Sales

Why this entrepreneur let go of his sales team – even though they hit targets

Pivots are necessary in business and sometimes that means letting valued team members go. Before this becomes a problem, invest in your culture and honesty with employees. If the time comes where they have to leave, at least you have the chance of leaving as friends

“When you’re letting go of an employee, you never want it to come as a surprise to them,” Josh Walters. “Or else you didn’t do your job as a manager well enough.”

As founder of Toronto-based food ordering startup Feedback App, Walters found himself in the middle of a strategic pivot that meant he needed to let go of the two sales people out of his eight total employees. The only problem: they were hitting their targets and were valued members of the team.

Speaking to PulseBlueprint, Walters shared the exact process he used to let people go and why he still feels it was the right call despite the pain it caused.

It all started with a student and a pizza

“I was travelling with some friends and we went for late night pizza – the restaurant owner offered us all the pizza he had left at a fraction of the normal price,” Walters said as he recounted Feedback’s founding story. “It got me thinking there was an opportunity to use technology to connect people like me, who were happy to pick up surplus food, with the restaurant owner. Both parties benefit.”

After getting the initial spark, Walters and his co-founder cousin:

  1. Conducted market research to see if any app existed tackling food waste (very few in the way they had planned for Feedback)
  2. Talked to restaurant owners to to see if they actually cared about this problem (they very much did).
  3. Then they found an outsourced tech team in Ukraine via a recommendation from someone they met at a meetup, and got the minimum viable product for Feedback built.

All the while Walters continued “knocking on doors” of restaurant owners to get them to sign up to the platform.

From students to professionals

Once app development started, Walters needed to find buyers. He figured students would love low prices, so he went to campuses.

“We invested in a tent at some frosh events and handed out coupons for $5 off their first order in exchange for emails,” he said. “We build a list of around 800 students over the course of a week.”

Despite email reminders to students after the app launch, the initiative was a dud: students may have liked cheap food but they didn’t eat out often enough to make a marketplace app like Feedback work.

“Transparency was always one of our strongest values”

Josh Walters

So the company pivoted to professionals who were socially conscious but had more disposable income. This move put them in direct competition with big players in the Toronto food delivery and pickup scene like Ritual, Skip the Dishes, Foodora, and Uber Eats, but the app continued to grow.

“We wouldn’t have anything to sell for 6 months”

Through talking to customers, Walters and the growing Feedback team realized the company needed to pivot again. Their app, while revenue generating and growing, would see linear growth at best. Geographic growth would take a lot of resources and time that Walters didn’t have to spend. And, given the competitiveness of the space, every customer would be expensively won but easily lost.

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While the market got more competitive, Walters tried to build Feedback’s competitive advantage: its culture.

“For us, transparency was always one of our strongest values,” he said.

For Feedback, transparency meant all-hands meetings and sharing the good and the bad with employees. But in the increasingly saturated market brought both trouble and an opportunity for the fledgling startup. With more restaurants moving to digital sales via apps and their own channels, Walters’ original vision of helping companies sell food at the end of the day evolved into using technology to help companies dynamically price food throughout the day, extending a trend that hit hotels and flights a decade earlier.

With the struggle came the idea for Gravy, a dynamic pricing application for restaurants, and the co-founders met with their advisors to discuss the two opportunities.

“We went around the room looking at the two business models [Feedback and Gravy] and the projections for both of them,” he said. “And we had this awful feeling before anyone said anything – oh my god, this means we will have to change the team. We knew we wouldn’t even have a product to sell for the next 6 months and we needed to beef up the development team to get this product out as soon as possible.”

The all-hands meetings took a different tone after that round of meetings.

“The month leading up to taking the leap in the new direction, we had been discussing the strategic shift quite openly with the team,” he said. “Everyone was on the same page and agreed moving towards the software side of things made the most sense.”

Josh Walters, Co-Founder, Feedback App

When Walters ultimately let his two sales people go – he said they had an inkling something was up but didn’t officially know until the day of – he expressed relief that he talked about company pivots during all-hands meetings since, at least then, people knew why things were changing.

“We explained to them that, with the new direction of the company, there wasn’t a role for them because of the resource limitations we had as a startup,” Walters said. “After that, we explained to them that the reason for this decision had nothing to do with them personally. Then we spoke about giving them awesome references, asking if they needed any sort of introductions or other personal favors to help them land on their feet.”

Both employees left on amicable terms, said Walters, and the company moved forward. The rest of the team, while sad for the loss of their coworkers and friends, understood the necessity from a business perspective. Now, with new team members on board and a few months passing, the Feedback team is ready to make Gravy.

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