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Dear Kunal Johar:

Thank you for applying to us for credit. We have given your request careful consideration, and regret that we are unable to extend credit to you at this time for the following reasons:

History of losses; insufficient cash flow to service the loan, insufficient collateral to secure the loan

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Well, I guess it was worth a try.  This frustrating news hit my inbox at 9 PM on new year’s eve.  I was a bit down, but shrugged it off; we’ve gotten this far without outside financial assistance and we can always apply again next year — or try other sources.

It seems like 2014 probably won’t be our breakaway year, but i’m ever optimistic that we are on the right track, even if it takes longer than we hope.

For men, getting a haircut is the single most important activity of the month.  A solid haircut can set the tone for the next few weeks.  On the contrary, a poor haircut isn’t so bad, it’s not like it’s a downer, it just means no temporary ego boost.

Up until 2012, I got my haircuts at just a few places.  The Haircuttery types, then at school I went to the Watergate Barbershop.  When the stress of work started picking up and I was working 6-7 days a week, I could not find the time to go to my usual place.  I decided I needed to find something closer to work.

Tim suggested, I go try out his stylist at Salon Balyage — $45 haircut.

My first haircut there was insane, I felt like I was being serviced by a prostitute / hair stylist all in one.  In her broken accent, she would tell me about all the customers that bought her tickets to the “sky bok” and those that would fly her out on vacations.  I could not believe people actually go to these things.  I’d leave with an excellent haircut, but I’d be far more tense than when I stepped in.  The salon workers really don’t shut up.  Still it took me 6 haircuts and $270 + tip before I decided to part ways.  The good haircut simply wasn’t worth the agony.

I was quickly over salons, and decided to return to the barber shop.  Yelp gave me a few results, each with varying success.  At one place, one person buzzed my hair, then told me “the person with the magic scissors” will now do the cutting.  That tag-team haircut was both a first and a last for me.

Then I tried Walls Barbershop near the White House — they had an interesting setup — 5 flat screen TVs that would play Khia music videos on repeat.  Watching my barber’s 5-6 year old daughter dance to “My neck, my back…” may have been tolerable, if he didn’t treat my scalp like a salad at Chopped.

My mom — the biggest hair critic of them all looks at me with eyes of shame.  “What is this Kunal?” as she grasps a 6″ segment of hair next to one that is 2″ — frankly she was right.  I started my search again.

I don’t know what the Yelp gods did differently this time.  I searched for “Best Men’s Barber Farragut North” — a search that failed me twice before.  This time, a result caught my eye.  “I’ve been to Bathsheba for 16-17 years — a quality cut at a quality barber shop.”

I call up Charles Barbershop at 1800 K st and ask for an appointment with Bathsheba.  As I walked in, I recognized there was something different about this place.  Two very old men, one drinking a beer (this was 9:10 AM), and a woman.  Soft Christmas music playing.  No one one was talking about sports or politics — the discussion was focused on a water main breaking 3 blocks away and anecdotes from the barber’s or the customer’s lives.

It’s now 9:30 and it’s my turn.  “Bathsheba, I hear you are the best.”  She smiles and sits me down.  She asked how I wanted my hair cut, I mumbled, “I usually get buzzed a 4 — keep it simple.”  She said ok

A few minutes later she said, I want to let you know I cut hair how I please.  If you say 4, but I want to do 3, I do 3.  I said “sure, I read that about you, that is why I am here.”

“I also read that you like cutting men’s hair because men don’t cry about their hair”

With that comment, she opened up about her life story.  Behind me was a picture her daughter had taken of herself getting a haircut on the streets of India.  She said, “look, he has no teeth, they are in the middle of the street, but he is intently focused on cutting hair — this to me is art; this to me is passion.”

Bathsheba was of Bolivian descent and started cutting hair around the age of 17.  She’s now been cutting hair in the U.S. for over 40 years.  Her ex-husband is greek, he moved to America after he was 30, and she claims he could not tolerate it here.  She moved at a younger age and felt like she adapted well.  Her daughter married a Polish guy and they work at the UN.  She is visiting for the holidays and they are going to watch Jiro Dreams of Sushi on Netflix (my suggestion).  The fact that I know all of this sitting through a haircut amazes me.  I cannot stand small talk, I really believe everyone has a story worth hearing; especially older people.

