Return On Hard Decisions

I spent much of yesterday going through board decks and other year-end reports.

It was an incredibly gratifying experience after a hard year.

I spearheaded quite a few restructurings this year. A lot of people lost their jobs as a result of those efforts.

It was a year of hard decisions and hard conversations.

But as I sat in my office and read through the reports and decks, what came across loud and clear was that we had made a bunch of right decisions.

A lot of companies that were wandering in the wilderness are now headed in clear and exciting directions.

I continue to feel badly for the people who lost their jobs or quit their jobs in the wake of these restructurings. I realize that many of them had a hard year too and I am sorry for that.

But I feel great for the companies who have been revitalized and for the people who are working in them with a jump in their step and a feeling of optimism and purpose.

This time last year I had a bad feeling in my gut and was having trouble sleeping. I knew what I had to do and dreaded doing it.

Right now, I have a good feeling in my gut and am sleeping like a baby.

That is a nice return on hard decisions.


Comments (Archived):

  1. jason wright

    there does appear to be an immutable ‘law’, that creation and destruction go hand in hand, and come in cycles. first one, and then the other, and continues in some form or other forever.I keep waking up at ~4am with some issue or other bouncing around the walls of my mind. you’re not the only one Mr. Wilson.loving my Pixel. what other phone provides ‘request call back’ support where a real human calls me instantly to discuss (and in a British English accent) my smartphone’s issues? Google is no angel, but this is truly a fucking awesome service, and 8.1 is nice. The problem will come if too many people join the fun. I would then expect this quality of service to taper off rapidly. exclusivity does have its attractions at times.p.s. does the Apple iPhone provide this service? I wonder.

    1. JimHirshfield

      Request call back…how is that awesome? I mean, that’s existed for a number of years from support depts.But yeah, my Pixel 2XL is awesome!

      1. jason wright

        it is awesome to me. I have low expectations of web tech brands 🙂 and recent experiences confirm this to be a well found low expectation. some support departments are truly malicious in their behaviour, and if they are reading this they will know who they are…and it’s not finished with.does Apple offer this? does Samsung? Huawei? Sony? Motorola?

        1. JimHirshfield

          My bank offers call back service…woo hoo! Love my bank, said no one ever.

          1. jason wright

            you win. I’m buying a smartbank instead.

          2. Lawrence Brass

            I want a smart bank too.

          3. JimHirshfield

            Ooh, big spender

          4. BSchildt

            In the early ’90s, The Bank of Boulder (Boulder, CO) had 24-hour drive up teller service, opened the doors 15 minutes before the posted hours and closed the doors 15 minutes after the posted hours, offered hunting rifles in lieu of interest on CDs, and created and managed the largest 10K running race in the US at the time. Steve Bosley, the founder, and his bank were loved by their customers.

          5. JimHirshfield

            A bank that handed out rifles? Did they provide face masks and getaway cars as well?

          6. BSchildt

            The bank received a lot of media coverage and deposits from the offer. No bank robberies 🙂

      2. jason wright

        I’m loving my Pixel 1 XL. I just need to find a nice flip case to baby it.

    2. Girish Mehta

      My mind is empty when I wake up.Ok, probably not just when I wake up :-).

      1. Lawrence Brass

        Your posts are proof of the contrary. 🙂

      2. cavepainting

        It was empty until the last moment before you woke up.. and the mind snapped into existence right after… which raises the question of what happened to it before and who were you when it was empty?

        1. Girish Mehta

          Like we discussed here a few days back, I think there is a lot to the idea that we are not our minds.Being Mindful seems to be in vogue. I like Mindempty :-).

    3. Lawrence Brass

      Some studies show that sleeping at night for 4 hours then being awake for 2 and sleeping again for four hours is a natural sleep pattern. If I go to bed early it is very common for me to awake at 2 or 3 am for no reason, more often I skip that first nap.I hope you are not calling the lady in the middle of the night just to talk to someone. ;-)…

      1. jason wright

        Really? Interesting.

  2. awaldstein

    Good one.I’m in the midst of a few ‘hard decisions’. We shall see what the outcomes are over time.Right decisions are in their own right, empowering.

