00:00welcome to the a 6nc podcast today's
00:02topic is managing uncertainty layoffs
00:05and talent management startups in many
00:07ways by definition are about managing
00:09disruption and uncertainty with things
00:11changing with technologies markets
00:13customers business and people so what
00:16happens when those business changes
00:17require changes in the workforce in this
00:19episode we focus on the topics of the
00:22frequency and magnitude and reasons for
00:24layoffs to communicating about them with
00:26employees joining us for the
00:28conversation or a 6nz partner Shannan
00:30Schultz who heads up our people
00:31practices team and that basically
00:33encompasses everything from HR to
00:34performance management to things like
00:36immigration and her team also manages
00:38her technical talent network Shannon
00:40also has a lot of experience as a former
00:41HR executive because she used to work at
00:43UPS where and then we also have Alex
00:46rampoo who's one of our newer general
00:47partners and most recently was the
00:49co-founder and CEO of trial pay where
00:51they went through quite a few changes as
00:52well so that's the introductions let's
00:54just get started one of the things
00:56that's commonly happening right now is
00:58reductions in the workforce or rifts
01:00layoffs and they happen for many many
01:03different reasons yet what reasons are
01:05those so I mean I think you know the
01:07workforce your employee workforce is
01:09like the most expensive expense that any
01:11technology company has it's all about
01:13the people so if a company gets to the
01:16point where they need to reduce their
01:17cost and reduce their burn the biggest
01:19thing you can do is is reduce the number
01:21of heads working for the company so
01:23that's one reason that's one reason you
01:24can also you know we've had companies
01:27and we've seen companies in the industry
01:29that have you know hired with the goal
01:31of building a feature or a product and
01:32then pivoted so they have this great
01:35engineering team or sales team and
01:38they're not actually going to build the
01:39product and then they're not gonna sell
01:41it so you need to actually you know
01:43reduce that team because they have
01:45expertise in one area but now they've
01:46you need to hire a different skill set
01:48you could have you know a product that
01:51is late and shipped in shipping so your
01:53business roles might not be in you know
01:55you might have hired aggressively and
01:57you're just not ready to utilize those
01:59skills yet sometimes I mean there are
02:04almost three different forms of people
02:06in the company there's kind of fat
02:08muscle and bone of the body and
02:10sometimes you do get to a stage as
02:13company where you might have people that
02:15aren't carrying their weight they're not
02:17actually doing what you would hope for
02:19them to do but performance reviews have
02:20not ever happened I wouldn't even call
02:22it a riff but we did a layoff of some
02:25people on our team that we just didn't
02:26think we're performing and we should
02:28have done that a long long time ago this
02:30is actually when the results were great
02:31but we never got around to actually
02:33enacting performance reviews and I would
02:35say from the HR standpoint I hope that
02:38companies don't do it that way
02:42especially especially when you actually
02:45do have a riff for not performance of
02:49the individuals but really performance
02:50of the company now that haven't been
02:52said when you're doing something like a
02:54riff for the performance of the company
02:56in many cases of course you do take into
02:58account the performance of the
02:59individuals like you're not if there's
03:00somebody that keeps the lights on and
03:02and if that person left the entire
03:04company would fall apart that's the last
03:06person to go down with the ship well
03:07that's technically defined what is a
03:09riff I know it stands for a reduction in
03:11there's many times types of you know
03:13changing the company's employee base but
03:15how do you define that specifically for
03:17people who aren't in HR and who haven't
03:19run a company yes I think you know a
03:20riff or a layoff or drop eliminations
03:24there's a whole bunch of different names
03:25they're all the same thing which is
03:26you're reducing your headcount it can be
03:28anywhere from you know I would say from
03:31five on a group if a group of five
03:34people are more I think a lot of times
03:35if you're doing less than that a lot of
03:37times you are just like maybe
03:38course-correcting your performance
03:40managing you're doing something not
03:42necessarily classified as a riff and you
03:44don't necessarily need to get in front
03:45of the company and say we're doing a
