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I've been working with founders for years now, and there's one conversation that comes up more than any other. It's also the one that founders dread most.
Your first marketing hire was brilliant. They built your brand from scratch, crafted your messaging, and drove those early wins that got you to Series A. You promoted them to Head of Marketing, then CMO. They've been with you since day one.
Now you're scaling rapidly. Your board is asking tough questions about growth metrics. Your CMO is struggling with strategic initiatives they've never tackled before. The person who excelled at scrappy, early-stage marketing is drowning in the complexities of a scaling business.
Ring any bells?
The founding team reality
I've watched this play out dozens of times. Early employees are startup heroes. They take risks, work for equity, and build something from nothing alongside founders. The natural instinct – and it's a good one – is to reward that loyalty with promotions and increased responsibility.
But here's the thing: being brilliant at the early stage doesn't automatically qualify someone for senior leadership as the business evolves.
Your first sales hire might be exceptional at closing deals but lack the strategic experience to build a scalable sales organisation. Your founding engineer could be a coding wizard but struggle with the leadership demands of a 20-person tech team.
The skills that make someone perfect for a startup's first year rarely align with what's needed in year three, four, or five. I've learned this the hard way, both in my own ventures and watching others navigate it.
When loyalty meets business reality
This creates one of the most emotionally challenging decisions founders face: choosing between loyalty and what's best for the business.
I get it. These people believed in the vision when no one else would. They worked nights and weekends. They took below-market salaries and bet on your equity. They deserve to grow with the company.
But investors didn't back your startup for its heartwarming origin story. They backed it for returns. And those returns depend on having the right people in the right roles at the right time.
The reality? Your early marketing hire might be brilliant as a Marketing Manager, but lack the strategic depth to be a CMO at a scaling company. Your founding salesperson could be perfect for closing deals but not for building the systems and processes needed to manage a sales team.
The experience gap
As startups scale, the challenges become exponentially more complex. I see founders underestimate this transition every time.
- Strategic thinking: Early-stage execution gives way to long-term planning and resource allocation decisions that require experience most founding team members simply don't have.
- Team building: Managing two people is different from managing 20. Building scalable processes, hiring strategies, and organisational structures requires expertise that comes from doing it before.
- Cross-functional collaboration: Senior leaders need to work seamlessly with other departments, understand how their function fits into the broader business strategy, and communicate effectively with boards and investors.
- Market sophistication: What worked to acquire your first 100 customers probably won't work for your next 10,000. Scaling requires understanding of advanced marketing channels, enterprise sales processes, and sophisticated customer success strategies.
These aren't skills you can learn on the job when investors are breathing down your neck.
A path that works for everyone
The solution isn't necessarily to fire your loyal early employees. I've seen founders try this, and it rarely ends well.
But it might mean bringing in experienced leadership above them, or alongside them in a fractional capacity.
Here's what I've seen work:
Promote to their level of competence: Your first marketing hire might become an exceptional Marketing Manager or Director, working under an experienced CMO.
Bring in fractional expertise: A fractional CMO can provide strategic oversight while your internal team handles execution. Everyone wins: your loyal employee keeps growing, and your business gets the leadership it needs.
Create learning opportunities: Pair early employees with experienced leaders who can mentor them. Today's Marketing Manager could become tomorrow's CMO – with the right guidance.
The conversation you're avoiding
These conversations are never easy. I've had to have them myself, and I've coached dozens of founders through them.
But frame it as an investment in both the business and the individual. Most early employees want to learn and grow – they just need the right environment and mentorship to do it.
The alternative – keeping someone in a role they're not equipped for – helps no one. It stunts their growth, hurts the business, and often leads to them leaving anyway, feeling frustrated and unsuccessful.
Building for tomorrow
The best founding teams understand that evolution is inevitable. The scrappy startup that got you to Series A needs to transform into a sophisticated scaling machine. That requires bringing in people who've navigated this transformation before.
Your early employees can absolutely be part of that journey. But loyalty alone shouldn't determine who sits in your C-suite.
The companies that thrive are those that make the hard decisions early, bringing in the right expertise at the right time. Sometimes that expertise comes in the form of a fractional leader who can bridge the gap between where you are and where you need to be.
Because at the end of the day, the most loyal thing you can do for your founding team is to set the business up for success.
Shepherd: fractional leadership for scaling startups
Need experienced leadership without the full-time commitment? At Shepherd we connect growing businesses with vetted fractional leaders who've built and scaled teams at successful tech companies.
If you're ready to grow, we're ready to help.
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