Building a company is hard. And achieving success is even harder. So it’s no surprise that a lot has been written about the decision to start a company and how to run it. But what about when it’s time to leave?
I spent five years as Co-Founder and CEO at my company, Radix Health, and two years ago we merged with a larger, private-equity backed competitor. I recently made the decision to leave the combined company and the decision was not an easy one. I came up with a framework to think through the decision and want to share that to help other entrepreneurs as they struggle with this question.
Ultimately it comes down to two intersecting questions: What’s best for you? And what’s best for the company?
What’s Best for You
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Check Your Energy Account: Radix was actually my third startup. The first two were side hustles, and they showed. One survived long enough to make a modest exit; the other was a total failure. Both ventures suffered from a lack of focus. With Radix, I was determined to fix that. And did I! I’ve never been so narrowly focused in my life. I missed kids’ birthdays, school events and anniversaries. This came to a head in the months leading up to our merger. I spent countless hours pulling together our story and negotiating a deal. But the intensity of my focus was unsustainable. If you fail to check and replenish your energy account, you’re less likely to be successful – and you’ll almost certainly won’t be happy.
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Find the Stage That You Love: Beyond purpose is a key question: What kind of work do you like to do? Growing our business from zero to more than 100 people, the demands on me quickly evolved. In the first stage, I was doing everything, from marketing copy to product design to sales. In the second stage, I was a player coach. We had a small team and I sometimes needed to step in at a moment’s notice. Whether it was a difficult client conversation or copy that needed refinement, I did the heavy lifting. In the third stage, I was the coach. I had to go from doing to empowering the team, from how to who. Understanding exactly what phase you love will help you think about what’s the best place for you.
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What Will the Learning Curve Look Like? Early on, there was something new and exciting each day. I remember one long day where I went from a sales presentation, to lunch with a key customer, to helping out at a go-live, and wrapped up the day thinking through how to structure our sales team. Contrast that with life post-merger. We had nearly 300 employees and an incredible leadership team. While still growing relatively quickly, the combination of the organization’s maturity and size meant that we were more deliberative and hierarchical. The reality is there’s always something to learn. The question is are you learning what you want?
What’s Best for the Company?
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Leave Before It’s Too Late: Given my long hours and commitment to the business, I often became the easy button. This, of course, can be disempowering to the team and create a vicious cycle. When the founder is solving all the problems, what role is there for anyone else? Founder’s syndrome, once an organization catches it, is hard to shake; the solution is the founder’s exit. As a founder, it’s your job to develop systems that make the founder role obsolete. If you can’t imagine that, it might be time to leave the party.
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Can You Still Help? In the early days, decision-making is fast and it’s clear where the buck stops. As you scale, and especially after a transaction, your ability to support your team naturally diminishes. Recently a founder told me that a challenging customer issue was the last straw. The client, a large healthcare organization, had revenue challenges due to Covid and wanted to terminate the contract to save money. The account manager asked the founders if they could waive fees to keep the customer. The founders agreed, but they were overruled by the board. The founders felt like they’d lost the ability to support their team.
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Are You What the Organization Needs? Organizations need different things at each stage. So founders need to ask: Do I offer what the organization needs now? After we completed our merger, for example, we needed a leader who could pull together disparate cultures and systems and had experience leading and scaling much larger businesses. Those skills are learned over time and not ones that I had. Bringing in someone else with those experiences was the right decision.
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Make Sure There Is a Clear Path Forward: For me, that path forward had three requirements. First, we needed a transition plan. Second, I needed a firm grasp of all the major strategic decisions ahead. The goal wasn’t to make the decisions, but to clarify what they are and what the plan is to tackle them. Third, I had to be confident in the team I would be leaving behind. Unless your organization needs a turnaround, it’s not time to leave until you’ve checked all these boxes.
Putting It All Together
There’s no formula for deciding when to leave a company you started. Choosing whether to stay or go is deeply personal, and my decision to leave was difficult. But it had become clear that I needed a break, had less to contribute as our organization continued to grow, felt less drawn to scaling the business than starting one, and was comfortable with the path forward. If you take the time to understand what’s best for you, what’s best for your team, and where those things intersect, you’ll make a decision that you’ll be happy with.
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About the author: Arun Mohan, MD was most recently President at Relatient, which he joined through its acquisition of Radix Health where he was Co-Founder and CEO. A serial entrepreneur, Arun currently serves on the boards of several VC and PE-backed healthcare companies and is an active Angel investor.