  3. mikenolan99

    I had a good friend who held on to an employee for too long in his startup – knew for a year he had to go, but kept putting off the decision. When he finally did, he said it was like cutting an anchor rope in a boat dragging the extra weight. Immediately his company picked up speed, moral greatly improved, and he started sleeping at night. I keep hearing this story repeat itself…

    1. DJL

      I have one of these same stories. 18 months too long.

  4. Anne Libby

    Yes. “No decision” and “no action” are, actually, decisions.

      1. Michael Elling

        It takes 1:15 to get to the punch-line! How did you ever pull that one up??

        1. Anne Libby

          I’m guessing he might have been a fan back in the day. (As my brother was as a teen. Rush was huge with him and his friends in hs.)

      2. Anne Libby

        Whoa. I probably haven’t heard that song in (ahem) several decades.And, yes!

    1. JamesHRH

      Quite often, the people who lost jobs this year made no decision earlier in the year.Rough part of town.

  5. Rob Sobers

    Reminds me of the adage, which I’ve found true for me personally: success in life is directly proportional to the number of hard conversations you are willing to have.

    1. sigmaalgebra

      … and inversely proportional to the amount of pop culture BS are willing to believe.

  6. harris497

    Great life lesson even for us non-VCs.

  7. pointsnfigures

    Which is a harder decision, not to invest or to structure a down round and re-invest? Why would you do the down round?

  8. Kent Karlsen

    Sounds like great leadership and focused management in hard times. Maybe also a reminder to us all how important Balanced Score card is to communicate status on KPA (activities) / KPI (indicators) for; market, finance, internal and innovation.

  9. DJL

    Venture “Capitalism”. It isn’t always pretty, but it works. In order for some teams to win others have to lose. The good news (I am guessing) is that the people who had to move on had great experiences and can find new and rewarding work. Congrats to all of the people who weathered the storm of change and kept going.

    1. sigmaalgebra

      > but it works.It doesn’t work very well. On average, from an old AVC post and from a Kauffman report, on average the ROI is poor.> In order for some teams to win others have to lose.Nonsense.The team that did GPS won. What team, then, lost?

  10. jason wright

    reading your blog in 2017 gives no hint (at least to me) of this slash and burn strategy. this post comes as a abrupt surprise. one would never have guessed. or, perhaps I just don’t have the eye for reading between the lines of your subtlety.’bloss’?’glob’?

  11. Chris Piatt

    One of my favorite concepts in all of religion is the idea in many Hindu traditions of Shiva as both creator and destroyer – embodied as two sides of the same force. The idea is that there can be no meaningful progress without creative destruction. Poetic and rings so true…

    1. sigmaalgebra

      It is common but NOT necessary. The sickening, passive, defeatist attitude from parts of Asia and South Asia make my stomach turn at those places, make me just want to f’get about them. With both the Enlightenment and the Age of Reason, Europe was right and the holder of the crown of civilization. Anyone in the world can understand — just go to an okay library.

    2. Vasudev Ram

      That may be so in some traditions (and there are many). But another common one is of the Trinity – Brahma the creator, Vishnu the preserver and Shiva the destroyer.

  12. Frank W. Miller

    I spend a lot of time criticizing things associated with VC. There are many facets of it that imo are broken. I tend to comment focused on the entrepreneurs point of view. Typically my comments are about how VCs and the system are causing harm to the entrepreneur and that they ultimately are the engines and that VCs are necessary but evil.That view of the world goes both ways. You probably understand more than anybody that poor performance resulting in consolidations and ultimately job loss are mostly because of the entrepreneurs. While the overall economy has something to do with it, ultimately, if they had built their businesses in a way that was not “wandering in the wilderness,” they would not have put you in the position of having to do what you did with these companies.I don’t give you and other VCs much credit, feeling like you’re basic place in the world is non-productive. Likewise, I don’t blame you when things go bad. Its the company’s faults ultimately. That probably doesn’t make you feel any better when you see people walking out the door but my view is, it has little to do with you and mostly to do with them.

