Would I be bad to leave a failing startup? [closed]

Question

I'm a team lead for a small startup for the past 18 months. I started as a mid-level developer but was offered a promotion, taking on the role as it was an opportunity for me to upskill and learn new technologies, and help have a greater influence in bringing a cool product to market. I also enjoy the mentoring aspect of the role. Unfortunately, we haven't managed to attract anywhere near the amount of customers that was forecast last year and we're running out of cash fast.

While I know this is a common situation for startups to find themselves in, I don't believe the company will be able to survive, as we're operating in quite a niche market to begin with, and a lot of leads have been exhausted already. In conjunction with this, the founder's behaviour is becoming more and more autocratic, and they are making increasingly rash and impulsive business decisions which don't make any sense to the staff, with morale rapidly draining out of the organisation as a result. While the founder has always been somewhat impulsive , I used to admire their "shoot-from-the-hip" attitude and charisma, but I've now learned that it can be a fatal liability in a small tech company.

I applied for a new position elsewhere, and am commencing the first interview tomorrow, but part of me is fearful of how the founder will react when I do find something else, as they're quite hot-headed when things don't go their way, while another part of me worries that it'll have a domino effect , because I know practically everyone is unhappy at how the business is being run.

I feel guilty too as I worry that I'll be leaving them high and dry - it's not that I think I'm this amazing developer, it's just the fact the team is so tiny means that each developer is gatekeeper to several important features, and it'll be an unwanted distraction for the company to deal with when replacing me, if they decide to do so. The cash situation means that they may not, however.

Am I doing the right thing here? Thanks

Answer 1

Been there, done that.

I don't believe the company will be able to survive

This is an important consideration. What rational reason is there to work for a company if you cannot convince yourself that it will succeed? If you don't believe the business can succeed, the thing to consider is this:

Would you rather start looking for a different job now, or wait until you have no other choice?

At some startups, the founders will be quite transparent about the operational status of the business, giving you visibility into things like how much cash is on hand, what the burn rate is, how long the company can keep operating without additional revenue, and how likely it is that they will find that additional revenue in the near future. However, I'm not really hearing that you've been given that sort of visibility.

I've been with startups where the founders themselves advised everyone to start applying for other jobs because there was only a couple months of cash left and few prospects for finding more. And I've been with startups where the founders kept everyone in the dark about the actual state of the business, to the point of telling employees that the company had "plenty of cash" right up until the day they shut down the business.

I don't know your exact position, but it sounds like you may be more in the latter situation than you are in the former. So if nothing else, be wary.

In conjunction with this, the founder's behaviour is becoming more and more autocratic, and they are making increasingly rash and impulsive business decisions which don't make any sense to the staff, with morale rapidly draining out of the organisation as a result.

Those are valid concerns with any business. So it brings up another question:

What would you do if the company was not a startup but everything else was still the same?

If you'd not stay with a larger company that had these issues, there's no reason to stay with a smaller one.

It's normal to feel a degree of responsibility for a startup's outcome. But when the founder of a startup acts as you describe, makes bad business decisions, and ignores the advice of other stakeholders, whatever happens is entirely on them. There's likely nothing you can do to change the outcome, no matter how much you may want to.

another part of me worries that it'll have a domino effect , because I know practically everyone is unhappy at how the business is being run

If that happens, it's not your fault. If "practically everyone" is already unhappy with the direction of the business, that can't possibly be related to you leaving in the future. Your concern is commendable, but somewhat misplaced.

You can only be responsible for your own actions. If other people decide to leave, that's entirely up to them. And if you decide to stay, you may well find that your "domino effect" happens anyways. If morale is as low as you say, it likely will.

You may also want to consider the possibility that with morale as low as it is, many of your colleagues might actually be happier with a different employer anyways.

the team is so tiny means that each developer is gatekeeper to several important features, and it'll be an unwanted distraction for the company to deal with when replacing me, if they decide to do so. The cash situation means that they may not, however.

That's just how business goes. And even a startup can and should take measures to mitigate the impact of losing a key staff member. If yours has not, that's another thing that isn't your fault.

