Here is a hypothetical conversation that might have happened (but didn't) with some high falutin’ person at Microsoft on the whole Don Dodge thing.
Imagine a scene where I’m sitting in a Seattle coffee shop having a clandestine meeting with the Microsoft individual that was involved in the recent, highly publicized departure of Don Dodge. (If you don’t know anything about this topic, you can get caught up with this TechCrunch article and it’s 200+ comments).
Dharmesh: How could you allow Don Dodge to quit Microsoft? Seems someone wasn’t working hard enough to keep him happy.
Concerned High-level Microsoft Person (CHMP): Well, um, he actually didn’t quit. We let him go…
Me: Choking on my decaffeinated coffee (which turns out does actually contain some caffeine, enough to keep me up at night, which I don’t really need any help with). What!? Why the heck would you do that?
CHMP: Well, it was part of a much larger reduction in workforce event.
Me: Um, ok, but weren’t there tens of thousands of Microsofties that weren’t let go? Why wasn’t Don one of those people? Seems if things were completely random, there’d be a higher probability that he’d wind up in that bucket instead of the “let go” bucket.
CHMP: Well, it wasn’t really random. It’s not like we pulled names out of a hat. At Microsoft, random is a 6 letter word. In any case, we actually put him on the list to let go.
Me: Oh, I see, so you’re really saying that the whole notion of attracting developers onto the Microsoft platform — particularly getting startups on board while they’re still young and impressionable is no longer a strategic priority.
CHMP: Well, I wouldn’t quite put it that way. We’re still all about “developers, developers, developers”.
Me: And you don’t think that Don was helping out enough in terms of putting a semi-tolerable face on Microsoft? Do you have a sense for how much discussion has been going on in the blogosphere now talking about how stupid this move was?
CHMP: Well, in our defense, all of the recent fall-out from his “departure” happened after the event. We couldn’t possibly have known that Michael Arrington and a bunch of other high-influence people would react so negatively. We figured, hey, we’re letting a bunch of people go. This is one of them. It’s a bad economy and all that…
Me: So, you didn’t consider the PR impact at a time when you can use all the positive PR you can get? You didn’t know that Don had a blog, or that you paid him to fly around the country and evangelize and build these strong connections in the tech industry?
CHMP: As I said, we couldn’t have known that the response was going to be so negative.
Me: And, what about the fact that he got hired by Google. And that he’s now switching to Google products — and writing about it. This can’t be sitting well with you.
CHMP: Well, yeah, we’d prefer that he had not gone over to one of our arch rivals. In fact, Google is the last place we wanted him to wind up. And in terms of his switching to Google technology, he’s just one user, we’re solving for the “long term”.
Me: So, let me get this right: You had him on the list to let go, you knew he had reasonably strong brand and a community of followers (including some high-level folks) and you knew that Google was high on the list of places that would likely recruit him.
CHMP: Yes, that’s kind of right. But, we didn’t KNOW that the PR cost was going to be so high.
Me: And what about the whole Boston thing? Wasn’t it kind of nice to have a well respected, likable guy that was singing Microsoft’s praises in the second-largest tech startup area in the world? Don’t you think it’s going to hurt your “long term plans” to lose some of that mojo?
CHMP: Ok, between you and me, we were idiots. In the whole grand scheme of things, Don wasn’t that much money. A mere rounding error in the PR and evangelism budget. And it’s not like there were 50 people like him running around at Microsoft. He had some unique value, some great connections and did an exceptional job evangelizing Microsoft while still maintaining credibility (and dignity). That’s not easy to do. And yes, we knew there was the risk Google would recruit him — they’ve been known to do some smart things. And yes, we’re kicking ourselves now because from a business perspective, Don was accretive. But, let’s talk about the real reason this all happened. Given infinite time, we could have likely figured out that this was a bad decision. But, realize that we’re Microsoft. We’re big. We can’t afford to analyze each individual decision like this. Thing of it as the price one pays for selective focus. You can fault us all you want, but hindsight is 20/20 and foresight is expensive.
[end of scene]
This brings me to the startup moral of the story. You should be investing considerably in your team. If someone is profitable (creating more value for the company than they’re costing you), then there’s only reason to ever let them go: Their “payback” period is longer than your cash resources will allow. Said differently, they’re great, and they’re going to make you money, but you can’t afford to keep them. That’s a legitimate (and often common) situation.
You should also factor in the the likely outcome of letting someone go. Think through the likely scenarios. One additional high-level question I often ask myself that is looking to leave: Would I rather this individual work for me, or my strongest competitor? If I want them on my team, I fight hard to keep them.
What do you think about assessing the value of members of your team? Do startups tend to over-estimate the competitive risk of an employee leaving? Do we make mistakes in terms of choosing who to let go when it’s necessary to do so? What do you think?