CEO Matthew Bellows Shares Tips on Managing, Recruiting & Firing as You Scale
In an unabridged conversation with Shikhar Ghosh, serial entrepreneur Matthew Bellows discusses the challenges he faced while scaling his ventures. Bellows scaled his first startup, WGR (Wireless Gaming Review) Media, Inc.—a pioneering company that provides gaming previews, editorial reviews, and insights for mobile gamers—which CNET acquired. Under his guidance as CEO, Yesware—his second venture—became a leading email productivity platform. Looking for practical insights on how to build and manage your team, be a better leader, and evaluate your staff—and yourself—as you scale? After sharing why he decided to start his third venture, BodesWell—a financial planning company—at age fifty, he reviews tactics he’s used successfully when recruiting new staff and letting go of executives or a member of the founding team who no longer fits. A lightly edited transcript follows the video.
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Matthew Bellows interviewed by Shikhar Ghosh on issues related to the founder’s journey, October 8, 2019, at Klarman Studios, Harvard Business School.
Matthew Bellows Shares Tips on Managing, Recruiting & Firing as You Scale
SHIKHAR GHOSH: Hi, I’m Shikhar Ghosh, professor at Harvard Business School. I’ve got Matthew Bellows with me. Matthew is the founder and CEO of BodesWell, which is a new company that’s creating a set of applications that allows you to align your financial future with your stage in life and aspirations for what you want to do.
Before this, Matthew was the founder and is now the chairman of Yesware, which is a sales management software company. So you’ve been doing this for a long, long time, being a founder.
MATTHEW BELLOWS: That’s right.
SHIKHAR GHOSH: One of the things that really struck me about your story was you left Brown to go to Naropa University, did a couple of years being trained in Buddhist practices, and have really integrated that into your life. And when you created Yesware, you wanted to create a culture where people were at the center of it, that people and their development, they didn’t have to leave their true personality outside and be constrained. You wanted to develop them. And so you provided facilities and support and a range of things. Tell us what your experience was with that.
MATTHEW BELLOWS: Well, the basic idea is that there’s a tremendous amount of inefficiency in business today because people don’t feel like they can be themselves. They feel like they have to put on their work face when they go to the office, and then they take it off and you hear it in TGIF and hump day and all these things, living for the weekend. And so the theory is that basically by being able to be your 100% genuine self at work, you’ll have more strengths to draw upon in a challenging work environment.
SHIKHAR GHOSH: And what would the specific things that you did, both things that worked well and things that you felt like, oh, it could have done that differently?
MATTHEW BELLOWS: Well, I mean we put a lot of effort and investment into the personal development of everyone on the team. So we hired professional coaches for anyone who wanted to take coaching. We offered physical and spiritual training programs for people who wanted to study Tai Chi or yoga or sitting meditation, etc.
SHIKHAR GHOSH: They would do this at work?
MATTHEW BELLOWS: At work, yeah. We had a special room and we bring teachers in and they could go and take the classes as a break from… People work long hours in software and so they could take a break and go do Pilates or something. And those things generally went well. I was surprised actually at how few people took advantage of the coaching, maybe about a third of the company, even though it was fully paid for with very highly trained people. About two-thirds of the people were not interested in that, which is kind of a shock to me.
SHIKHAR GHOSH: And did you find that it actually made a difference in their performance that if you… I know you can’t run, if you had a group of people in the company who didn’t take advantage of either the self-development, all the coaching and then another group that did, did you see that there was any kind of difference or measurable impact?
MATTHEW BELLOWS: Yeah, I mean the biggest difference that I saw was that the people who were engaging in this kind of training were just a little more thoughtful and empathetic with customers and with each other. So less likely to fly off the handle, less likely to say a stupid thing that was going to hurt someone else’s feelings. And the people who were not engaging it in it were sort of normal working people, which is not a bad thing, but probably not performing up to their potential.
SHIKHAR GHOSH: And so if you had to do it again, you would definitely do this? It’s not that expensive to do in the overall scheme of things.