Bathsheba tells me the story of Charles Barbershop.  The location I was getting a haircut at was open for about 20 years, which she has worked at for nearly the whole time.  Charles however started his barbershop in DC over 100 years ago.  When Charles died, he left the shop to his brother who kept the name.  When his time came up, he left it to his son, George.  George was standing next to me, nearly 80 years old now enjoying his beer.

“3 years ago, George sold this barbershop to me on the condition that I keep the name.  So I want to let you know that I am the fourth Charles, and this is my shop, Charles Barbershop,” said Bathsheba.

I was floored.  To see that kind of loyalty run through a business for so many years is so humbling.  I have no idea what anyone’s financial position is in that shop.  From what I saw though, I could tell these are people who value old times and tradition over financial gain.  If there was a desire for profit, I did not see it.  The desire was to preserve heritage.

Bathsheba is the first in the lineage outside of the bloodline, her daughter and son have no desire to learn the business.  How proud she was to say she is the fourth Charles; and how hard did she work for that honor.

As I enter 2014, I make the pivotal choice — do we do this on our own, slow and steady over the next few years — or do we get funded and get aggressive.  I’m all but convinced we need outside funding, but this stint at the barbershop makes me question what will happen with the loyalties already built up.

Ruslan – Lead developer in Russia stays on call 20 hours a day voluntarily to make sure issues are tackled quickly.

Tim H – Lead salesman might lose a sale, then show up at 7 AM for the next several weeks to make up for it — voluntarily

Zack – My go to guy – never hesitates to pick up a shift when he knows I’m struggling.  To date he has turned down several lucrative job offers that pay him double what we do, most recently from Google.

These are the players who joined us when there was nothing to join.  I know once we start taking money from investors / bond holders, the value of that loyalty to them is $0.  Tim and I will have to make the choice about what that loyalty is worth from our own pockets.

The real challenge with success is to preserve identity.  I wish I could say I know now that I will preserve the old time values like I observed at Charles Barbershop.

I guess I’m hoping these entries I make now, keep me honest to the test of time.

Today was by far the hardest day of work I’ve faced to date.  After nearly a year of deliberation, I finally decided to dismiss Sarah.  Sarah joined as our 2nd real employee just over 2 years ago.  I shared an office with her for about 18 months, and I operated as her boss, mentor and friend.

As an employer, terminating an employee is a horrid experience, it is horrible when the employee is great, it is even difficult when the employee sucks.  At the end of the day there is a personal relationship and a professional relationship that clash.

In hindsight it is easy to find red flags in the early days.  Her resume listed a 3.8 “technical GPA” which was a way of showcasing her already decent, but not a 3.8 GPA.  After her interview we went to a happy hour where we talked about job responsibilities and how her job would need someone to be super anal to which she responded she is not at all like.

So the initial blame goes way back to Tim and myself for overlooking key indicators.  As Sarah was referred to us by one of my friends, I did feel really responsible for making sure she was a success.  I set the goals high: “we want you to become the director of our websites within 3 years”.  I was hoping I could coach her into this position.

A year went by and success was half baked.  I felt as if every project was falling off when the going got tough.  When there was work overload, I would step in and work to help get things back to normal.  I genuinely felt that the workload might have been too much for her, but I was also suspicious that she may not have been working to her fullest.

Her work ethic was horrendous.  Arriving to work sometimes at 10:30 AM, looking flustered.  There was an excuse of the day nearly everyday.  Long lunches, several times per week.  Constant chats on instant message.  I kept track of all of this and had a review with her at the end of December last year.  I gave her a bad review — and I was an awful reviewer, I showed her this list of deficiencies and started reading a few out.

I realize that was a terrible way to coach someone.  Sarah was extremely defensive and told me I shouldn’t hold these things back, I should tell them as I see them.  I told her, “if I tell you not to be on chat during crunch time, and I see you then while away time playing a game on your phone, I’m going to be frustrated.”  She said, “no you need to tell me these things, how else would I know?”  I responded very sternly, “let me make it clear, this is the last time I’ll tell you about such expectations; I am not going to enumerate everything you shouldn’t be doing.  At the end of the day if your job performance falls, I would be forgiving, but if the work ethic isn’t there, then I will blame that first”

I could have done a better job, but the general consensus of my friends was, “I can’t believe she talked back to you.  if it was me I would have apologized and gotten my ass in gear.”  I told Tim after the review, she has 30 days by the calendar – something I didn’t tell her.  Low and behold, the next 30 days were amazing, work was getting done, projects completed on time.

