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

Last week KG shared a quote from Marc Andreessen.

“First and foremost, a start-up puts you on an emotional rollercoaster unlike anything you have ever experienced. You flip rapidly from day-to-day – one where you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. 

Over and over and over. 

And I’m talking about what happens to stable entrepreneurs. There is so much uncertainty and so much risk around practically everything you are doing. The level of stress that you’re under generally will magnify things to incredible highs and unbelievable lows at whiplash speed and huge magnitude. 

Sound like fun?”

It’s likely Marc wrote this with founders in mind, but it applies to all employees, as well as those whose lives are connected in whatever way — spouses, kids, relatives, friends, etc.

Actually, it is worse for them, because they rarely have a full picture of what’s going on.

Sometimes that’s good; workers need to concentrate on their work.

But they also need to know when difficulties arise; they need to know if their job may be going south.

They need honesty and transparency from the person they’ve chosen to follow and whose vision they are working to make real.

It’s part of the social contract Matt wrote about a few years ago.

It’s Zach Ware’s focus about what to do when a startup needs to close.

It’s what the founders of Shift and WrkRiot chose not to do — to the total detriment of the people who trusted them.

It’s my recommendation regarding bad news.

It’s on you because it’s your rollercoaster, your responsibility to do the safety checks and your job to notify people before it jumps the track.

Image credit: HikingArtist

Move Loot’s co-founders

Last month Zach Ware, managing partner of VTF Capital and founder of Shift, talked about the right and wrong way to close a company.

“There is absolutely no reason for a company to shut down overnight. That’s a result of a selfish set of decisions a founder made.”

Obviously, the founders of Move Loot weren’t listening.

They not only shafted their people,

The mood at the all-hands meeting was tense, and employees asked management to give them the heads up if things were going badly. They were told that the cuts were the move they needed, the person said of the meeting. “Three weeks later is when the hammer dropped on everyone else,” they said.

They shafted their customers

Customers have accused Move Loot on Twitter of taking their money and failing to deliver items. Other sellers remain frustrated that the marketplace closed with no warning, leaving them in a lurch when trying to move out. The phone number that it had given out on Twitter for customer support now has a voicemail saying that phone support is no longer available.

As for their investors, I have no sympathy for them. Who gives four kids, with little-to-none business, let alone operational, experience combined, $22 million dollars with no built in accountability?

Founders owe it to all their stakeholders to be responsible.

If you recall, the three most successful startups in the world, Apple, Google and Facebook, all brought in seasoned management talent in order to give the founders time to gather experience and learn.

Contrary to Silicon Valley’s attitude, running a company takes skill; it isn’t learned from a book, but from experience, as opposed to throwing it at the wall to see what sticks.

Or in Valley lingo, ‘move fast and break things’.

But, as some ex employees point out,

 “At some point you realize how expensive it is if you break things every day. There has to be a little discipline.”

Of course, that would involve not only taking responsibility, but acting responsibly, too.

I heard a great line on a Bones rerun.

There’s a major difference between an entrepreneur and a con artist: an entrepreneur believes in the dreams he’s selling.

But then, so do pathological liars.

Image credit: Move Loot (via USA Today)

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

In 2011 serial entrepreneur Matt Weeks described what he calls the “startup social contract”. In it he talks about the tradeoff of salary for equity and that the basic premise is that the employees have the company’s back, the company has theirs and what happens if it is violated.

If the workers and/or the exec team come to disrespect, disbelieve or ignore this social contract, the company is lost.

Zach Ware, managing partner of VTF Capital, adds another dimension to what it means to have your people’s back and it’s crucial information as funding tightens.

“There is absolutely no reason for a company to shut down overnight. That’s a result of a selfish set of decisions a founder made.”

Ware spells it out by comparing what he did in his own startup, Shift vs. what Maren Kate Donovan, when she shut down Zirtual and laid off 400 people by email.

To start with,  Donavon claimed her CFO gave her incorrect numbers (he denies it) and that she was pitching to the last minute.

“The reason we couldn’t give more notice was that up until the 11th hour, I did everything I could to raise more money and right the ship.”

In actuality she bet 400 other people’s lives on a roll of the funding dice and then took the coward’s way out using email.

Ware finds her reasoning specious.

“Every founder should have a real-time understanding of their business. It doesn’t matter who does it. You have to know it. You have to know your horizons,”

Choosing to not only be a founder, but also CEO, means that, when all is said and done, the buck stops with you. Period.

No reasons, no excuses.

Image credit: HikingArtist