MATTHEW BELLOWS: In the scheme of things, especially in a software company where the vast majority of our costs go to salaries, a little incremental coaching is not going to break the bank. The thing I would do differently though is, again, based on the fact that many people didn’t take advantage of these opportunities, is try to make it more targeted to what the individual needs as opposed to a blanket program.
SHIKHAR GHOSH: So if you go back and look at that again, you had the things that individuals could do and then you also had a set of values, right? Autonomy and transparency, which were taken much further than most companies do. So you’d said transparency, I’m going to share all the information with everybody. And over time you’ve had to change that or modify it as the company’s grown.
MATTHEW BELLOWS: Yeah, that’s right.
SHIKHAR GHOSH: Can you tell us the experience of that?
MATTHEW BELLOWS: Yeah, well, I always felt working in other companies that I was… When I was excluded from meetings or didn’t know what was going on in meetings, I always felt like it was like they were missing out, frankly. Maybe they were, maybe they weren’t. But I always felt like I wanted to be in the room, and so not everyone can be in the room, but I wanted to make sure the information was shared so that people would not have to make up the things.
I often found that people’s guesses about what was happening in the closed-door sessions are worse than what’s actually happening, so I wanted to share what was actually happening. So we would, and we still do this at the end of every board meeting, have a company all-hands and we present the information and people can ask questions and things like that.
The big difference is now it’s more of a poll. So if I give you the presentation of what happened in the board meeting and you have follow-on questions, you have to come and ask, and then we’ll set up meetings and talk about the context.
SHIKHAR GHOSH: Because that allows you then to put some context to it and only people who have some particular interest in that would come in as opposed to making it gossip or concern or fear or-
MATTHEW BELLOWS: Yes. It’s important when you as a bigger company, Yesware is 100+ people now, to set the frame around the information that you’re presenting. Whereas when we were smaller, we could all just sit in a room and talk and share the stories and we all knew it was going on anyway.
SHIKHAR GHOSH: All right. So in your new company, as you think about it as you grow, which of those, how will you do it differently this time if you’re going to do it differently?
MATTHEW BELLOWS: Well, in the new company, compared to Yesware anyway, Yesware when I started it, I was much more concerned about the employee experience and relatively less concerned with the customer experience, with the theory being that focus on the employee, they’re happy, they’re doing a good job, they will take care of the customer. But actually at BodesWell now we’re much more customer-focused first, and then the success with the customer then provides the benefits to the employers, myself included.
SHIKHAR GHOSH: So, does that mean… A lot of companies are customer-focused.
MATTHEW BELLOWS: Yeah.
SHIKHAR GHOSH: So, you become like most other companies.
MATTHEW BELLOWS: Well, in some ways it’s true but I think it’s more like on a spectrum. We were too far over to the employee side and now we’re sort of trying to find the happy medium. Whereas most companies are way over on the customer side and not nearly enough on the employees’ side.
SHIKHAR GHOSH: Employees’ side. And when you look at the Glass Door reviews and other reviews of employees at Yesware, they’re off the scale in terms of people being happy to be there. That’s a huge business benefit, especially in this labor market for really high talent. How do you measure that against the cost and the potential complexity of running an organization with transparency, autonomy, lots of facilities for employees?
MATTHEW BELLOWS: I mean from a cost perspective it’s really not that expensive, especially compared to what some people spend on the quarterly sales kickoffs and things. Like, that is much cheaper than those kinds of things. From a complexity standpoint, it requires a certain management style and maturity that becomes a forcing function for who you hire. And having those kind of more specific criteria about hiring managers is actually helpful because you can quickly weed through the people that you aren’t going to be able to do that job as well.
SHIKHAR GHOSH: So, there’s a much stronger cultural fit issue.
MATTHEW BELLOWS: Our biggest way at Yesware of getting new employees to join the team is people who already worked there going through their network and thinking, who would be great to bring in from my network? So referrals are by far the biggest source of new employees for us.