03:47reduction I think once you see a larger
03:50number people are going to take note and
03:53see that a lot of people are or more
03:55than a couple people were impacted on
03:57the same day and if you're not
03:59transparent about what went down people
04:01will start to assume something's going
04:04on with the company and it might not be
04:05the right messaging that you want people
04:07to think about so I mean should a as a
04:09CEO supposed to communicate every time
04:11people have to leave the company well we
04:13did because what we didn't want to have
04:15is I remember somebody in my company was
04:18from Argentina and he said he didn't
04:19want to be like that desaparecidos
04:21of like Argentina where did that mean
04:23basically people would disappear in the
04:25middle of the night this was during
04:26like the Civil War and then you'd never
04:28hear from them just like where do they
04:29go sometimes in companies and everyone
04:31looks around like confused like and you
04:33actually the store you start traveling
04:34like what there's still some of the big
04:36companies that are doing it we know of
04:37one that just last week did it that way
04:39well unfortunately one time we had
04:41somebody leave the company who had
04:43committed a serious felony literally to
04:45the point where the sheriff came to our
04:47office arrested the person took out all
04:50of his things like there's still a box
04:52in the sheriff's office somewhere that
04:54has like lots and lots of stuff like can
04:56we do a big announcement to the company
04:58and explain like the reasons for the
04:59arete like no that was that was the most
05:01awkward one hopefully that one never
05:02happened again but generally speaking we
05:05would always send out a note and we
05:07would craft that with the person that
05:10was was being like oh it's a little bit
05:11different when you're doing a group of
05:13I wouldn't counter your point on it's
05:15not a good idea to go take a batch of
05:17five people and eliminate them for
05:20performance reasons but also what we
05:22didn't want to have happen is that if we
05:23stager eventually as we got more mature
05:25as an organization we would have
05:27performance reviews at a regular cadence
05:28but if we said okay you know this week
05:31this person's work wasn't up to snuff
05:32and that was like week number 12 in a
05:34row and in the next week the same thing
05:36happened then it did look like this
05:38bizarre of staggered uncoordinated
05:39process and it was like doesn't this
05:42company know what they're doing like if
05:43there were five people that aren't
05:45carrying their weight like it's probably
05:46better and easier to kind of message
05:49that in one fell swoop as opposed to the
05:51you know deaths iPod I see those
05:53brightly into the night but sure Shannon
05:55why did you say that was a bad practice
05:57in the first place performance
05:58management driven riffs yeah well one I
06:01think it it shows from a cultural
06:03standpoint it says that you don't
06:04necessarily care enough about your
06:06employees to give them real-time
06:07feedback second it's more plays into all
06:10of a sudden people are being let go you
06:12don't openly communicate to a company
06:14and let people like naturally absorb the
06:16fact that we're going to do a reduction
06:17a reduction is done quickly it's done
06:19efficiently and it is like you're
06:21notified and walked out at the door so
06:23that means that the way that you're
06:24dealing with people who aren't
06:26performing is you're telling them the
06:28day of that you're not performing and
06:29we're letting you go which then causes
06:31panic in the organization people start
06:34to question can I be let go am i not
06:36performing to the expectations of my
06:39it's it's a cultural thing that you try
06:41and stay away from performance related
06:43riffs so just some background on trial
06:46pay you know we were doing great until
06:48we weren't and then eventually we turned
06:50it around and the company was successful
06:51but for us what happened was there were
06:55a bunch of companies if everybody
06:56remembers social gaming trial pay was
06:58one of the biggest companies that was
07:00handling all monetization for social
07:01games one of our biggest companies was a
07:03company one of our biggest clients was a
07:04company called play fish play fish gets
07:06bought by EA social gaming runs into
07:09problems eh shut down play fish multi
07:11multi-million dollar revenue stream for
07:13them and also for us gets shut down
07:14Zynga their own revenue goes down by 70%
07:17if you're selling a product and you can
07:21control your destiny and sell more stuff
07:23then great you could sell more stuff if
07:25you are selling something as somebody
