A Letter from the CEO

Yesterday was a tough day at Payability because we laid off 20% of our team. Here’s why we did it, how we did it, and how we expect to grow after this difficult and very painful decision. 

Everybody at Payability goes to work every day with a single mission in mind; to help eCommerce sellers succeed. That means providing fast and easy access to affordable and flexible financing that is the lifeblood of growth for thousands of eCommerce sellers. But over the past year, global supply chain delays and shipping inflation have combined to create a significant strain on the eCommerce economy. This has had reverberating effects on everyone involved, sellers and solution providers alike. 

Given this market impact, we had to reassess our strategy. We needed to make sure we direct our efforts to where we could have the most impact. So we made the strategic decision to focus on sellers we have the best opportunity to help succeed – those selling between ~$10K and $1MM per month. This decision meant that we needed to retool our operations, which led to yesterday’s reduction in force.

Reduction in force, or RIF, is a sanitized corporate term to describe something extremely disruptive and painful. As such, we didn’t take this decision lightly. We agonized over it, debated it, tried to avoid it, but ultimately did what leaders must do and made the hard decision that was best for the long-term health of our business.

Once the decision was made, we knew we had to pivot to ensure we carried out this decision in a way that is consistent with our core values. Saying goodbye to talented people that we loved working with goes against every instinct of a growth-oriented startup exec. But how you deliver this news to your team matters a lot. In the span of my 30-year career, I have had to deliver a layoff four times. Here are the 7 guiding principles I’ve developed over those experiences.

  1. This may be painful and disruptive for me, but that pales in comparison to the disruption I’m causing for the people I’m letting go. So don’t make this day about me, don’t talk about how hard this was for me, focus on the team and their pain.
  2. The CEO needs to look everyone being let go in the eye and deliver this news as clearly and as compassionately as possible. Hiding behind your management or HR team to deliver this dreaded news creates an insulation around you that will lead to toxic decision-making.
  3. Make sure the team knows this is not their fault or in any way due to their job performance. Every time I’ve been broken up with or fired, I immediately questioned what I did wrong. That’s human nature. The same is true in this context, except that this situation wasn’t the fault of the team being let go, so make sure they know that. Keep repeating that message both to those who stay and especially to those who are leaving.
  4. Take ownership and apologize. Some believe that saying sorry is a sign of weakness, I believe it is a sign of self-awareness. We got here because of decisions I made. Everyone on the team already knows that. Admitting it simply means I’m stating the obvious, and not doing so is a huge credibility loser at a moment like this.
  5. Lead with humanity, and follow that up with compassion. Yes, this is a business decision, but hiding behind that is corporate cowardice. This decision is having a real impact on real people. Own that and do everything possible to meet folks on the emotional level that a decision like this creates.
  6. Be generous with severance and placement resources. Compassion is nice, but cash pays the bills. Be appropriately generous with severance, payout full bonuses for prior periods even if not fully earned, provide placement services, and generally dig deep to ensure you help your former teammates land on their feet. This is important as a good corporate citizen, but it is also a critically important signal to the rest of the team. These are their friends and teammates, so how you treat them reveals your true values.
  7. Focus on the road, not on the ditch. A performance driving instructor once told me that when going fast into a corner, if the driver spends too much time looking at the ditch they are trying to avoid, they will often hit it. Instead, focus on the road. Put your intention on where you want to go, not on what you want to avoid. The same principle applies to startup leadership, especially so after a disruptive event like this.  The remaining team is your road ahead. Focus your intention on them and ensure they have a renewed sense of purpose for what’s ahead.

We are all still grieving for the loss of our prior team’s cohesion and for the disruption I’ve caused to people we care about. Tomorrow we’ll shake the dust off and focus on the road ahead where Payability will be better aligned to provide innovative financing solutions to fast-growing eCommerce sellers. Onward.

Keith Smith
Keith Smith is the Co-founder and CEO of Payability, a FinTech company that provides financing and payment solutions to eCommerce sellers. Its patented technology utilizes machine learning algorithms to underwrite customers based on sales quality and historical eCommerce performance - rather than simply looking at personal credit scores. Previously, Keith founded and ran multiple startups, including; CyberMortgage, Zango, and BigDoor. Keith lends his time to early-stage startups via Techstars and serves as an adviser, investor, and board member for multiple tech startups.

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