SHIKHAR GHOSH: And this is somebody saying this is such a great place to work that-
MATTHEW BELLOWS: Exactly.
SHIKHAR GHOSH: …That I want to go back and find someone-
MATTHEW BELLOWS: I want to bring my friend from some other company here too.
SHIKHAR GHOSH: Right, and then this person is almost responsible for bringing them into the company, giving them…
MATTHEW BELLOWS: That’s right.
SHIKHAR GHOSH: They feel accountable for the person they brought, their success.
MATTHEW BELLOWS: That’s right. And we have the person who brought the person in, the referer, to stand up and introduce them to the company and we pay a referral fee, $5,000, but it doesn’t go to the person who brought it in. It goes to their nonprofit of choice.
So then the person who is the referer says, “And the referral fee that I got is going to this nonprofit and here’s why I wanted to go to this nonprofit.” And so it becomes a story about what they care about and about how they’re impacting the world as opposed to just, “I got a check.”
SHIKHAR GHOSH: That’s on the bringing people in. One of the issues with companies that grow is that you outgrow certain people, that people are great at the five-person stage or the twenty-person stage or the thirty person stage. And while they’ve done a tremendous job and they’ve dedicated everything to it, they’re just not the right person for the role. And so you must have had a number of those people along the way. How do you let somebody like that go?
MATTHEW BELLOWS: It is really one of the worst jobs that a manager or a CEO has, especially like the easy cases are when people just aren’t working out. That’s easy to know and it sort of ‘no harm, no foul.’ And they’re generally not happy there either. So the harder part is when you’ve worked together for two or three or four or five years and poured your heart and soul into this together and it’s not working out. And that is just, it’s sort of like an effort to try to figure out. Can we salvage this? Can we make it work? Can we get to the next level? In the same way, a trainer training an athlete would say, “Can you get to the next level or not?” And if the answer is at the end of that process, no then you got to pull off the Band-Aid as quickly as you can.
SHIKHAR GHOSH: And so when you’ve had to do that with people who have been with you, sort of from the beginning, have you learned anything about how to do it in a way that leaves you and leaves them feeling…
MATTHEW BELLOWS: I hope so. I hope so. I think the biggest thing is just that going in, default assumption at a startup should be that the executive is going to be there for two or three years, less than a year. You don’t learn enough to actually contribute. In your second year as an executive at a startup, you can really contribute. But if that’s not going great, you should find another place. And it’s sort of no harm, no foul.
MATTHEW BELLOWS: But let’s assume that this is only the last two or maybe three years. And if it turns out that you’re an exception to the rule and you should be there for four or five or six, then that’s fine. But I think I didn’t have a clear sense of how short that time actually is. And so there are probably people that stayed longer than they should have for themselves and their career and for the team.
SHIKHAR GHOSH: So, maybe we should adjust vesting periods so that it’s more or less equal to that.
MATTHEW BELLOWS: Yeah, I think that would be fine.
SHIKHAR GHOSH: So if the default assumption is three years, then you make the vesting for three years and then that marks the end of sort of a first phase.
MATTHEW BELLOWS: That’s right.
SHIKHAR GHOSH: And you can have a discussion then, saying, “are you right for the next three years?” But it sort of creates a marker of sorts.
MATTHEW BELLOWS: I think that’s a good point. Currently, the vesting schedule for most software companies is four year vesting with a one year cliff. And maybe that should be three years with a one year cliff.
SHIKHAR GHOSH: But the vesting schedule then becomes the trigger to have a conversation and say, do you want re-up? Do we want you to re-up?
MATTHEW BELLOWS: That’s right.
SHIKHAR GHOSH: Is this the right thing for you?
MATTHEW BELLOWS: That’s right.
SHIKHAR GHOSH: All of those kinds of things.
MATTHEW BELLOWS: Yeah, I’m going to steal that idea. That’s a good one.
SHIKHAR GHOSH: Right, and then, so when you go back in and do you say somebody reached this point where they’ve sort of plateaued in what they’re doing and the businesses continuing to move in some form, what’s the conversation and what’s the process you have?
