer him a share of equity based on time served to date. If you had agreed to a 50/50 split, and are six months in, I would offer him one eighth of his share (assume standard four years vesting). Maybe offer him an advisory role, and an opportunity to earn additional equity based on performance, but you need to replace him with someone who will actually deliver. Don't screw him over, but the fact is he's lost enthusiasm for the project and is a net drain on the business at this point.

Tim MBA CEO, Healthcare Forward

March 7th, 2015

I lived this quandry with a previous startup. I made the mistake of giving my partner an equity position from the start, even though it was my concept and my sweat equity to get the company up and running. I offered him the equity because he had good credentials and seemed to eager to contribute and grow the business. Like the stories above, he didn't follow through and his involvement did not increase as the company grew- he basically sat on the equity.

My two biggest mistakes were:

1) giving him a significant amount of equity without a vesting schedule and/ or specific milestones

2) not buying him out sooner.

I'll echo the comment that in general, my biggest mistakes weren't making decisions that didn't work- it was sticking with those decision too long.

Here are two applicable and somewhat humorous quotes:

"When you sit down to a ham and eggs breakfast, the chicken was a contributor, the pig was committed"

(I was the pig, my partner was the chicken)

and from Willie Nelson:

"Why is divorce so expensive? Because it's worth it!" (it was worth the money to buy out a partner who was a drag on the company and a distracting aggravation)

Good luck to all!

Anthony Dobaj

March 7th, 2015

Great advice from the majority that "seeks first to understand". Joan emphasized the really important tactic of pausing and letting the individual absorb and respond. One caveat - these things can take a ton of effort and time, and the amount of time you commit should be commensurate to this person's value to the organization. At some point you may just have to cut your losses.

Rob G

March 8th, 2015

@ John L; we don't know this person's role - Evan hasn't clarified that, but we do know this person is a cofounder. Its entirely likely Evan isn't his "manager" and can't just "fire him" immediately or otherwise. What happens If (we assume for a moment) this person is a 50% equity holder (something i don't recommend, but it appears to be the case here) and 'the technical guy'? Maybe he owns 33% and is close with the other 33% equity holder. These guys would likely end up in a legal pissing match for the next several months+ if Evan just "fired him immediately". Presumably they have IP assignments in place to be sure the IP stays with the company, but we don't know that. They may have buy/sell agreements in place but we don't know that. I support the adage 'hire slow, fire fast', but the reality is startups really can't afford to hire slow nor fire fast. Even if Evan was his manager "fire him immediately" could again end up in a law suit this young company can't afford. while firing somebody immediately may scratch some "i'm in charge" itch its likely not Evan's smartest move. As a founder Evan's job is to find a way to get pas this, keep the wheels on and move the ball forward every day. I find hindsight is a fantastic tool and 100% accurate in identifying the people I should have fired sooner. I would say my biggest failing as a "manager" is hiring the wrong people...in hindsight.

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