You're missing a whole lot of risk here, and for only a small gain.

You may not be able to guarantee that the new person can do it. This isn't a given, otherwise we would have all figured out how to hire the right devs for any given product and team.

There's a ramp up time to learning the product (and codebase, if it's software). If an emergency happens, only the new person will be fixing it and they will lack a lot of knowledge to fix it quickly or effectively.

Did the maintainer have any customer relations like customer feedback, including what works and doesn't in the product and what features they would like to see? Those have just been forfeited as well. Same for intra-company relationships.

The person you just fired could also go help make a competing product (legally or not), since they're the best person to do so. Chasing this down would require legal resources, which requires further expenses.

Sounds like a whole lot of extra potential complications for a measly +$300k.

This is a very employee centric view.

In reality, if you are depending on one employee to make your business that is a huge risk.

That employee needs to document and transfer his knowledge and relationships out to the company at large. You must raise the bus factor.

> In reality, if you are depending on one employee to make your business that is a huge risk.

This is extremely common in many/most SMBs.

> That employee needs to document and transfer his knowledge and relationships out to the company at large.

Most employees who are rainmakers/linchpins like this are also aware that they are rainmakers/linchpins.

First, knowledge documentation and transfer in reality is hard. Very few people read docs, even when they are told to and those docs are critical to their job and the business as a whole. If you do it face-to-face, it’s almost always the case that the person learning politely listens and is already making a mental list of changes (often catastrophic) that they are going to make.

Second, relationships are extremely valuable, and anyone who has them pretty much knows this. Why would they give this up freely? Oh, you will fire them? I guess the company’s competitor would love to have your rainmaker and all of his/her contacts.

In all of the sustainable and stable businesses I have seen, these rainmakers/linchpins get paid outsized amounts of money due to the processes and connections that they have and have made. Imho, they deserve it.

The company has to have a BATNA in the event that the employee demands something outrageous, but usually the best course of action is to reward them generously for sustained profitable performance. If you are lucky and skilled as an executive/manager, some of these superstars will be happy with a slightly smaller (but still relatively large) income in order to work in what is hopefully a healthy work environment.

If I owned this business, I would throw money at this employee and try and convince them to bring their peers onboard as well.

Firing/antagonizing them makes no sense.

What is an employee’s incentive for raising the bus factor? Outside the ability to have a real vacation?

Stock. Or, other skin in the game.

It would definitely be a good move to pay for additional hires at less than $500k unless they are writing their own $10m products; no disagreement there.

Congratulations. You've just lost an employee that created a $10m/year system from scratch.

on the other hand, if you lack the foresight to know putting your company in a position to be held ransom by a single employee is a bad idea then you deserve to go out of business.

You were relying on the output of one person and that person leaving caused you to close that office. You were already in that boat.

By your logic having someone 2x as sucessful at sales is risky and you should let that person go.

True. Seems like the smart thing to do would be to "buy" the software from the employee, pay them a trivial sum in addition to their salary to train 2-3 other people to understand the software back and forwards, inside and out. That way you now have 3 people who can run the software. You made us $10m in repeating annual revenue, here's a one-time $20,000 bonus for your services (and a trophy, sure, why not?)

Builds good will, makes people happy, and secures your ownership of a product that has added tremendous value to your company. That's a win all around.

> train 2-3 other people to understand the software back and forwards, inside and out

I think you grossly underestimate how hard it is to find one person, much less two or three people, who can and will actually do this task diligently.

Your best hope is that the PM gets bored and wants to move on, and you let them hand pick their successor(s).

Why is it hard to find even 1 person?

> Why is it hard to find even 1 person?

I’m going to paste from another reply I made in this thread:

“Knowledge documentation and transfer in reality is hard. Very few people read docs, even when they are told to and those docs are critical to their job and the business as a whole. If you do it face-to-face, it’s almost always the case that the person learning politely listens and is already making a mental list of changes (often catastrophic) that they are going to make.”

I will add that hiring competent people is hard if the company is focused on keeping compensation relatively low (as in this example) rather than rewarding their champions.

I realize that as an org gets larger, pay bands have to be a thing because mediocre-but-functional people (i.e., most “good” employees) get butthurt when a champion makes more than they do. That said, I think that many SMBs can have substantial salary variation within the employees, have those variations be reasonable, and frame it in a way that makes sense to everyone involved. That said, many chose not to do so.

Hopefully that included some documentation?

Good business… ceteribus paribus. Which is to say, rarely if ever at all.