Why the Australian CEO of a San Francisco startup hub just fired his entire team, including himself

Image: StartupHouse.

Sometimes the best way to fix an issue is to start afresh.

That’s what the Australian founder and CEO of StartupHouse Elias Bizannes decided when he fired himself and all four full-time employees at the San Francisco-based incubator and co-working space.

“We were having issues with the business, multiple issues, one of them was the team,” he told Business Insider.

“There were issues around performance and motivation” and the team “blew up” over a client matter. Bizannes was struggling to get them back on track.

He was on on holidays when his sister suggested he fire the entire team and start again. When he returned from his break in July he acted, seeing it as an opportunity to “reset” the entire business. The team gathered to hear the news.

“There were some unhappy people in the room and there was a lot of emotion,” he said. “It was a weird meeting because there was the feeling of being fired, but there was a sense of hope because there was an opportunity to reset.”

One major change was earmarking COO Karolis Karalevicius to take over as CEO, and then he would decide who was rehired.

“Despite everyone telling me I was crazy, it was probably one of the best things I’ve done for the business because every single person in the team is re-energised and nearly everyone is going to be basically rehired and in the cases that they’re not going to be rehired it was actually more of a personal choice,” Bizannes said.

One of the problems, he said was that complacency crept in and despite being profitable and the model working, it was time to reassess the vision. Losing your job turned out to be a great motivator.

“It’s created a fresh energy in the team and it’s also allowed us to rethink what the roles in the team should be.”

But with the likes of Angel List CEO and founder Naval Ravikant and 500 Startups founder Dave McClure on the list of investors who’ve tipped in about $500,000, revealing what he’d done was daunting, yet simple.

“I thought it was important that I tell them, so I dropped them an email with a subject line that said ‘I just fired my entire team’. I got immediate responses from every single investor – they were all supportive and open to bouncing around ideas. Everyone was surprised,” Bizannes said.

“Even though they weren’t expecting this, they do support me in my decision and they appreciate me trusting my gut.”

So with a clean slate, Bizannes took on the role of executive chairman. His new focus is the future of StartupHouse and how it can be expanded beyond a single building real estate play.

“What I actually realised was it was not actually the fault of my team… it was my fault for expecting them being able to do it when they had so much of a workload,” Bizannes said.

“I’m actually going to be able to be an entrepreneur in the business again, rather than being a manager. The business needs an entrepreneur to rethink the growth.”

Bizannes envisages a number of locations in San Francisco to begin with. The idea behind StartupHouse is to reduce the living costs of entrepreneurs and help them get off the ground. Its focus is on early stage – pre-funding or pre series A – startups.

Currently it has 100 paying members on various monthly plans and Bizannes is looking at providing accommodation, incubation or foundry mentorship programs and expanding the events program.

Many startups end up there after competing in one of the international StartupBus competitions, also founded by Bizannes. Bridgefy, a messaging app that works without Internet or SMS, was runner up at last year’s North American tour and incubated at StartupHouse. It launched recently with 11,000 users and just won the global Twitter hatch competition, scoring $25,000.

Bizannes maintains StartupHouse is not pivoting, it’s just trying to become better at what it does: build startups.

“What I did was basically try and take my ego out of it. By restructuring it, which also hurts my personal interests because I’m not controlling the business now I’m not in the CEO role, it’s actually allowing the business to be more successful,” he said.

“That’s a really hard thing to do because as a founder, you actually want to stay in control.

“We’re at the transition now where we’re no longer a startup… we’re now a growth business.”

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