MATTHEW BELLOWS: So the signal to me has been, has the person stopped learning? And at that point, if in my estimation the person has stopped learning and progressing and moving forward as a professional, then it’s time to have that conversation. And frankly, it’s a very difficult conversation usually because, well, half of the time it’s difficult because people are blindsided or they don’t want to go. And half the time the people are generally like, “Yes, I know. Why did it take you so long to tell me?” And actually those are easy. That’s the easy part.
The harder part is when they’re blindsided or don’t want to go. And then you need to explain in very specific detail with very specific examples why this is no longer fit and why you’ve done a great job.
SHIKHAR GHOSH: But is the data that clear?
MATTHEW BELLOWS: It’s not, no, it’s not that clear. And especially in the startup world, it’s very subjective.
SHIKHAR GHOSH: So when you go and say specifically, “We missed this delivery at this time,” there’s always ten reasons why that’s so.
MATTHEW BELLOWS: Yep. That’s right.
SHIKHAR GHOSH: And so if I’m resisting it, I’ll say but sales didn’t deliver this and someone else didn’t deliver that. You gave me something else to do and whatever. So, it becomes a judgment call at the end of it, right? It’s your judgment.
MATTHEW BELLOWS: It is absolutely a judgment call and it is absolutely the job of the CEO to make that judgment call and to be right or be wrong, frankly, and take the responsibility for that.
SHIKHAR GHOSH: So, what we’re talking about in terms of the key employees who are coming through must apply to CEO’s as well?
MATTHEW BELLOWS: It does. That’s a good point. Yes, it does,
SHIKHAR GHOSH: So the task of a CEO with a ten-person company’s quite different from that with a thirty-person or ninety-person company.
MATTHEW BELLOWS: Yeah.
SHIKHAR GHOSH: And so, if we apply the same sort of two or three-year rule, you had three terms almost-
MATTHEW BELLOWS: That’s right, yeah, that’s right.
SHIKHAR GHOSH: … In Yesware. How did you decide that you… Because what’s unusual about your situation was you made the choice to leave the company and appoint somebody else, a CEO, even though you’d been to the founder and the CEO of the company and the board was not pushing you out as often happens.
MATTHEW BELLOWS: Right.
SHIKHAR GHOSH: How did you come to that conclusion and make that choice?
MATTHEW BELLOWS: Well, it wasn’t easy in the sense that I wasn’t doing a terrible job. We were continuing to grow and we’d gone from zero to 15 or 16 million in revenue and raised money and had a good team and things like that. So it wasn’t, obviously, I was terrible at it, but I was thinking about the next step.
SHIKHAR GHOSH: You also had a pile of money in the bank.
MATTHEW BELLOWS: Right. We raised financing and we’re great customer lists and lots of good things. But I was trying to imagine what it was going to take to go from 15 million in revenue to 50, and I was trying to imagine if I was really up for that after nine years of getting it to 15, and after much contemplation and some discussion, I just didn’t think I was the perfect person to do it. I didn’t think I had the experience. The biggest company I’d ever run before this was about a tenth of the size. So, I had 10X’d—which felt good. But I didn’t think I had another 10X in me in this context.
SHIKHAR GHOSH: And so did you go through any kind of formal process of “these are the skills I need to have and this is the skills that a person coming in here needs to have?”
MATTHEW BELLOWS: I did. I did make a list of the different criteria that I thought I would need and tried to evaluate myself against that. I don’t remember them all in detail, but suffice it to say, I felt like I was a little bit, I’d pulled all the rabbits out of my hat, and it was time to let someone else take the lead.
SHIKHAR GHOSH: And what was that transition like?
MATTHEW BELLOWS: Well, yeah, luckily this guy Joel Stevenson, who’s now the CEO of Yesware, was in the company and had worked there for two years, was the COO at the time. And so people knew him and he knew the company and he could speak about the product vision in a really compelling way, in a way that I often felt like, oh, I wish I could say that. He exhibited a lot of what it takes to be CEO. He had never been CEO, but the board knew him and trusted him.
