Holding Onto People Too Long Is a Founder's Most Expensive Mistake

The Mistake

Every founder has held onto someone too long. You know it's not working. The performance isn't there. But you hired them, you believe in the turnaround, and you keep waiting for the corner that never comes.

Vineet Jain has built two companies, scaled Egnyte to 1,400 employees and $300M+ ARR, and says this is still his biggest recurring mistake. At a Kleiner Perkins CEO event at Pebble Beach, the speaker asked 200 CEOs in the room: how many of you think you should have fired someone sooner than you actually did? Every single hand went up. Not most. All of them.

The cost isn't just the salary. It's the decisions that person isn't making, the team they're slowing down, and the better hire you're delaying because the seat is filled.

Why Founders Make It

Three forces keep you holding on.

You fall in love with your own decision. You ran 7 interviews, did back-channel references, and chose this person. Admitting it's not working feels like admitting you were wrong. Vineet compares it to holding a losing stock: "Even if you can see the stock is going down, you hold onto it."

You believe in the turnaround story. Every underperformer has a reason things haven't clicked yet. New market, bad timing, wrong quarter. There's always a plausible explanation for why next quarter will be different.

You confuse speed with being mercenary. Founders worry about reputation. If you let someone go after 4 months, will the rest of the team think nobody's safe? So you wait another quarter, then another, watching the problem compound.

How Vineet Lost Momentum

Vineet doesn't name specific people, but he's transparent about the pattern across 18 years of running Egnyte.

"Nobody thinks they're hiring a loser, and yet some people don't work out." Even with rigorous hiring (7 interviews, back-channel references, formal references), a meaningful percentage of hires don't work out. And each time, the instinct was to give it more time.

The real cost shows up in scaling. At 20 people, one wrong hire slows down a team. At 200, a wrong leader slows down a department. At 1,400, the wrong VP can misalign an entire function for quarters.

It took Vineet years to learn to "become more dispassionate about cutting my losses." He's gotten better but still admits it's imperfect: "I can't tell you it's a completely foolproof process. You still make mistakes." The turning point was accepting that the cost of acting too slowly always exceeds the cost of acting too quickly. Both carry risk. But only one compounds.

The Fix (If You're Making It Now)

1. Set a clear ramp timeline before day one. Vineet's benchmark: depending on the role, a new hire needs a couple of quarters to get their toes wet and 9 months to a year to truly get their sea legs. Define what success looks like in measurable terms before they start. If you can't define it, you won't be able to evaluate it.

1. Separate the decision from the emotion. You're not evaluating whether this person is good. You're evaluating whether this person in this role at this stage is producing results. Strip out the guilt and the hope. Look at the output.

1. Act on the pattern, not the explanation. If you've had the same concern for two consecutive quarters, the pattern is the data. The explanations are noise.

The Signal to Watch

Ask yourself every month about every leader on your team: if this role were open today, would I hire this person again?

If the answer is "no" two months in a row, you're holding on too long. The 200 CEOs at Pebble Beach already learned this the hard way.