Then several months passed and we started the beginning phases of projects again.  I realized that if I was hands-off, projects would have the minimum done on them and would start to need a rescue in the late stages.  I started implementing regular reviews with her, and had her come up with her own project schedule with weekly goals.  Then I’d review those goals with her every 7-10 days.  We set a benchmark date of what would happen before she took her annual trip to Korea; and what should happen after.

While all the goals weren’t met, I do believe she put in a strong effort to ensure she would not let the team down.  I was proud of her, as she was finally starting to think about the company as her team.

After her return from Korea, we resumed this 6 week plan idea.  This time, I decided I would not have as much oversight.  Maybe check in once every few weeks instead of every week.  Progress on projects started to slow.  It seemed like if I didn’t pay attention to things no one would pay attention.

I genuinely wondered if it was due to projects being difficult or a lack of effort.  The lateness resumed, long lunches resumed.  I recognized Sarah was probably getting bored with her job.  I started asking about what she would want to do with the new direction the company would take — she suggested marketing.  I thought to myself to give her a chance, to dive in, try something.

Bottom line if she was hard working we would find a place for her, since she did after all prove herself before.  A month went by, and not only was no initiative shown in any marketing type projects; the projects which could have been ahead of – or on schedule, had now fallen behind.  Things I’d ask for on a Friday, I would not even see started until the following Thursday.

Client calls were being missed or juggled.   When I gave feedback on something not going well, I’d get a very dismissive or defensive response.  I felt that Sarah was not earning her job she was bored at, nor earning any future job with the company.

I still hadn’t told Tim my feelings or discoveries, I continued to find a way to shape her within the new company plan.

At this point, I met with Tim to talk about the company future — and quickly shifted the conversation to the future of Sarah.  When I expressed I believed she was not showing enough initiative to take another job, he felt like it was best to let her go.  I was upset and he reminded me, “look, I feel we are a family, I don’t want to see her leave either, maybe we can figure something out, or give her enough notice.”

I drew org chart after org chart, and finally found a position for her managing the onboarding and training of new product clients.  I pitched it to Tim and successfully “saved” her job with the company.

Internally I felt like I was setting myself up for a bigger disaster.  Sarah earned more than Marc but she worked maybe 1/2 has hard (I felt).  If I made her in charge of new clients, it would mean she would be below Marc, but make more money — not a big deal, but when it came time for a promotion it would only be one person getting it.  I felt like this was just going to get worse and worse.

As I talked to friends about it, I expressed my frustration that I wasn’t even sure if she was doing any work — or if she was just really bad at prioritizing.  I decided to install a tool to capture information about what she does during the day.  The tool was set to capture screenshots but blur it out — it would also capture the titles of the window names; finally it would track time on each activity.  The intent was to get a general sense; not to violate her privacy.  I told myself I’d only look at the data if performance collapsed and it justified me to.

About 3 weeks later, I took a vacation to Miami.  There too this paradox caught me up and I shared my concerns with my host.  My friend there simply yelled at me.  Told me I was a huge idiot for letting her take me for a big ride.  After about 3 hours, I agreed I was too emotional, and it was a bad business decision to keep Sarah.  After all other employees probably noticed and would be themselves frustrated.

I got to the airport around 7 AM and decided a layoff was the best idea.  Let her know the company is moving in a different direction and we wished her well.  I thought 6 weeks of pay would be reasonable, it would be enough time to get her up on her feet passed the holidays.  My friend thought I was a generous idiot.

I arrived at the office around 8:30 AM.  I could barely sleep.  After deploying a few bug fixes, I printed 2 letters.  One letter of termination in which Sarah acknowledges, and a backup that says Employee Refused to Sign just in case.  Tim and I had an appointment to look at new offices from 9 to 11.  Walking back from our final appointment, we game planned.

When we fired Sean a few years ago, we really got taken.  An actual firing is tense no matter how right or wrong the employee is.  The longer it goes on, the more the employee demands you fall for, because you already feel so bad.

At the same time, Sarah was no Sean.  Sean was horrible, Sarah did work when really pushed, but other times just wasted time.  Still — I just didn’t know what to expect.  I felt like she was taking advantage of the job; maybe even any friendship I thought may have developed would be out the window as well.  She could have gone postal, she could have destroyed things, or she could have gone quietly, I just didn’t know.