And so we went through about a year-long transition process of getting the board bought into it, and then getting him up to speed on the different aspects of being a CEO. And then last summer we made the transition, so about a year ago.
SHIKHAR GHOSH: Did it feel to you like… It’s like when I sold my house, it suddenly felt like these people are coming in here and they’re changing the curtains that I love and it was my house. Did it feel like he’s coming in here and painting, sort of drawing mustaches on your great [inaudible]
MATTHEW BELLOWS: Although the transition for me personally was difficult, like I’m a 100% behind Joel and what he’s doing and the team that he’s built around him, a lot of whom have stayed with Yesware through when I hired them. And so there is a continuity there. I mean, sure. Are there some changes that he’s made or his team has made that I disagree agree with? Yes, like I don’t think the logo should be gray. I think it should be green. There are things like that, but fundamentally I know that they’re all bought into doing what they think is the right thing to make the company more successful than it is now. And so I support that.
SHIKHAR GHOSH: So, you left Yesware and then pretty soon after that you decided to start your own company and yet another one, and you’re, what? Early fifties now?
MATTHEW BELLOWS: 51.
SHIKHAR GHOSH: 51, so very early fifties, but the normal sort of profile of someone who starting a tech company is someone who’s a lot younger. So if I said somebody just show me a picture of a tech entrepreneur, it would be someone in their early thirties. And you’d started companies early in your career as well. How different is it now that you’ve been around the block a few times on this, but also starting with all of the risks, all of the excruciating sort of ups and downs of it, to think about starting at this stage in life?
MATTHEW BELLOWS: Yeah, a bunch of my friends said you’re crazy, why are you doing this? And frankly, I feel like I finally figured out what I’m good at, and I want to do it while I still can. I feel life is fleeting and I want to take advantage of all this amazing stuff I’ve learned. Build software for people that benefit the world if such a thing is possible. So I’ve really inspired actually, and I wanted to sort of take more time off and I thought I would take more time off, but then I just got obsessed about a new idea and found a great partner to found it with. And now we have a team and now we’re building a product and now I’m talking to customers and they’re getting excited about it and it’s fun. It’s just fun.
SHIKHAR GHOSH: It’s kind of what you do.
MATTHEW BELLOWS: That’s what I do. Yeah, yeah.
SHIKHAR GHOSH: I’m going to change the topic a little bit. You started this journey, at least the last couple of steps of this journey, saying that you want to create, almost taking your Buddhist and meditation training and saying, “I want to create work environments that reflect bringing out the best in human beings.”
MATTHEW BELLOWS: Yeah.
SHIKHAR GHOSH: If you go back and just talk about what about your training, in particular, do you think applies to entrepreneurship that people could benefit from, which philosophical perspectives or teachings that you’ve seen that you think people could benefit from whether they agree or disagree or follow any particular line of religious thinking?
MATTHEW BELLOWS: Well, the two things that immediately come to mind are one, human beings are fundamentally at the core good, which is not to say there’s not evil in the world. There clearly is evil in the world or and there clearly is suffering in the world. But that fundamentally, we’re more compassionate and empathetic and caring for each other than we generally give ourselves credit for.
And then the second thing I would say is that the reason why we come together and companies is to build something that we can’t do on our own. And that teamwork and that coming together is an amazing vehicle for personal growth. People tend to think of like, oh, I do my personal growth on the side and then I go to work to pay the bills. But actually being in a company and working on somebody together in an intense way to try to create something out of nothing is a transformative experience. And that can actually make you a better person if you take advantage of the opportunity.
SHIKHAR GHOSH: So that’s a perspective, but it needs to be supported by the company, by the environment, by all of this. And if you were advising other entrepreneurs of just saying, you don’t know what the outcome is going to be financially in any of these companies that you start. But you do have control over the work environment where people come in. So what are the sorts of things that you would say do these things because they actually help individuals to be better and probably contribute to the business as well?
