Warning Signs That Your Boss Is About to Be Kicked Out

Pushed out

Working at a startup can be a wild ride. Funding looks promising but then dries up, partnerships come and go, and colleagues suddenly depart when an established player swoops them up. But there’s another dynamic at play, too: The founder – the one who got you excited with their vision and sold you on the company’s promise – could suddenly disappear, as well.

Founders of tech startups are particularly prone to being pushed out of their companies. Take a look at Andrew Mason at Groupon and Rob Kalin at Etsy. It’s not uncommon for them to be replaced at the helm once an investor team kicks in their money and opts to bring in more seasoned management.

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Tech startups are more likely to be led by people skilled in the ways of technology or their specific product than they are management or finance experts. In addition, their leaders are often younger than typical entrepreneurs. Both were true for Groupon’s Mason and Etsy’s Kalin. Mason was blamed for the company’s financial woes and precipitous stock decline. Etsy’s Kalin, pushed out twice from the company’s top spot, was notorious for having a disdain for the world of finance and businesspeople.

What to Watch For

If a lot of change seems to be occurring at your company, you can look for hints that a change in management might be in the offing. The most obvious one, says Cynthia Kocialski, a San Francisco-based startup advisor and author of Startup from the Ground Up, is when you’ve got outside investors with a considerable stake in the company, especially when the numbers are less-than-thrilling. That’s when they’re likely to bring in a new management team.

Other times when a startup’s founder may be left behind: When there’s a push to reorganize or a big pivot in strategy or product, says Kocialski. “On average, the first product is generally not going to work. There might be a second version. The first is the talking point. Then it’s about going to customers and getting the customers to help tweak it.” There might even be a third go-round in product tweaking, or another major change in strategy. Warns Kocialski: “If you couldn’t define it in three passes, it’s likely the company won’t survive.”

If you like the idea of a startup so much that you’re thinking of striking out on your own, Kocialski offers this advice: Look at things from the investor’s point of view. “Technical people don’t often make good CEOs,” she says. “Being a CEO is more about building connections and speaking with people who will have confidence in your company. You can’t simply be an over-intellectual techie. You have to do meetings and give presentations that people will get excited about.” Often, she observes, that requires a sales, finance and marketing background.

Still, remember that you’re all on the same team. “You all want success for the company,” Kocialski points out. “When a company grows, there is a different management team that’s required for that life stage of the company.”

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