Editor’s note: James Altucher is an investor, programmer, author, and entrepreneur. He has started and sold several companies, run a VC fund, and is an active investor in many private companies. His latest books are I Was Blind But Now I See and 40 Alternatives to College. You can follow him on Twitter @jaltucher.
Wade had sex with Karen and now I had to fire him. She was our top designer. And he was also starting to make fun of one of my partners behind his back. He’d do that roll-the-eyes thing whenever my partner spoke.
Wade had caught the disease. The disease is very contagious and it spreads to the other employees quickly and it contaminates everyone’s work. Like a tumor you have to cut it out as soon as it appears. Wade was fired.
The disease spreads in stairwells. The archaelogical digs of startups are found by deciphering the cigarette butts and condoms flung down the stairwells. The employees talk to each other there. They talk about you. And they don’t say very nice things. Put a microphone there. And while you are at it put a microphone in the elevator. It can’t hurt.
When I was a kid one of my friends told me he got a blowjob every weekend in the stairwell at Quakerbridge Mall near the movie theater. I had acne, bad hair, cysts, braces, glasses, and bad clothes.
L. was crying when she called me and asked me to meet her at the cafe across the street from work. I said, “what’s wrong?” She said, “just meet me at the cafe.”
She was a project manager working at my first company. The cafe was the Abracadabra cafe and for some reason they served coffee and donuts in a magic store. The best magic store in the city. Where David Blaine supposedly learned his stuff and everyone made fun of him behind his back. Like people do.
L. was still crying. She had heard one of my partners call her ugly and stupid when he thought she wasn’t listening. She didn’t know what to do. “I had been so happy at work until this moment,” she said.
One word can destroy people. It’s so easy. The magic word.
We want to be loved and when it’s not returned by those in authority we just feel horrible. There was nothing I could tell L. other than that I valued what she did. She was in charge of about one-third of our business. I wanted her to be happy. Every word is important. We sat there until she stopped crying.
Ten years later, almost to the day, I took my daughter Mollie to the same store. The man behind the counter sold us six different magic tricks. Mollie couldn’t figure any of the tricks out. Like the pencil that pokes a hole in the paper and then you can move the pencil around without creating a rip. We took them back to the Chelsea Hotel where I was staying and all night we practiced them. The next day Mollie went home and I was lonely again.
In 2001, I was running a $125 million VC fund with three other guys and about five or six employees. We occasionally co-invested with Yasser Arafat. I had the passwords of all the other partners and would regularly read their emails. Am I past the statute of limitations on this one? They didn’t like me and, to top it off, I was paranoid and sick.
One time Mark emailed to Alex, “you better get your partner in line.” Alex took me to dinner that night. Vietnamese. And he told me I had to contribute more to finding deals. It was mid-2001, the Internet had crashed and our firm was going down the drain. I honestly had no clue what to do. And nobody knew it yet but I was broke and was being forced to sell my house.
On weekends I would meditate with a group of people. We would sit all day and it was supposed to calm the mind. My legs hurt being in the lotus position for so long. The lotus position is not a relaxing position. It’s not supposed to be relaxing. It cuts off circulation to your legs and then after about a half hour it becomes excruciatingly painful.
One time after an hour-long sitting, the bell rang and we all got up to do a walking meditation. My legs were numb and asleep and as soon as I got up I fell over onto the ground and was in agony as the blood slowly came back into my legs. Everyone had to continue their walking meditation while I was frozen on the floor in pain and embarassment. I was losing my job, my money, my house, and I was on the floor numb. Everyone stepped over me silently, their hands clasped in front of them, heads down, doing their walking meditation while their minds continued to settle.
O. wanted to start his own business but still wanted to work for me. So I moved him to half time and gave him the same pay and introduced him to his first clients so he could start his business. But we were getting more and more work and we were opening multiple businesses, so O. was soon doing more work for me than just half time. One time one of my main investors asked me to do a task and I asked O. to do the task. O. replied that it was not important and he would not do it so I ended up doing the task. O had gotten the disease.
I asked O. to take a week or two off and then come back with a clear mind. He wrote back, “the secretary makes more than me. You buy dress shirts for one meeting and then throw them behind your desk where they stink up the office. I not only quit the business but I quit YOU.” He then shut off his phone and blocked me on Facebook and wherever else we were connected.
I’m proud to say we have patched that up and we are now friends.
Here are my rules for employees:
A) Treat them as if they are eventually going to be better than you. You can learn from every one of them before you have to fire them or before they abandon you.
B) Picture that all of them will eventually start their own businesses and you are just training them. This doesn’t mean be nice to them all the time. It means train them to start their own businesses. In my first business a bunch of employees broke free, stole some clients, and started their own business. Now they are doing very well. My partners hated them. I love them. It’s good to have many friends who look back and appreciate what you did for them.
C) If an employee gets the “disease” (all they want is more money and they don’t care about anything else and they start to have an attitude) then instantly fire them. There is no cure for the disease and it’s highly contagious.
D) No employee is allowed to say a bad thing about any client. Everyone has to love the client’s products. No gossip. No jokes. Worst situation: One time we had a proposal to send to the U.S. Post Office. Everyone worked very hard on it and we got it done just in time. The project manager FedExed the proposal to the Post Office. Fed. Ex. He was tired because his wife had just had a baby in the prior month. We had to fire him that very night. Nor did we win the job.
E) No gossip about anyone. I was guilty of this as a VC. I would talk badly ab0ut one of the CEOs we invested in. One of my partners told him everything I said. The CEO eventually went bankrupt anyway but he has since written a novel where I am the evil character. Gossip is a seed that gets twisted into history.
F) I picture every employee calling home at night to their mother. The mother asks, “how was your day at work?” I picture the employee saying, “Mom, it was the best.” I picture the mother crying tears of happiness because the baby that once came out of her is so happy to be working with me. I try to make that happen every day.
G) Teach the employee how to exploit you for their own gains. You certainly exploit them. Not in a bad way. You have to exploit them. You charge more for their services than you pay them and than you pay for all of your fixed expenses. That’s how you get rich so it’s worth it. But ultimately they have to exploit you to feel good about the relationship. When you both die there should be no bad feelings that linger among the maggots you share between your graves.
H) How can they exploit you? By building a rolodex off of yours. By learning your skill set. By learning how you deal with your failures. By learning not to repeat your mistakes. By eventually stealing some of your clients and employees and breaking off to start a business or take a higher position at a competitor. None of these things are bad things. You want them to do this. If you train them how to do this then it all becomes a good thing for you in the long run even though you might not see that. If you act with abundance in these situations then abundance will come to you. Too many bosses act with fear and scarcity and ultimately scarcity will come to them.
I) Teach them how to sell. Even if they are programmers. Programmers are often introverted and think they can’t sell. I’m a programmer. Because of their introversion, programmers are often seen as more trustworthy by the clients. Bring programmers or introverts to your meetings. They listen the best and they are the best sales people but they don’t know it.
J) Surprise them. Employees are like “reverse clients.” You have to please them just like you please a client. It doesn’t cost much to reward an employee who gets a job done. Gift certificates, dinners, get a masseuse to come in every Friday, write employees personal notes about what you liked about their work, and so on. Employees, like clients, are the gift that keep giving. They are all there to make you wealthy so you need to be infinitely grateful to them and, ultimately, help them get wealthy.
I don’t have any employees anymore. I now work with partners on everything I do. I know what things I’m good at and what things I’m bad at. Ultimately I wasn’t very good with employees. I tended to fall in love with a few of them a little too much. And then I would break all my rules and very bad things would happen.