MATTHEW BELLOWS: Yeah, I mean the examples I have are kind of crude because I learned them through trial and error. But the first one is: just be open to the feedback. There’s so much about being a CEO, which is like being lonely and it’s lonely at the top and things like that, but you are getting feedback from the world if you pay attention to it. And so just try to be a little more sensitive to what people are telling you you’re doing.
SHIKHAR GHOSH: And open so that they will tell you what they think.
MATTHEW BELLOWS: Exactly. I always ask for feedback as a CEO, and people are always reticent to give the CEO feedback even if you say for whatever reason. So, you have to actually pay even more attention to what’s really going on. And so one thing I learned, which was very simple but easy to implement for all of the CEOs out there, don’t send emails at three in the morning.
I wake up sometimes at two or three in the morning and I’m thinking about the business, I have this idea or I have this insight or I have this question, and I fire off an email to the VP of sales or the head of product, whatever, and thinking like it’s getting it off my chest. They’ll get to it when they wake up in the morning and it’ll be fine. And it took me a good six months to a year for them to tell me like, no, that really pisses me off, because I feel like I need to be there to answer your email at three in the morning and I was trying to sleep and I just, I didn’t get that. You know what I mean?
And so things like that, being a little more considerate, being a little more patient, being a little bit more trusting of the team, go a long, long way. Because honestly, the bar for being a good CEO is really low. Most CEOs don’t have a good reputation for being good to work with for a good reason. And then you see like the Undercover Boss and shows like that where CEOs actually got to do the work and they’re freaking out. They’re like, “Oh this is really hard.” And you’re like, yeah, no, naturally.
So a little more sensitivity and empathy for the people that are on your team goes a long way towards building a better work environment.
SHIKHAR GHOSH: What about sort of the way you manage yourself as a CEO, given the stresses and the loneliness and the ups and downs of it?
MATTHEW BELLOWS: Yeah, I am a big fan of taking vacations, and it’s not just because I need a break and I want to spend time with my family, but also because it sets a tone in the company that you can take a vacation. And for creative work, which fundamentally software is creative work, you need to be able to step away and clear your mind and do something else and move your body and exercise or just travel or get out of the nine to five. So, I’m a big fan of vacations and making sure people take vacations. In fact at Yesware we turn off your email when you’re going on vacation, so you can’t get it.
SHIKHAR GHOSH: The other dimension on which people often struggle, particularly first stage CEOs, is that the work can be all-consuming, and then the balance between what you do with your family, what you do outside work and what you do at work gets really tilted towards work. How have you dealt with that and what’s your advice to people who are earlier in their careers?
MATTHEW BELLOWS: There’s no silver bullet there. There will be weeks when you work 80 or 100 hours or 120 hours a week. The most important thing to do there is before you go into it, make sure your family’s on board, so have a conversation with your spouse to say, “This is going to be a very intense period of my life. I know it’s going to take time away from you and other family members,” which won’t make it always easier, but at least we’ll set a good foundation for communicating.
And then the main thing is like make sure you stay in touch with that person. Like, “How’s this going for you? I know I just had a tough week. How are you doing with it?” And even just asking that question I think opens up the avenue of conversation.
SHIKHAR GHOSH: Right. I once had a set of entrepreneurs with their partners over, and we had interviewed their partners just as a thing saying what was this like? And out of four of them, three of them were really upset. And the thing that struck me was they said we got it, this is going to be difficult. But what really struck us was we would go everywhere when the company was successful and it was like we had no role in it.
MATTHEW BELLOWS: Oh, interesting, yeah.
SHIKHAR GHOSH: That the person who was successful was… And yet if it failed, we’d be the ones who’d have to put up with all of the crap for so long. And most people don’t recognize the emotional role that a partner plays through all of this.
MATTHEW BELLOWS: So at Yesware we have a summer party and the summer party is dedicated to the spouses and kids, the family members, that support the Yesware employees to be there and work that hard. And so we try to explicitly celebrate the efforts of the family to support the people who come to work at the company. Because it’s so true that they are the unsung heroes of the startup world.
