How to Treat Your Employees (or anybody else for that matter)

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.

(two employees kissing before they are fired)

(two employees kissing before they are 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.

Fucking stairwells.

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.


Beware of stairwells

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. In general, I try to treat everyone as someone who teaches me. Even people who trash me. Before you get defensive, take a step back and ask, “Maybe what they are saying is true. I am going to listen to them.” No matter what they say.

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. Outside of work, all this means is, help people deliver value to the people around them. The first way to do this is by having a solid foundation of health for yourself. This makes you a beacon they will follow. But eventually they will be beacons as well.

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. Outside of work, if someone pulls away from you, you can’t control them and make them “Love” you again. Pull away from them for awhile and see what happens. Don’t pull towards someone who pulls away.

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 about 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.

  • Thank you so much for the article. It really hit the right spot, just when I needed it. I know this an old post but I just discovered your blogs. I have to say that the things you list apply to relationships outside of work as well. Your point about abundance rings so true. I notice that when my mind starts to have thoughts of scarcity, it generates negative emotions like jealousy, anger, resentment… It gets difficult to remind ones self of the abundance but small things like reading your post gives me the right cues to get “unstuck” When I am reminded of abundance, those negative emotions seem to dissolve and I can feel more generosity in my outlook and thoughts towards others and this brings me happiness.
    Be happy for others
    Be joyous in other’s joys
    Be generous in your spirit, thoughts, words and actions
    Be gracious
    Be grateful
    The universe is listing, right?!

  • Axel Nissim

    I am O right now James… picture that in a moment just before the shit starts falling appart. I do have my own bussiness, but I’m working at someone else’s company part time (someone else who knows a lot more of people in my industry). We both know about this, but we play a rather perverse tug of war about it with my time and money commitments. I do offer him a steep discount on my services, cause I’m not there full time. However, he keeps asking for more. You know… he’s one ex-regional VP from one of the market defining companies, and he knows his shit really well, he knows how to bend people to do exactly what he wants from them… you know that kind of guy… really frickin persuasive and opportunistic. I’m the contrary to that, and I appreciate the difference. I’ve learned a lot. I don’t complain about money right now, and maybe I’d even work full time for this guy, because I believe they’ve struck gold… but then, the thing about money will come later… The reason I put a business in the first place, was to gain independence, to build a money generating machine. The reason I joined this other company part time, was to recover from an ugly indebtment that came when my own company went bust because of a miscalculation. I’ve learned a lot since, I have recovered a bit. My own company seems to be doing well, but still missing 6 months to go back to dreaming. I know I will not personally build independence in this other company I work for part time, because I’m not a partner, just short of it… I have a problem with the Ex-VP… he’s a boss, not a leader… he is a salesguy… but not thinking about actual delivery… and he’s not a people’s carer. So… what do you recommend, besides what I think you will recommend already? lol

    • Axel Nissim

      Let me reply to myself already… : “grow a pair of balls!” Lol

  • Seth Phillips

    why did you fire Wade? “Karen had sex with Wade and now I had to fire her” – why didn’t you say that instead? She was his superior in the company hierarchy? Doesn’t that make her MORE culpable not less… but she was valuable from a profit prospective – so you did what she wanted, for profit – or you like Karen – better than Wade who, suddenly – “had the disease”. You didn’t notice before, maybe you invented it. You chose selfish favoritism – it is just suggestive – but so is the total lack of evidence in the Wade story. Why turn on Wade? You made no case…

  • Darren Hough

    This is old but I wanted to chime in on this….most businesses are focused on one thing – making as much money as possible while providing/doing as little as possible. This is the fundamental tenant of capitalism and the way you make money – reducing expenses and increasing profits. This is lauded in the business world as “ruthless” and “two-fisted”, etc. Yet employees who take this same hardline tactic and attitude are considered to have the “disease”? Make no mistake, I’m at work to make money, if I came down to winning the lottery I most likely wouldn’t be there. Would you? That doesn’t necessarily mean someone’s work isn’t going to be good, they’ll have bad attitude, or be a pain to work with, it just means they realize their main objective – to generate their own profit, just like you. So why is it okay for the business to act one way and expect different things from their employees?

  • Sonia Garces

    This is So cool mostly the part with Mothers, at the end of the day I talk to him on the phone Always,to describe how my day was

  • James, this is the best thing you’ve ever written. Period.