07:27who's selling something to somebody
07:28who's selling something if you're like
07:29the second order derivative and like
07:31your clients of your clients start to
07:33suffer like there's nothing you can do
07:35you can just like hope and pray to the
07:37gods of like please let these people
07:39sell more things I can't make people
07:41play farmville and unfortunately they
07:43stop playing farmville so we went
07:45through some challenges where just our
07:46revenue which tripled in one year went
07:49down a little bit then went down a lot
07:51and it was very very hard to predict
07:53this and there was a big shift at the
07:55same time happening to mobile so we were
07:57confronted with this problem of we
07:59didn't have the cat we didn't have the
08:01revenue that we thought we were going to
08:02have that we knew that there was nothing
08:04we could do to affect that because we
08:06had this second order derivative problem
08:08of we were just two steps away from the
08:10end consumer you know we did have to do
08:12a number of rifts but the problem was I
08:15mean obviously it's kind of everybody
08:17knows you shouldn't do death by a
08:19million rifts you just don't know
08:21necessarily how like you don't
08:23necessarily know how bad it's going to
08:25go and the easiest thing to do is say
08:27you look at your organization and you
08:29say okay well we clearly don't need
08:30these 20 people or these 10 people right
08:35now based on the situation that you see
08:36right now and obviously it's going to
08:38get better because you wouldn't go start
08:39a company if you weren't an optimist
08:40if you were just a devout pessimist you
08:43would never start a company so it's
08:44gonna get better oh wait it hasn't
08:46gotten better and then you have to cut
08:47again and then you have to cut again and
08:49then across that entire time like the
08:50biggest challenge for me
08:52was actually not the riffs the biggest
08:54challenge was losing people that were
08:55very very good because the morale of the
08:58company went down so as just so much and
09:01the morale the company goes down when
09:03you do multiple riffs like it's it's a
09:05circular argument here so you know I get
09:08people asking what's the right way to do
09:10it and to counter not being the
09:12pessimist but not being as optimist as a
09:15founder CEO is you have to model for
09:19your worst-case scenario say numbers
09:21don't turn around tomorrow right how
09:24deep do you need to go if everything
09:26stays the way it is today or decreases
09:29slightly so that you don't have to get
09:31in front of your workforce and announce
09:33another riff you can't people you're
09:35good talent starts to leave when they
09:38see a riff another riff and another riff
09:41because they want stability and good
09:44tell another choice they do anywhere you
09:46want that's those are the folks that you
09:48don't want to lose and so as hard as it
09:50is you have to you can't just decide
09:52today and do it on Friday you have to do
09:54the financial modelling you have to
09:56think about doomsday and you have to
09:58find the happy middle on so you can cut
10:01at least to get so you're not doing it
10:03in another six months right so you
10:05describe it Chenin of the debt by the
10:06thousand cuts you don't want to do like
10:08a bunch of little riffs you would rather
10:09do like a bulk at once can you walk us
10:12through the process so what is this like
10:14what step one what step two what there's
10:16communication there's this modeling like
10:18how does this sort of play out step by
10:20step you know we actually do have a you
10:22know timeline in a playbook on this but
10:25it's you know one it's figuring out do
10:27you need to do a reduction does it make
10:29sense to reduction are there other
10:30things you can do what are some other
10:31things you can do you think you know
10:32like some of the freebie stuff that goes
10:35on in the office I mean are there how
10:36significant are your cuts like how
10:38significant of a cut do you need to make
10:40in your your cash flow or your burn so
10:42once you decide you are going to do a
10:43RIF there's internal communication you
10:47also have to think about okay if we're
10:48how many do we cut and what are the
10:51dollar amounts associated so it's
10:53actually a really complex process so
10:55there's internal communication there's
10:57standing in front of the company and
10:59talking to your employees there's
11:00talking to the employees who are
11:02impacted talking to the employees who
11:05there's focusing on morale then there's
11:07press there's like a whole bunch of
11:09different communication plans that need
11:10to be figured out then there's you know
11:12the legal aspect which there's tons of