SHIKHAR GHOSH: If you’re getting ready for a difficult conversation with somebody who you know is going to resist that or at least not be ready for it, how do you prepare yourself and what are the steps you take and what things you don’t do?
MATTHEW BELLOWS: Yeah, yeah. Okay. So in any employee-employer relationship that is not working out, there’s a period at which you’re both trying to make it work and then there’s a period at which you decide it’s not going to work. And at that point, the dynamics somewhat change, and you have to figure out how to communicate that insight to the employee in a way that they’re going to understand so that they can learn from this. And so that the rest of the team knows that there’s actually a thoughtful process to get to that point. Because the worst thing for the rest of the team is for them to feel like getting fired is random.
So how do you then prepare for that conversation? The first thing you have to do is you have to talk to the other people involved who work with that person. So, for example, in my current business, I talked… We had a product manager who I fired after three months, and I talked to my co-founder, CTO, and I talked to two other engineers who he had worked with beforehand just to make sure that I was seeing things clearly.
I had a view, what’s their view of this person’s ability to contribute to our company at this stage? It has nothing to do with them as a human being, it has nothing to do with how successful they could be in a different context. It’s just maybe not the right match. And by the way, they know it too, right? People are generally smart enough to realize when it’s not working out, and they’re struggling and no one wants to be in that situation. So what I did is make a list of the different specific things where I had asked this person to do this thing, and what had been the result and have very specific examples.
So for example, we said we wanted to have a closed beta test on this day and we didn’t have it until three weeks later, like very specific concrete examples. And somehow by being able to bring up three or four concrete examples like that, it helps the person ground a difficult emotional experience with reality and therefore understand the decision that it’s just not working out.
SHIKHAR GHOSH: So, I’d imagine that the person has a counterclaim to anything specific you bring up—it was late by three weeks.
MATTHEW BELLOWS: Yes, that’s right.
SHIKHAR GHOSH: But that’s because we didn’t get the servers in on time and something else happened, and you asked me to do this other thing.
MATTHEW BELLOWS: Yeah, that’s right. So, there always are excuses. At a startup, there are many fewer levels of tolerance for excuses. There’s just less slack. And so part of being a startup is just frankly having less tolerance for reasons why and more bias towards we have to figure it out. And also the person who, as you get up higher in the organization, less and less room for excuses and more and more results-driven approach. So the person who’s explaining to me why they shouldn’t be fired because of all X, Y, and Z. They’re not a good fit anyway.
SHIKHAR GHOSH: And after the person leaves, so you’ve had the conversation, they’ve said, “Okay, we’re going to leave.” Do you follow up? Do you keep in touch with them? What’s your process? Or is it kind of over at that point?
MATTHEW BELLOWS: So, what I say is I’m happy to help you with your job search and if there’s anyone I can introduce you to or if you want to run ideas by me, I’m happy to do that. If I can introduce you to a bigger company or a company that would be a better fit for you, please let me know. It’s on them to do it. But I definitely try to help people make that transition because I know how hard it is. But that doesn’t happen very often, honestly, most people just sort of are happy to part ways.
SHIKHAR GHOSH: And particularly if they’re technical, there are lots of positions.
MATTHEW BELLOWS: Yeah, there’s no shortage of jobs for software people in Boston.
SHIKHAR GHOSH: So, after the person has left, particularly if they were senior or they’d been with the company for a long time, they have allegiances, there are people who have allegiances to them, and you’ve got this delicate balance of explaining to everybody else what happened without their being present versus the need to tell them so that they don’t feel threatened. It doesn’t feel like a random thing. How do you manage that?
MATTHEW BELLOWS: Not to make it seem easy. It’s not easy, but it is something. I think the most important thing is to delegate time to it because the tendency that I’ve felt is, okay, the person’s gone. We figured it out. What’s next? But really what’s next is to go around one by one if need be or group by group and share at a sort of open level, authentic level, why you made this tough decision.
