Running a company is emotionally draining because life isn’t meant to be lived in the extremes. But that’s what running a company systematically is. In exchange for unlimited upside (the best extremes), you’re responsible for all the black swan events (the worst extremes).

To some extent, there are educational resources on black swan events (i.e. dealing with a key client churning, lawsuits, non-paying clients, etc.) but something that founders especially early founders are not prepared for are the emotional black swan events.

Personally, the worst one is ‘early’ employees leaving. I’ve tried to dissect why this hurts the most. I’ve broken it down to the following three.

  1. The lack of loyalty
  2. The stress of key processes tied to them
  3. The potential of a crappy culture (esp. if startup is successful)

The Lack of Loyalty This is something I’ve just had to come to understand. Early career employees are mispriced. Over time, with more datapoints these employees especially in booming industries will become overpriced. At that point, it’s your decision to either match them or they’ll leave.

It’s important to note, they are especially prone to underpricing growth rates & culture. As frustrating as it is to watch, you just have to let it go & hire less ‘junior’ hires.

If it’s any solace, you’ve probably arb-ed enough value.

Stress of Key Processes This is a risk-factor that you just need to de-risk. But this shouldn’t make you sad. This is fear/anxiety making you sad.

The potential of a crappy culture (esp. if startup is successful) When we first started Spotlight, we definitely went to a cultural transition. When we were all friends life was great. But when we were going from friends -> professional, it got hard. Our culture was definitely not the best, and as co-founders, I think we’re always responsible for why people leave.

But I think to be honest, you’ll always know if that’s truly the reason why people are leaving. In this case it wasn’t.