11:15legal pieces in a reduction what are
11:17some of the high level just you know
11:18basic no no that you can never do in a
11:20RIF or that you should do in or if
11:21legally well one you want to make sure
11:23that there's no adverse impact so
11:26there's you need to do a lot of
11:27reporting around who's being impacted
11:29ethnic backgrounds age you want to get
11:33signed releases from folks you have to
11:34look at affordability for severance and
11:36then you have to look at on top of that
11:39like if you stay under 50 in California
11:43you don't need to have a certain amount
11:45of notice if you are reducing more than
11:4850 you have to give 60 days notice or
11:50paid out in severance so it's actually a
11:51really complex thing in terms of just
11:54how to do this and how to do this right
11:56what I learned was again like going back
11:58to this optimism versus pessimism thing
12:00if you're starting a company and you're
12:02going and hiring people and you're
12:04getting great engineers and salespeople
12:06and business development people away
12:07from places like Google we're almost in
12:09every case they're making more money the
12:12I mean you're getting them for two
12:13reasons one you're getting them for
12:15mission hopefully and then in which case
12:17everything becomes easier around morale
12:18and everything else but that's not
12:19always the case in many cases you're
12:21getting them because they see okay I'm
12:23giving up something here but I'm gonna
12:25own 1% of the company or I'm gonna own
12:27point 5% of the company and you know
12:29what if you one point five percent of
12:30Google that would be worth what you know
12:32billions of dollars so like two point
12:35five billion by my count so you're
12:37giving somebody a chance to like this is
12:40what Silicon Valley is really built on
12:41you're taking a loss right now to
12:43hopefully you know you roll the dice for
12:45something in the future now the problem
12:47is that when the company starts to foot
12:49fault and this isn't even the Rif thing
12:52this is more of like your sales could go
12:54down of course it gets worse if you have
12:56a mismanaged for if for a series of
12:58rifts but even with one roof I mean you
13:00have a foot fault and people thought you
13:01were going up into the right in
13:02perpetuity now they're like wait a
13:04minute like what is this equity actually
13:06worth and now I'm getting underpaid it's
13:09actually funny when I see a start-up and
13:10they come and they say okay here's my op
13:12X plan their optics plan is based on
13:15they're going to pay people series a or
13:16seed salaries in purple
13:18and what they don't realize is that
13:20people are gonna say after three or four
13:22years it's like okay I got this equity
13:24and that's great but you know what I
13:26need to go buy a house and that's a lot
13:27harder to do especially if you haven't
13:29gotten all the quiddity out well to that
13:30point really quick because we've moved
13:32on to a compensation topic which is you
13:34have to be very careful I'm sure you
13:36agree with this at seed stage in a round
13:38a lot of companies will give the option
13:40of do you want more options or more cash
13:42and they'll figure out the equation and
13:44give somebody more options and keep them
13:48at a reduced cash rate once you start
13:50approaching your B round or two to three
13:53everyone gets brought up to market so
13:56like you only get a discount for a
13:58certain amount of time before everyone
14:00comes to market because people cannot
14:02afford to live on a discounted cash
14:04income but in fact the point is I think
14:06interesting because it's a connection
14:08between what happens to the morale and
14:10and how that turns that into a salary
14:14conversation what's your view on tying
14:16those two is that a mistake - I actually
14:18think - Alex's point I think there's a
14:20third thing there's the mission
14:21there's the equity but I think the third
14:23piece and this is where I do a lot of
14:25coaching on the Rif topic people come to
14:28work for the founders they come like
14:30they truly believe if you can actually
14:33do a riff the right way and everyone
14:35that you want to keep feels like
14:37everyone who was reduced or impacted was
14:40treated with respect on the way out the
14:41you can keep your great employees
14:43because they came to work for you and if
14:46you're treating everyone with respect
14:47they'll stay with you and this was you
14:50know at ops where we went through I
14:51think three reductions you did yep and
14:54it was at the end when we sold to HP
14:56everyone that went over in that cell
14:59would still to this day probably walk
15:01off a cliff for been well that's great
15:03because as a CEO founder CEO people