    1. PhilipSugar

      I only reply from the Entrepreneurs perspective. Nobody puts a gun to your head and says take money. Now after you have taken money I will say that a big contributor to potential problems is the VC generally is saying go, go, spend money and the entrepreneurs optimism is fueled. People get hired projects that are questionable are funded, it’s easy to spend money, it’s hard to make it.Once you are in that bad place there is nothing to do but fix it. Then the VC is saying no, no, instead of go, go.The sad part is it does affect peoples lives. Not just employees but customers and the whole ecosystem as well.But as they say it’s the least worst alternative. There would be many fewer great companies without VC’s

      1. sigmaalgebra

        It can be done a LOT better. In particular, for the crucial technology, VC investments are at the back of the class. Much better? Sure, the old monopolistic Bell Labs — transistors, tiny solid state lasers, optical fibers, the 3 K background radiation, error corrective coding, and information theory. The Tukey work at Princeton and Bell Labs that gave us the fast Fourier transform. The US DoD. The US NSF and NIH. The NSF funded, MIT Project MAC that did Multics and Kerberos. The US Department of Energy funded work at the U Berkeley computer services department that did BSD Unix. The MIT work that did RSA. The ARPA work that did TCP/IP and the Internet. The Corning work that did the glass for the optical fibers. The IBM work that did giant magneto resistive disk heads, scanning, tunnelling electron microscopy, and the amplification of signals on optical fibers. The US DoD funding of GE and Pratt and Whitney that gave us great jet engines. The DoD work that gave us GPS. The NIH funding with Venter and Perkin Elmer that gave us DNA sequencing. Not a dollar of VC funding anywhere in sight.

        1. Richard

          My first job out of college was designing designing / building Lockheed’s F35 prototype. Today you’ll find it’s Texhnology spread around industry.

      2. LE

        a gun to your head and says take moneyGenerally yes but not true in every case. Why?Because you have to protect weak, stupid, desperate, or disadvantaged people. That’s taking the other side of this. Kind of like ‘nobody is holding a gun to your head and making you play college football’. Or ‘you could have objected to the sexual advances even if the perp was your boss or a customer’.The sad part is it does affect peoples lives.Which part is the sad part? Who is being taken advantage of?(Sad to me is relocating your family for a corporate job and then losing it when the company decides to do layoffs and the decision maker is far removed from the people that are impacted.)

        1. sigmaalgebra

          Even worse, from DC messing up the economy, when that guy gets laid off, likely he will never have a good job again.Net, we know how well the economy is doing — bluntly the worst in all of human history. Proof: The birth rate is less than 2.0 per woman. Done.DC? Viet Nam. Iraq. Akrapistan. Ballpark in current dollars that was $200,000-300,000 per US family. That would have supplied the house and let the wife do well in motherhood. But LBJ, Nixon, and W all had such really important things at which to throw US blood and treasure.Trump is correct about that problem and the fix, but now, due to the past economic nonsense, we have such a huge fraction of people smoking economic crack and shooting up with economic heroin and killing the economy that Trump’s obvious MAGA plan is being resisted.

          1. Richard

            Pretty good point on the birth rate as a lead indicator on the health of a developed economy

        2. Lawrence Brass

          Entrepreneur on the move with employee carrying a backpack full of stock options…https://uploads.disquscdn.c

        3. PhilipSugar

          You have to ask for VC money. In the extremely rare case the VC approaches you like for Quizlet you have a choice.Nobody has ever been hired with these words: Well I don’t know if this is going to work out but change jobs….I know you don’t have equity but I am going to pay you less and give you options that are way out of the money. Hey it’s only your life we are talking about here.Now I agree with you, ever since 1992: Dupont’s first major layoffs that just shocked the entire state because nobody ever got let go from “Uncle Dupy” unless you did something really wrong.I was able to say come work for me learn and grow and you play a critical part and role to our success and if we are successful you know you have a job.The sad part for the Duponters was that many had become complacent and were not hirable. It was a two way street. Dupont wanted some people to “just make the donuts” and people were willing to do that because they thought their job was just their job.