Firing someone who’s way underperforming and not coming to work is easy. Firing someone who’s poured their heart and soul into your startup is hard, and people are going to want to know that it was not done lightly and that the CEO is feeling the impact of this and nonetheless had to go forward. So if you put it in the context of this was a hard decision but we had to do it to get to the next level, then people start to understand.
SHIKHAR GHOSH: And so you almost go person to person and do that?
MATTHEW BELLOWS: Yeah. Person to person for senior leaders and certainly team to team for the teams that the person worked with.
SHIKHAR GHOSH: And I’d imagine you make yourself available if someone wants to talk about it.
MATTHEW BELLOWS: I always say that, but honestly people very rarely take me up on that.
SHIKHAR GHOSH: Right.
MATTHEW BELLOWS: It must be because I’m such a mean, nasty and unapproachable guy.
SHIKHAR GHOSH: No, but I think that’s generally true. You say you have an open office and except in the most extreme case or some frivolous case and it’s usually the same guys who come in.
MATTHEW BELLOWS: It’s true.
SHIKHAR GHOSH: And have a complaint about something, about the copier not working or something.
MATTHEW BELLOWS: Right, there’s that but you hope that people… I always hope that people would take me up on that more and some people do for sure. But for the most part, I have to be the one to go out to them and explain what was happening and explain why. And obviously one, you can’t denigrate the person who’s left, and you can’t make it seem like a negative thing. It really is a tough choice.
SHIKHAR GHOSH: And it’s mostly because the business has different needs now than it did. So if this person has done a great job for where you were, but you’re moving to a different phase and the person hasn’t been able to keep up, and so they’ll get a great job somewhere else doing what they’re already good at.
MATTHEW BELLOWS: Yeah, I think that’s right. And frankly, most of the time, most of the team already agrees. The worst thing about firing is that you wait too long. And most of the criticism, most of the feedback that I’ve gotten is like, “Yeah, duh, took you long enough.” You know what I mean? So the idea that we’re breaking the news to somebody is like these are the people that work with them 24/7, so they already know. And in some ways, it’s a relief. It’s oftentimes a relief.
SHIKHAR GHOSH: Okay. But still, that closing step of going back, talking about it, allows for some of the emotion to dissipate.
MATTHEW BELLOWS: If you don’t follow up and loop back to the people who are directly affected by the decision that you made, they assume that you don’t care or they assume that you made the wrong choice or they assume that you are frivolous in this. Because oftentimes they don’t see all the one on one, they don’t see all the months of preparation that went up to this decision.
SHIKHAR GHOSH: Right. Because in your discussions you didn’t include them in it.
MATTHEW BELLOWS: No, of course not, you sort of can’t say these things at a time because it poisons the well. You’re hoping the employee will rise to the occasion.
SHIKHAR GHOSH: Right. And sometimes I’ve seen the employee is hurt, regardless of how well you have done in the process, and they will say some things to the people that they know.
MATTHEW BELLOWS: Yes.
SHIKHAR GHOSH: And you have to provide some perspective, have them ask the question, “Did this happen?” Just allow for that safety valve to release some steam.
MATTHEW BELLOWS: By the way, super tactical thing about being fired, and getting fired and firing—just say, “It’s not working out. You’re fired.” Or, “I’m sorry to say this is your last day at the company.” Be very clear about it and direct about it. I remember the last time I got fired, my boss, the CEO said to me, “I was a VP of sales,” and he said to me, “Matthew, I got to tell you, we’re going to have to let you go.” And that just struck me as absolutely the wrong way to… Like, you have to let me go. You don’t have to do anything. You’re the CEO, you’re deciding to do this. And he was like, and I told him that, and he was like, “Yeah, you’re right, you’re fired.” And I was like, “Okay, good. Now we can move on.” You know what I mean?
SHIKHAR GHOSH: Yeah, right.
MATTHEW BELLOWS: So just be clear about it.
SHIKHAR GHOSH: All right. Thanks.
SHIKHAR GHOSH: Right.