15:07believe in your vision and they believe
15:09that you know what you're doing you read
15:11his book the struggle like he didn't
15:12always know what he you know what the
15:13right answer was but his employees
15:15always felt that he did the thing I say
15:16to our founders and CEOs is that every
15:19person who's joined this company joined
15:20you they they might be working for
15:23someone else but they believe in the
15:24company you said you were going to build
15:26so you know you guys are both reference
15:28communication and believing in the
15:30is the founder than the right person to
15:33get in front of the company and
15:34communicate is it or someone else it's
15:36the founder it's the CEO the most
15:39important thing is you have to you you
15:41want to control the communication that's
15:43going out to your entire workforce which
15:45means one person needs to stand up and
15:48communicate to everyone what's going on
15:50that day why it's taking place and that
15:54you as a CEO and Founder like it was one
15:57of the hardest things decisions you've
15:58made what's the right balance I mean are
16:00you supposed to be very matter-of-fact
16:03and sort of clinical are you supposed to
16:05be a little emotional I mean do you feel
16:07like do employees feel doubtful if they
16:09see the CEO kind of tearing up in the
16:11middle should the should they be a
16:13little you know very HR like it's not to
16:16be mean Chenin but honestly like harsh
16:18yeah very like okay and here's the
16:21paperwork and you're done you gotta sign
16:23and there's a legal reasons for that
16:24so what's the right balance here and I
16:27mean I know there's no right answer but
16:28what's the best practice you Shannon can
16:30probably answer the the HR aspects of
16:32that very very well I mean for me it was
16:34more of how do we still communicate I
16:37mean to your point like people are
16:38showing up to work for this mission for
16:40the founders for everything else that
16:41they really signed up for how do we show
16:44that there's still a plan to win because
16:45if you just kind of say like hey we had
16:47to do this because we have to cut costs
16:49and yep that's what we got to do sorry
16:51time to go back to work like you're not
16:53going to have a very motivated workforce
16:54at that point in time and I'd say that
16:56in most cases people understood I mean
16:58even the people being let go I remember
17:01the first time we did one of these I
17:02mean I I literally didn't sleep the
17:04and because there were some people like
17:06there was somebody who would work for me
17:08for a very very long time he was
17:09terrific but she didn't really have that
17:11much to do anymore just given what what
17:13the company was going through and that
17:14was a really really tough one but she
17:17was she just said you know I totally
17:18understand I mean like I know where
17:20things are and like you've been great to
17:21me and you know thank you Beth made it
17:23worse for you in some ways no it made it
17:25better because I just felt like I was an
17:28evil person and you know here's somebody
17:30that's been tremendously loyal to me
17:31like one of the things that we did do is
17:32the amount I mean I don't know if maybe
17:34Shannon can tell me this is a terrible
17:35idea which I had had her advice no but
17:37but we we gave more severance for the
17:39more time that they had been with the
17:40company so for somebody that had been
17:42there for seven years we gave them even
17:44severence as opposed to somebody that
17:46had been there for one year or two years
17:47I mean I think we were so generous with
17:49everybody the thing that a lot of people
17:51don't understand about generosity with
17:53severance or like they look at what
17:54Netflix does or it's like hey we're
17:56gonna pay your manager to fire you or
17:58something like that and if you have four
18:01months of cash left as a company and
18:03like you just can't do this you get
18:07excoriated by the press by your
18:09employees sometimes it's like oh my god
18:11I can't believe you gave person X only
18:13two months of severance in most of
18:14America you don't get two months of
18:16severance so first of all this actually
18:17is very generous it isn't generous but
18:19like we're gonna pay you for two years
18:20to leave kind of Netflix style they're a
18:22publicly traded company worth tens of
18:24billions of dollars and that's the other
18:26thing that I found very very challenging
18:28which is like you know the the
18:30generosity that I think we were showing
18:32people was really really hurting the
18:34finances of the company and you know how
18:37do you deal with that where it's like
18:39okay we want to be generous we want to
18:41like reward people like it also like you