What Tim and I knew was that we needed to give her the opportunity to go in dignity.  We owed her that.  We decided to tell everyone to leave and that we’d “fill them in later.”  Within seconds I take the letters and go with Tim to Sarah’s office.

My face was stone-cold.  My leg was shaking.  “Sarah, I want to give you the news quickly and directly.  We are letting you go.  This is a 100% professional decision and has nothing personal with you.”

Sarah: “Ha – ok”

Kunal: <Very nervously> “Alright, here is a letter, please read through it.  If you are comfortable, then please sign it.”

Sarah: “Wait you guys aren’t kidding”

—-

She asked for an explanation which I refused to give.  I felt that nothing good was going to come out of this.  She either was in or was about to be in a state of shock, anything I said would have been without clear thought and would just make matters worse.  My expression remained robotic, and she told me “listen Kunal, it’s okay.  I’ll be fine, but please do not be so cold about this.”

That struck me.  By the time I uttered my first words about letting her go, any feeling of vindictiveness fell out of my body.  I immediately thought that someone’s life was about to be changed forever.  Every action I made at this critical time would shape someone’s view of them self and their future.  This was not the time to make someone feel small — no matter what I may have felt before, I did not want her to fail.  Yet, if I showed this feeling, I probably would have cried.  Instead, I locked it all in, and gave off this look of pure business mindedness — no compassion.

I tried to loosen up and expressed many times that it was in the interest of the company to not keep her.  She reasonably concluded our changing business model had something to do with it, yet I still felt there was no point explaining the months I had spent trying to find a way to keep her.

I moved the conversation to what I felt was most important.  I told her again that it was a business decision, not a personal one, and that “our goal here is not to ruin your life.”  I explained I looked into her visa situation and that we’d do what we could to avoid her from getting totally shafted.  She blurted out that she is actually hearing back from a job offer the next day and just needed us to hold her visa for a week.

She asked for another chance, said that she was owed a warning.  If she had known her job was on the line she said, she would have worked a lot harder.  During these 3-4 minutes she was spilling lots of core feelings — that she needed this job just long enough to find something else — that please just give her another week.  I told her, that was in her benefit, not the company’s — another cold statement.

I also told her it would have ended differently “if she actually worked.”  This brutal statement made her question if she had any value in the company.  It was unfair of me to say without giving her any inkling that I was monitoring her.

Afterwards, I flashed back to when Coline broke up with me 6 years earlier.  I was shocked and totally caught off guard.  I started blurting out similar self-salvaging statements like “you can’t leave me, I won’t find someone else as easily” — what a statement to make.  Here she put in weeks of thought and in my shock I’m thinking about the immediate impact on myself.

As this went on, I agreed to an extra week.  After all we can afford the money.  I was starting to crack on my all-business approach, and the personal side came back in.

Sarah signed the papers, we gave her 15 minutes to tidy up.  While I reset most of our passwords, I asked Zack to block the rest of the access during our talk.  What a horrible feeling it must have been; once I left the room she saw on her screen “your account has been suspended.”  Still she held strong and did not cry.  She cleaned out some personal files and personal chat accounts; but left all work stuff intact.  She left things in an honorable fashion.

Shortly after she walked over to my room and asked to be walked out.  She said she still wanted to be friends.  I thought that was ironic, here i was being all business; and here she was saying forget the business.  On the way out she was tearing up.  I let her know again that our goal was not to mess up her life, and understanding the visa situation if she needed more time, I would be more flexible.

She left with with parting advice, that while I was a good person and good boss; I made her feel excluded, something to work on for the next person.

I asked if she wanted to part ways with a handshake, a hug, or neither.  She said “I don’t know.” Followed by “a hug.”  I teared up too and with that the a major era of the company had ended.

Shortly after she asked for some of her employee access to be restored for personal reasons.  I felt she had been honorable throughout the entire process and that I could trust her.  At the same time, I continued my H1-B research and found out a loophole she could use to stay longer if she chose to.  I also found out she could not collect unemployment.  I let her know I was willing to adjust her termination paperwork and set aside money, should her job offer not come through the next day.

Imagine, losing your job, not getting a clear explanation of why, one day after a great company dinner; 7 weeks after a generally positive review.  I started to think my warnings about getting work done and coming to work at a reasonable hour may not have been enough, as she said.  