          1. LE

            I guess the bottom line is you have the short end of the stick in life if you are either stupid or naive. Nothing new about that. On the other hand there are a fair amount of people that I have found out make out exactly for that reason. I’ve told the story of my ex brother in law who worked for Apple years ago and bought a house down the shore a block or so from the beach. He buys it for roughly $100k and it is a wreck. He proceeds to renovate it. I asked him if it had electric or gas heat. He said he didn’t know that the contractor was taking care of ‘all of that’. He had a mess with the house as a result of what he didn’t know about doing a major renovation.But guess what? He still owns that house today and you can probably guess what it is worth. He has rented it every summer since he bought it when they weren’t using it.

      3. cavepainting

        Very true. There is imperfect information on markets and VCs are incentivized to go hard and aim for the big play.Things often do not work out as planned. Even experienced boards and management teams often get sucked into a rah-rah cycle and before they know it, they have raised too much, spent too much, and are now facing the music. The wise men and women on the board who have seen it before have an obligation to act as a moderating influence when key decisions are made upstream (well before the hard decisions come down the pike).

        1. PhilipSugar

          Exactly. When I am talking to people sometimes they think I am too conservative (taking risks), and sometimes I’m sure I am, but there does need to be a moderating force,

    2. LE

      I don’t give you and other VCs much credit, feeling like you’re basic place in the world is non-productive.I don’t know how you can say that. The vast majority if not everything (because of synergy) that exists in tech would not exist (won’t even insert ‘probably’) without venture money. Where would people get capital for risky ventures? Where would the investment come from?

      1. Frank W. Miller

        Entrepreneurs produce. VCs (and all financial people for that matter) just move money around on a board. Thats ultimately overhead, its not productive in the economic sense

        1. Evan Van Ness

          Allocating money efficiently is productive in an economic sense.Being a recruiter, a mentor and a strategic Socratic sounding board are all legit ways that an investor can add value

        2. LE

          How does the entrepreneur produce without money? And specifically money that others are prepared to lose as opposed to their own assets. And that assumes they even have any. What am I missing here?And VC’s and angel investors provide more than money. They also have contacts, advice and experience that at many entrepreneurs lack. [1] You really don’t think that Bill Gates, Steve Jobs or Sergey and Larry would have pulled off what they did without ‘adult supervision’ do you?The advantages of that OPM are to numerous to mention. You can iterate faster and make more mistakes and still stay alive. You don’t have to be right in every decision. That is a huge time saver. Not having to worry that you are potentially spending your last dollar (especially a problem if you are young and clueless).I don’t think even the money men realize this since they have never started a business without their type of help. It’s an entirely different world out there when it’s you and what you have to lose on the line.[1] Doesn’t mean they are always right and doesn’t mean that all of them bring the same value to the table.

          1. Richard

            Let’s not forget that the VCs almost took down the musical chairs economy in 2001. And the current relationship between VCs and the press is disturbing.

        3. cavepainting

          Financial and product markets are different. They are intertwined and perform different functions. Saying one is better than the other is not dissimilar to arguments favoring one gender as better than the other. You need both for value creation.

        4. Richard Carlow

          That’s like saying the rocket fuel is just overhead to the rocket. It need not be VC money, but without capital a venture runs out of gas.I am not a huge fan of the typical VC either. Their collective returns are exhibit A highlighting their general effectiveness. The last money in, preferred status, 1st money out thing is something to be avoided to whatever extent is prudent. At the same time, when the situation is right, you need capital to get to where you are going.

    3. Lawrence Brass

      From my perspective and experience living and working in South America where there is nothing comparable with the VC ecosystems you have access to in the US or Europe, I think VCs are the expression of a developed private capital system and key for a country’s economic growth and development.I have learned to see them as risk managers and capital arbitrators, as an alternative capital source for growth, a choice. A good choice if you feel capable of producing 10, 20 or 100 X gains.It is hard for sure, but have you seen their eyes shine at the mention of 100X? The only thing you have to do is put on your wing suit, pray, jump and… execute.Entrepreneurs are half crazy people, risking more skin than VC’s. The combination of both roles is very powerful though.