18:44do want people to just like more as a
18:46practical matter like you have a release
18:47and they get the severance if they
18:49signed the release you can imagine a
18:51private unicorn type company does a
18:53layoff and it's like all of these people
18:56and gave three months of severance but
18:57what if they only have you know a year
18:58of cash left anything else who'd be just
19:00and there's no company doing three
19:01months severance these days standard
19:03like I'm this question it depends it is
19:06this goes back to it takes a lot of
19:08planning to do a reduction and
19:10affordability is so important because if
19:13you do a reduction and you're super
19:15generous because you want people to feel
19:16respected and loved on the way out the
19:18door you're giving yourself less runway
19:20to actually make it as a company and so
19:23as hard as it is like we can see
19:25companies doing anywhere from two weeks
19:27to you know I would say typical is a
19:29month I mean because there most
19:32companies aren't doing a reduction
19:33because they wake up one morning and say
19:34you know what we just have too many
19:36people it's usually driven by cash and
19:38so it's it's you can't be super generous
19:42are there other things you can do to
19:43make it better besides just offering
19:45kind words and helping walk out them out
19:47with carrying boxes like can you offer
19:48them contacts I have so I have the HR
19:50side and then I have the talent side so
19:52any company who's doing a reduction part
19:54of their fa Q's is that it's a
19:57an email alias to set up that goes
19:58directly to my team anyone who reaches
20:01out to my team we get on the phone with
20:02them we help them at the resumes we help
20:04them get introductions to companies it's
20:06about giving back like you join one of
20:07our portfolio companies you gave
20:09everything you could and we want to help
20:12you and it's that's a huge thing for our
20:14CEOs to be able to say there's the day
20:17of and then this the day after and as
20:19soon as the CEO stands up and start
20:21saying you were doing a reduction the
20:23coach and I gives us that everyone in
20:25that room is gonna hear about two or
20:26three more things so you asked should
20:28you show emotions like how you have to
20:30be real with your employees like
20:31obviously it is a hard thing that you're
20:33doing it's a hard decision communicate
20:36two or three things about what's gonna
20:38go on during the day and by two or three
20:40things you mean just because they're not
20:41gonna hear I can't like nobody comes
20:43into work expecting to hear from their
20:45founder CEO that the reductions going on
20:47right and so but then you want to bring
20:50everyone back together as quickly as
20:52possible to go through the go forward
20:54plan you know you still have to have a
20:56plan to get people to believe what
20:57you're doing so kind of walk us through
20:59the mechanics of this I mean just start
21:00right for the beginning for you and so
21:01you begin with the modeling and the
21:03people in the room for that modeling are
21:05the CEO the CFO the HR person anybody
21:09else it depends I mean it I always say
21:12you want to keep the circle of no as
21:14tight as you can for as long as you can
21:16but obviously a lot of times you need
21:18leaders of other groups to weigh in on
21:21who's what teams are we keeping and what
21:23teams do we need to let go right so you
21:25bring them in okay so that's a step one
21:26then you have the communication and you
21:29said there's about to a minimum of two
21:31weeks required between those typically
21:32hopefully and then you have the
21:34communication plan and and what actually
21:37again just what are the mechanics of it
21:39like you call people into the HR person
21:41calls me now says the manager the way
21:43that we like the playbook that I run
21:45with is first thing in the morning which
21:48is typically you know Silicon Valley
21:50style 9 or 10 o'clock in the morning you
21:52have an all-hands meeting and as a CEO
21:55you stand in front of the company and
21:56announce like today we are doing a
21:57reduction in force and we'll those
21:59people who are getting reduced have
22:00already heard that nope and everyone and
22:02here's why if it's you know the markets
22:05changed or we need to reduce costs or we
22:10something like giving a couple of
22:11reasons why we're going through it but
22:13very simple mm-hm and then kind of
22:17walking through here's what your we're
22:19all going to experience today
22:20so either everyone's going to be met
22:21with or those impacted are going to have
22:24a meeting with their managers so you're
22:25actually giving the people a heads up
22:27I didn't know that that was the other