What you can do, however, is take measures to mitigate the impact of your departure. For instance by ensuring that you thoroughly document everything that you're the gatekeeper of (on a wiki, for instance) and working to spread the knowledge around to other team members. This is something that should be done regardless, as a matter of sound business policy.

Am I doing the right thing here?

It's impossible to say. There's not really any clear "right" or "wrong" here.

You're unhappy with your job and concerned about the company's future prospects. That's as valid a reason to seek other opportunities as any.

And you're at a startup, and concerned over the potential impact your departure will have. That's a normal reaction to this kind of situation.

So there's two competing influences, neither of which is unreasonable. At the end of the day, you just have to make your own decisions based upon your own thoughts, feelings, and sense of ethics. It's not wrong to leave or right to stay, or vice versa. Each approach has its own pros and cons, risks and rewards. You need to weigh those up, and choose what is right for you.

I'd suggest that you not place too much weight upon the indirect impact your decision may have upon the future of the startup or your colleagues, but I certainly can't say it would be wrong of you to do so.

Answer 2

I agree with the comments stating that this is indeed off topic, as an answer which answers every point of your question would solely be of use to you. As such, my answer will answer the more general question of 'is it fair to leave a small company that needs me'.

The answer to whether its fair to leave any form of company really falls on a continuum between how loyal that company is likely to be to you, and how your career with that company will impact your other goals. If you believe that the company would sacrifice its own goals (profitability, market penetration etc) to accommodate your goals (learning new skills, making more money, having more holiday etc), then it's probably ethical to show a similar level of loyalty to the company. However -- especially in small companies, with tight-knit teams -- the company's loyalty to the individual often subjectively seems higher to employees than it actually is, and companies are very rarely willing to sacrifice any of their core goals for an employee.

If you believe that your career with the company is going to negatively impact something you care about, then it may make more sense to start looking for other jobs, and then raise this issue with your company's figurehead. If you and the representative of the company can come to some understanding that alleviates your worries then that's fantastic, but if not then at least you'll have begun the job search early and will be able to leave the company with some prospects.

Either way, if you feel guilty about your decision because you feel that you'll be letting down the other members of your team, or the company itself, then you have to ask yourself how highly you value people or organisations who would rather see you miserable and with the company, than happy but elsewhere.

Answer 3

I will take the liberty of reframing your moral question (am I bad?) as a utilitarian ethical question (what is the harm?).

Assumptions : Is it fair to assume you've concluded that this company isn't worth the next five years of your life? It seems you have done the necessary market analysis to reach that conclusion. You've also concluded that you can't personally affect the outcome.

I'm also assuming you haven't made an explicit promise to stay until a certain date.

I'm also assuming you haven't personally been asked to stay on the job by a founder or a board member to help the company execute a so-called "pivot" or other big change in the business direction.

If any of those assumptions are false, and you're still being paid, you should stay. You have a very rare opportunity to be with a company through hard times and help do a turnaround. Even if the turnaround fails, you'll gain great, and marketable, experience.

If those assumption are all true, it is time for you to depart.

Short-term harm: A lot of people will be harmed short term by your departure.

You will: you'll have to do the hard work of adjusting to a new workplace. And, you'll have to endure the inevitable "rats desert sinking ships" wisecracks. But the reality is, a majority of startups sink.

Your present co-workers will be harmed: as you say they have a small team and the others will have to pick up your workload.

Your founding team will, as you mentioned, see this as another setback, just turning the wrench a little tighter in their guts.

So, short-term harm is inevitable. That would be true if you were leaving Exxon for General Electric. Most of it has nothing to do with the size of the company.

Long-term harm: Who will be harmed long-term by your departure? I will make the case that nobody will be harmed.

Will customers be harmed on any large scale? Probably not; your little venture doesn't have many.

Will your founders be harmed? Quite the opposite. I've been where they are. I know that departing employees can help shine the light of truth through the fog of "I'm a hero, I can save this company." Your departure may be the impulse they need to think clearly about their futures.

Will your investors be harmed? Not by your departure.

Will your co-workers be harmed? Probably not.

Will your reputation and career be harmed? Certainly not. People who have done their best for startups have gained lots of experience that any other workplace will value.