    4. jason wright

      The majority of it is ultimately just ‘churn’. A few enduring companies, but mainly it’s just money moving around the Monopoly board.

  13. Lawrence Brass

    That is all it takes people, go out and vote!The only way to change things is to participate. I am exercising my rights this Sunday at our Chilean presidential election, second run.I wonder about the weight the rejection vote had over the partisan in Alabama.—–Chilean general election, 2017…Two round electoral system…

  14. Adam Parish


    1. sigmaalgebra

      “Stronger than an acre of garlic” (@JLM). Screaming out loudly enough to blow the rings off Saturn but in silence. Meaning without words and words without letters.I’ve seen that picture off and on for decades, but it took me a while to accumulate enough knowledge about life to see the near universality and strong and clear “communication, interpretation of human experience, emotion” (definition of art) of that picture and your one above I’ve never seen before.From such pictures, etc., humans need to get smarter. As your pictures show, we’re not short on good reasons to quit being dumb.To borrow from the movie Contact, You’re an interesting species; an interesting mix. Capable of such exquisite dreams; such horrifying nightmares. Maybe her father had to leave her. If so, then there is music for that:…Yup, I’ve been close enough to that situation to see that that music is just what the heck that situation is like.

      1. jason wright

        The FSA was without peer at documenting how much suffering and grinding poverty can exist in a ‘rich’ society. A truly shamful period in American history, sorry to say.

    2. pointsnfigures

      FDR dispatched a couple of photographers to take photos of people in distress. The reason he did it was to advance his agenda. “Freedom From Fear-Professor David Kennedy (Stanford)” Book came out in 2001 and it’s well worth reading. Might change the way you look at FDR and The New Deal.

    1. JLM

      .There is a lot of suffering in the world.JLMwww.themusingsofthebigredca…

  15. sigmaalgebra

    >A lot of companies that were wandering in the wildernessWhat are the real causes of that? Can we get at the causes of the weeds and not just have to use a Weed Wacker or spray Roundup?

  16. Jan Cifra

    I am glad to see that an experienced person like yourself still dreads these kind of decisions and the resulting actions. I always thought that eventually it would come easier, but it never did. Also – for me anyway – these are very lonely times if you know what I mean. Nobody can help you with these – yours to carry as a leader.

  17. Kirsten Lambertsen

    As a ninja-level conflict avoider, I dodged making hard decisions for much of my early career. I’ll never forget bravely making that first hard decision and taking action. What an eye opener. I’ve managed to get so comfortable with it that now I have to make sure I’m not being TOO brutal.The hard decisions are absolutely among the best for ROI.

    1. JLM

      .Haha, a “ninja-level conflict avoider”?Now that must have been a long time ago.Don’t get me wrong, I love ninja-level conflict.JLMwww.themusingsofthebigredca…

    2. jason wright

      from ninja to katana wielding ronin in a single lifetime 🙂

    3. pointsnfigures

      Sometimes being a ninja level conflict avoider comes from upbringing….(this is not meant to be derogatory, I have stories….) Totally see where you are coming from.

    1. LE

      I saw that in Firefox as well!Interesting bookmark bars!

      1. Kirsten Lambertsen

        Ha! I realized after I shared it that I just provided a little view into my weird world :-DLooks like a simple matter of using // instead of html comment tags (which don’t print out in Disqus comments!).

        1. Kirsten Lambertsen

          <!– –> Ah figured it out. Have to escape the opening <

          1. Vasudev Ram

            Globally or manually change the less than sign to ampersand ell tee semicolon (edit: typing it literally did not work, fixed now, haha, sort of like Muphry’s Law (note spelling)).…Or pass the HTML through some tool that does it.Used to have this gotcha on my blog when I forgot to escape the special HTML characters – it can swallow lots of characters if not escaped.

        2. Anne Libby

          Lol I’ve done that before, too.