I also started to think about what she said about not including her.  I realized that if someone needs to be fired – it should either be right away – if it isn’t right away, then the manager shares as much of the blame as the employee.  While as I write this I don’t know what the final termination agreement will look like, it seems like we have set aside 2.5 weeks of pay + an offer to let her keep her visa.  However when I first presented it, it was a ‘get nothing and get out’

I would be lying if I said her visa situation kept me more emotionally tied to keeping her.  I felt like it was my mission to drive her to succeed.  When she would take the easier or lazier way, I would get frustrated and instead of taking the time to confront her and coach her, I did indeed shun her.  It’s clear from what she said that she noticed.  I should have been harder on her from a much earlier stage.  If nothing else, this would have been less of surprise to her and would have ended in a much more controlled manner.

Letting go of Sarah was the most human feeling I’ve ever had at the office.  It was a recognition that growing a company is not just fun and games; it is in fact a collision of people and their livelihoods.  I’m still unclear on what my role should be, but it is clear whatever that role is; it is one that has a profound impact on others.

It’s likely that my company simply wasn’t the place for her and it was a long drawn mistake on both sides.

It’s also possible that she didn’t know how hard she needs to work to have a tremendous career.

I’m hopeful Sarah goes through the stages of shock and grief quickly – and especially hopeful she is able to get that job opportunity.  Regardless of what happens, I hope she can look back at this kick in the ass as the best thing that has happened to her career.

For myself, I hope that I can overcome my trait of shutting down all emotion, and remember business is business, but situations like this need compassion.

Short update this time.  Things are going pretty well, we just started the process to look at office space for next year.   We are at 7 people in the office now, soon to be 8 with a new support person.

One year ago we were 4 people, two years ago we were 3 people.

On paper it looks like the journey is going to start accelerating and I sure hope so.  Cash flow has more or less stabilized (which means, time to spend more and get back into scary territory).

Tim and I should have the plan for next year squared away in the next few weeks.  I hop to report that in December.

Just a quick reminder that we are lucky people.  Amy, our long time Virtual Assistant in the Philippines, was caught in the major earthquake yesterday.

She is reporting to work today, which is beyond baffling.  Perhaps just a reminder about how lucky we are in the western world.

Cash position is slightly better this month.  Our worst case projections show us falling down to $5-10k cash on hand — a big plus from the negative projections we had in September.  The next two months also look like we’ll be OK.  We should edge out slightly positive cash flow, keeping us oscillating between $5-90k within a given month.  Scary for sure, but as I said 2 months ago, I’m really not worried.

We hired our first temp to perm person.  Samantha starts Tuesday as a “Director of non-selling activities” — aka someone to help the sales team do data mining and initial emails.  Her annual cost will be something like $45k, which means we’ll need her to produce at least 1 more sale than we would have gotten without her in a given month.

We also decided to scale back new website projects next year.  I have buy in from the whole team, but the question is how far to scale back.  I’m thinking to limit work to only existing clients and to take on projects that fit a very specific mold.

The worst part about a web design project is “finalization.”  We’ve spent years trying to refine our process to get the customer to look at and approve concepts before we begin development.  100% of the time there are changes at the end, that we simply have to make.  It’s forced us to think long an hard about dropping a major business unit.

We’ve surely gotten a lot better, by pointing to live examples of work we’ve built, it’s helped us a lot in terms of getting fewer change requests at later stages.  We are also going to start sending out a “Next Steps / Responsibilities” checklist at the end of each phase.  (E.g. end of wireframes we’ll specify no more changes to layout and discuss our next steps in terms of content migration).  Time will tell if that strategy works.

In the meantime though, the winds have been blowing further and further away from custom websites and towards promoting and pushing our product lines.  With our current staff, we have the following on websites:
70% Zack
100% Sarah
40% Me
10% Tim

Zack can easily sub in for anything, so my bigger concern was Sarah.  If we kill off websites, what role will Sarah play?  How can I make her feel like she is not unwanted.

To begin the conversation, I asked her if she felt she is learning anything new as she builds websites, in other wards “do you feel you have peaked?”  This was a great opening to a 45 minute conversation on the future of the company.  It seems like she buys into the idea of diminishing websites in favor of products.

First problem solved: Buy-in.

Second problem, what should she do?  This will be a question I wrestle with throughout.  Because of her performance really the entire first 15 months on the job, it will be hard to trust her in a position of flexibility.  I feel her position needs to have some ability to directly be measured and also needs to solve an immediate need.   I’m sure we’ll figure something out, but it seems like sales or support will be the way to go for the next year.