22:28way around early so a lot of times what
22:30will happen is people will come to me
22:31and say not comfortable standing in
22:33front of the company and saying that and
22:35I'll say okay but just realize as soon
22:37as you have that first conversation with
22:39someone that they're being laid off it
22:41will spread like wildfire everyone will
22:44like start guessing and you don't get to
22:47control the message the very high level
22:49like we're doing this today and this is
22:51why then you just miss everyone you let
22:54everyone go back you no one's gonna do
22:56anything during the day you have the
22:58conversations you have managers sit down
23:00and talk to employees and tell them that
23:02they're being impacted does our person
23:04have to be staffing Nangal anything like
23:06that if you think there's something that
23:07can go sideways you can pull HR into it
23:09but your managers should be able to
23:11handle it okay and then from there I
23:13typically recommend bringing the company
23:15back together for like ten minutes at
23:17the end of the day notifications and
23:19saying you know it's been a hard day we
23:22appreciate everything that everyone has
23:24done here you know we're sad to see
23:26people leave and it's typically around
23:28noon and let people go you can either
23:31try and bring your workforce who is
23:33remaining back for at three o'clock four
23:35o'clock or you know in the late
23:37afternoon just to do a quick hey this is
23:39what we're gonna do the rest of the week
23:41or have the next morning and this is
23:44where you have to have tight
23:45communication your your PowerPoint your
23:48everything's ready to go on here's how
23:50we move forward as a company and this
23:51goes to Alex's point about sharing with
23:53the remaining employees in order to
23:54maintain morale that there is a plan to
23:56still win and and that our plan is so
23:58solid we can share it with you today
24:00because the Rif actually helped us get
24:03to this plan so if we didn't have a plan
24:05we couldn't have done the Rif right so
24:07here's our go forward plan yeah we did
24:10it a little bit differently but I
24:11haven't had as much experience I will
24:13say that you have different currencies
24:14as a company and obviously your most
24:16valuable currency is kind of the mission
24:19and that is what it is like you can't I
24:21mean if you change the mission that's
24:22often very very challenging it's
24:24mission and it's the personalities of
24:25kind of everybody involved there's
24:28compensation which is equity in cash the
24:31value of the US dollar isn't going to
24:32change but your equity can change a lot
24:33the last is just responsibility and what
24:37we did at the end we did a couple things
24:39and this is probably very
24:41non-traditional but you know thing
24:43number one is actually we split the
24:44company in two we had a different
24:46project within the company that we just
24:47thought was very very high beta and
24:49there was a lot of controversy around
24:51this I think most people thought that we
24:52were idiots for doing this imagine that
24:54your financials are not doing well
24:56what's the first thing that goes in the
24:58it's the thing that could work in the
25:00future but it's not anything about
25:02near-term revenue and yet these are the
25:04things that you need to invest in for
25:05the future so which way we spun this out
25:07into a new effective series a back
25:09company and we had 25 people that wanted
25:12to like they missed the experience of
25:14working at an early stage startup they
25:16went off with the little ship I mean it
25:18wasn't a riff it was like this was a
25:20funded company and again you can't
25:22always do this but this was a fully
25:23formed product the main company trial
25:26pay was a lot more profitable at this
25:27point in time because we had all these
25:29expenses taken off our books he didn't
25:31get selected for that small boat then
25:32you were left in like the the dying
25:34Colossus so what we did was we actually
25:37gave people a lot more responsibility I
25:39mean that that was a hero
25:41you're more vested in the future you
25:43feel like you have control and ownership
25:44yeah and we try to give them more equity
25:46as well but the problem is that like if
25:47you say okay well this company's gonna
25:49be worth e n state of zero and it wasn't
25:51but like if you say that or people
25:54believe that and you say hey guess what
25:55we're giving you a lot more equity it's
25:56very hard to make that valuable for
25:58people but like this was something that
25:59we did where we had the group of people
26:01that really wanted the small stage
26:02experience again and they were probably
26:04gonna leave us for that reason and we
