I had an opportunity to witness two distinct cultures in action in my personal life this past week. I am in the Tampa Bay area of Florida. Like most mid-market cities there are several startups and rising companies throughout. I have friends at two that have had events transpire as of late that had two completely different outcomes and I wanted to share my observations.

One company that is located here is backed by VC’s and has been growing rapidly. They have a great culture from how I understand it. Very laid back, treat you like a friend and encourage all team members to go beyond their own role to take on more responsibility.

My friends who work there always talk about the company with pride and enjoy working there. The CEO is a thought leader in the community and can cut to the core of what is needed to accomplish the job.

In my current role, I also use this company as a customer. They provide data on prospects from several databases. It is not unique as there are many in this space, but they provide an excellent customer experience and the data is usually accurate.

Last week we were told that we would no longer be able to access the application. I reached out to my friends and it was the worst news you could hear.

The company was not able to secure another round of funding and they had to close their doors.

This happened basically overnight. They were brought in on a Tuesday told the bad news and sent on their way.

My first reaction is that the folks who worked there would be bitter about the company and the way they were let go. That could not be further from the truth.

Are they out of jobs? Yes. Do they need to scramble to pay bills? Yes. However, they also felt like they were a part of something bigger than themselves.

President Theodore Roosevelt famously spoke about the man in the arena, “The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming….”

These folks were in the arena and were honored to have strived. They spoke positively of the company and its CEO, realized sometimes you lose and looked at the opportunity to learn as a valuable experience.

In my opinion life is about balance. In the same week as the above news broke I had some friends at another company I am familiar with share some news.

This company is no longer a startup; I would call them a rising company. No VC backing, the CEO started with his own money and they have been profitable through customer acquisition for some time. (I realize if you are in Silicon Valley you may find the concept foreign, but it does still happen.) This company started out with a great culture. Awesome offices, snacks and coffee, smart folks to work with. From the outside looking in it is very desirable.

This company has been on the decline with sales in recent years. It could be the industry it serves or that the products haven’t adapted to the needs of the marketplace.

Speculation from my friends has ranged as they truly believe in the company and its founder. He is a thought leader as well, spends a lot of time with Richard Branson and other luminaries, and is extraordinarily intelligent.

However, sales have been down and it has caused strain on the company.

They recently released the new comp plan for the sales team.

We could discuss how releasing a comp plan in month five and making it retroactive to January is a problem, but that’s not the point of this post.

The team was excited to hear what the new plan would be as some of the teams hit and surpassed their goals last year and figured they would be honored for that.

This could not be further from the truth. The new comp plan essentially cut their income by as much as 30%.

Now the average income for these folks was between $100,000-$150,000 annually. 30% is a huge cut and most may not be able to absorb that. Six figure deals that would bring in commissions of five figures dropped in some cases to the hundreds in commission earned on that deal. I’ll let that sink in for a moment. What’s the incentive to work!

The reaction from my friends there was as expected. They felt betrayed.

This company strives in being inclusive, expecting hard work from the team and tries to create a fun atmosphere.

These folks are invested, they love the company and the friends.

However, when you sign on and are told that you will make X amount and the company flips that on you halfway through the year it causes issues.

I cannot imagine how you would expect a great effort out of team members who feel betrayed and are now worried about paying bills.

Two different companies, two different outcomes.

How would you do it differently?

Flickr image credit: Anthony Albright

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Pronouncements by pundits are often pretty funny, but those that come from corporate heads (who should know better) are worse.

That is especially true when they are obviously suffering from head-in-the-sand syndrome.

Lest you think it’s a modern phenomenon here is one from 1876.

William Orton, President of Western Union, when deciding not to buy the patent for the telephone. “What use could this company make of an electrical toy?”

Steve Jobs said e-readers would fail, because people no longer read.

Steve Ballmer, whose foot spent a lot of time in his mouth, called Google a “house of cards.”

Just last year JPMorgan CEO Jamie Dimon sounded off about blockchain ledger products, such as Bitcoin

“This is my personal opinion, there will be no real, non-controlled currency in the world. There is no government that’s going to put up with it for long … there will be no currency that gets around government controls.”

Of course, tech execs aren’t the only ones to nosh on their toes.

There are a lot more, read them all on CB Insights blog.

Why?

Because they might help you keep your foot out of your mouth as your company grows.

Image credit: HikingArtist