        3. Lawrence Brass

          Hmm.. let me see the palm of your hand, I can read your future.. this line, see? There is a local host, someone at home maybe.. that is looking for a quick start.. he might invite you to shop furniture (beware!).. and here I see the line of life crossing, you are tired of that old language.. you want to go find a new one, or maybe write or build something or perhaps draw something.. it is not so clear.. maybe a hacking career.. I don’t know.;-)

          1. Kirsten Lambertsen

            Ha ha ha! Love it 🙂

          2. Vasudev Ram

            I hope Kirsten crossed your palm with silver for that prediction, my friend :)‘ Shoon thimble-engro Avella gorgio.’ [1]….Read that book as a kid. Good read.[1]…Related:…”The quintessentially Spanish flamenco is to a very large extent the music (and dance, or indeed the culture) of the Romani people of Andalusia.””Probably the most influential Romani musician was Django Reinhardt (1910-1953).”…

    2. Lawrence Brass

      good one!

  18. JLM

    .Success has a thousand fathers. Failure is an orphan.People get and make the big bucks to make the tough decisions. It comes with the paycheck.The big questions is always — What could we have done along the way to avoid this?Sometimes, the answer is “not a damn thing.”Part of capitalism is creative destruction.JLMwww.themusingsofthebigredca…

    1. Richard

      Not sheading any tears for VCs. Another gift this year with the IRS treating their income as pass through.

      1. JLM

        .My read is that they will have “active” v “passive” operator issues. I don’t think they will get “pass through” treatment if they are not active managers or actively managed businesses.If they are fund managers, rather than operators, they fall under a different classification. This happened in 1986 when passive investors were unable to take depreciation and interest deductions as they were not operators.The final docs are supposed to be available tom’w.JLMwww.themusingsofthebigredca…

  19. sigmaalgebra

    > PedophilesBS. Total BS. Total made up, cooked up, faked up, gang up, pile on, trial by irresponsible newsies, grab’m by the heart, the gut, and below the belt, always below the shoulders, never between the ears, trial by headline, destructive nonsense.There wasn’t a single word of credible evidence for any such thing at all. It was just a big shovel full of total, wet, still warm BS just thrown out there.The proper, first reaction is just to ignore it.It came first from WaPo, on paper can’t compete with Charmin and on the Internet useless for wrapping dead fish heads. Toxic if consumed.

  20. Tom Labus

    Now if we could only do this exercise with congress!!

  21. Vasudev Ram

    Reminded by the Japanese theme seen in the comments (ninja, ronin, etc.) – there was a novel by Trevanian, called Shibumi. Read it as a kid. A theme or motto repeated now and then in the novel by the hero and his friends is: “Who does the hard things? Those who can.”…

  22. cavepainting

    The hardest impact is for: a) the employees who were let go, and for b) the management who had to make those decisions. It is somewhat hard for the investors, but a lot less so relative to the parties directly involved. Distance from the actual employees involved provide investors added perspective on what’s the right thing to do and also makes it less personal.I think it is fair to say that a lot of boards are clueless until the shit hits the fan, at which time they are forced to make the hard decisions.Yes, great, but also consider the board and management decisions that led to that point in the first place, and what could have avoided that. I wonder how many play the tape back to do a genuine post mortem and what they should have/ could have done differently.Some of the hard decisions are also incredibly hard to evaluate and understand until the full cycle plays out in the market over time. A restructuring or a double-down is a horrible or great decision based on what happens downstream and what did not happen.

  23. george

    When things drift off course, you have to eventually pick a lane and stick to your convictions. I’ve, learned this lesson – If you wait to long, you create your own apocalypse.

  24. jason wright

    Of course the flip side to this is that if it remains a shit show and DECISIVE action is not taken eventually the most talented people will up and leave.The Decisive Moment – Henri Cartier-Bresson. Flick through it. It may sooth your mind. To look upon the faces of some of the greats as they look back at you, to know that they have come and gone, that they faced this world, of good and evil, and prevailed.Reducing people to numbers on a balance sheet is for functional borderline sociopaths.

  25. sworddance

    Please never say that you did anything “hard” if you were the person doing the firing. The hard thing is dealing with the loss of income.Your decision was easy. There was no life altering consequences attached to it.