26:06had a really cool product that they were
26:07very very excited about trial payment I
26:09think the the only currency that we
26:11really had left because we couldn't pay
26:13people to stay for the very reasons that
26:15we talked about with just optics and
26:16whatnot but we could give people a lot
26:18more responsibility and I think that
26:20really worked I think the end thing just
26:22to like doing stuff like that and if
26:25you've read Ben's book or if you've read
26:27some of Ben's blogs or if you've heard
26:30our compensation thing I was laid off in
26:32the second layoff oh yeah you guys
26:35like the if you do it right the loyalty
26:37doesn't go away and you can continue
26:39like keeping you know people that are
26:42important and you know we I was the
26:44second second layoff we did I was
26:46reduced and hired back within a year but
26:49it was it made sense to your point about
26:51the person that was really they kept you
26:53up all night so one last question then
26:55how do you ensure that you get back the
26:57employees that you want back when you
26:59can get to a state where you can bring
27:00that person back for whatever reason and
27:02how do you handle the one the
27:04disgruntled employee that is always like
27:07saying crap about the company after they
27:08leave I mean I know there's stuff like
27:10non-disparagement I think the more focus
27:13and the more you pay attention to the
27:16the angry employee the more what they
27:18have the same matters people leave
27:19people get angry changing jobs is what
27:22one top three of the most stressful
27:24things that you go through in your life
27:25what are the other when marriage and
27:27debris there's three things s is one of
27:32them but it's it's one of those things
27:35that so it's super super stressful and
27:38then when it's not controlled by you I
27:40mean you're there's people who are gonna
27:41have anger and you know my
27:43recommendation is usually to let it just
27:45let the person simmer out unless there's
27:47like legal things you can do if they
27:49push it to they push the envelope but
27:51the more attention you give it a lot of
27:52times the more fuel you put on the fire
27:54yeah I would agree I mean it's funny I
27:56won't say who but now that you know
27:58trial they got acquired by these uh I'll
28:00look at somebody's LinkedIn profile and
28:02they'll say like they were and this this
28:03might have been a disgruntled person
28:04they'll say try Allah and they changed
28:07it to now like saying acquired by visa
28:08so I mean the best medicine is really
28:10just to like really how do you make this
28:12company successful again because these
28:14feelings are often very transient I mean
28:16yes if it gets to the point where you
28:18need a restraining order like that's a
28:19different problem okay but if it's the
28:21normal course of action which is I my
28:23view is that it's it's understandable
28:24like I view this as a colossal failure
28:26by me and if somebody was mad at me it's
28:30they shouldn't be mad at me and I don't
28:32hold that against them now if you're
28:33still mad at me like five years later
28:35like that that's a little odd you might
28:36need to get some therapy but you know I
28:38I take it as a good sign that many years
28:40later like I see all these LinkedIn
28:41profiles get updated where it's like
28:43they're they they have some pride around
28:45I think it's this is a part of you know
28:48I have this conversation there's a whole
28:50bunch of different compensation things
28:51going on right now there's a whole bunch
28:52of different you know things going on on
28:54how people manage their their employee
28:57base and I always say to folks it's not
29:00always going to be smooth sailing like
29:02you will come across your hiccups and
29:04the way in which you you handle yourself
29:06as a founder and a leader and what you
29:09expect of your leadership team how you
29:11do that determines how you will actually
29:14end as a company I think that applies to
29:16life too because it's like how a person
29:18behaves in this karma where's a karma
29:20but it's also how a person behaves in
29:21their worst moments mm-hm
29:23reveal so much about their character and
29:25it is this is gonna sound cheesy I get
29:26to sound cheesy my heart breaks every
29:29time I have to help a CEO founder reduce
29:32their company because it is it's not
29:36something they ever dreamed they were
29:37going to have to do and they hired
29:39people and they know people came to work
29:42for them and they trusted them being a
29:44founder and being a CEO is a tough job
29:46it is definitely hard well thank you
29:48Shannon and Alex for sharing your
29:50experience and that's another episode of
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