Dear Madeleine,
I am at a crossroads and don’t know which way to go. During Covid, I got a great idea and started a very cool online business. I did so well that a few people invested in my little company, and for a while it grew like gangbusters. I hired some people to help out and we’ve had a great team for a few years now. We have all made decent money and had a lot of fun.
Over the last year, it’s been hard to compete with all the new entrants into the same space—most have more investment funds than I do. I’ve been approached to sell to a competitor who talks a big game but really just wants me out of the way. If I sold, I would have enough cash to pay back the investors, call it a day, and move on. Alternatively, I could raise more money and try to compete by upgrading our technology, hiring more people, etc.
Over the last year, I’ve been stuck in front of my computer 18 hours a day because of this business. There are so many other things I want to do. I was able to prove my concept and keep myself entertained, but now I’ve really lost interest.
My problem is my employees. I really like all of them and worry that they will feel betrayed if I sell out and walk away. There is no guarantee that anyone I sell to will keep them on, and they are all perfectly capable of finding new jobs, but I don’t want them to hate me. I am starting to feel trapped.
I have made a pros and cons list and discussed this with my nearest and dearest, but can’t seem to make a decision. I am interested to hear what you might suggest.
At a Crossroads
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Dear At a Crossroads,
I deeply appreciate how much you care about your people, but let us remember that you started your business as something fun and interesting to do. It sounds like at no point did you think “I am going to start a business so I can provide employment to people for the rest of their lives.”
I learned something that has turned out to be true from reading The E Myth Revisited by Michael Gerber decades ago. He said there are three kinds of people who start businesses: the Entrepreneur, the Manager, and the Technician.
The Entrepreneur is the dreamer—the person who spots a need or opportunity in the marketplace and creates something new to fulfill that need. This sounds a lot like you. You created something cool, and are now ready to move on to other things.
The Manager is the person who craves order and is good at creating the systems and processes that will ensure seamless running of the business. They are good at spotting problems and solving them for good. These are the people who tend to buy franchises because they come with a proven concept and systems. Creativity is not required.
The Technician is the person who is very good at a technical skill or expert at delivering a specialized service. Think massage therapist or, as the example Gerber used in his book, someone who makes extraordinary pies.
To create a business that thrives long-term, the person who starts it needs to understand which of these is their type, and find partners or employees who are the other two types. Both Entrepreneurs and Technicians desperately need Managers because there will always be tension that needs to managed. It is extremely rare that a person who starts a business is equally gifted in all three of these required areas.
These distinctions have been extremely useful to me personally, helping me to see that I am a Technician with an entrepreneurial spirit. Essentially, I realized quickly that trying to remain a Manager in a business that is up and running is a terrible idea for me. So I have had a career of starting things (sometimes successfully, other times not so much) and then handing them over to Managers.
This is a lot of detail to explain that, if your entrepreneurial bent were strong enough to keep you interested in solving problems and truly scaling your business, it would make sense for you to stay with it. But it is eminently clear that you have already lost interest. And you have an opportunity to sell what you created to someone who is enough of a Manager to scale and compete.
It sounds like you have a deep core need for variety. Core needs must get met or they will wreak havoc on your life and your business. Why would you saddle yourself with something you are already bored with? In this case, it would be for sentimental reasons—to deliver on a promise that you never even made. That, my friend, is a recipe for disaster.
There are steps you can take to care for your people as best you can. The first step would be to have a chat with each of them, explain your reasoning, and listen to their thoughts. You can express your care and concerns while still sharing what is real for you.
You can, of course, do your best to encourage your buyer to hang on to as many current employees as possible, which I am sure you will do anyway.
Finally, you can put your money where your mouth is. You might consider sharing a portion of the sale price with your people so that they each have a little nest egg, or enough to tide them over until their next opportunity presents itself. Once you have paid off your investors, you can do the math and figure out what makes sense to share with your employees. I think this would demonstrate your commitment and go a long way toward mitigating the pain of the loss and change.
Nothing lasts forever, At a Crossroads. You must honor your own needs and your strong instinct that it is time to move on. You can do that while also respecting your people’s hard work, the fun you all had, and how fond you are of them. You can close this chapter of your life honorably and without regret.
Love, Madeleine
About Madeleine
Madeleine Homan Blanchard is a master certified coach, author, speaker, and cofounder of Blanchard Coaching Services. Madeleine’s Advice for the Well Intentioned Manager is a regular Saturday feature for a very select group: well intentioned managers. Leadership is hard—and the more you care, the harder it gets. Join us here each week for insight, resources, and conversation.
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