Avoiding The Family Favor Hire; Seinfeld Business Blog

“The Money” was an episode full of business lessons and also gave us exposure to “jimmy legs” – which you can also apparently get in your arms (according to Frank Costanza).  Elaine is riding high at Peterman, swimming in stock options, and smoking big cigars.  At the same time, it appears that Jerry is having money trouble.

Seinfeld logic dictates that this is an opportunity for Elaine to jump in and give Jerry a boost.  Obviously you don’t hire a comedian to write up drivel for a clothing catalog, BUT you could hire his father.  After all, Morty Seinfeld has seen it all in the rain coat business.  Elaine reluctantly agrees to bring Morty on the pay roll and now we have a setting for a Seinfeld lesson for Startups:  Don’t hire family and don’t hire the family of friends.

For Elaine, the outcome was pretty predictable.  Morty was a terrible employee and ended up costing her a rung on the proverbial corporate ladder (and her stock options).  For other start ups that I work with, the outcomes may be a bit less dramatic, but it often ends poorly.

I’m not here to say that there aren’t many examples where family run businesses work out great.  But more times than not, I see an entrepreneur hire his buddy or his brother-in-law as a mutually beneficial act only to see things blow up.  Speaking with Elaine’s wisdom, be careful of why you are hiring.  If you are selling raincoats and Morty just happens to available, ok.  However, if you’re peddling a high end catalog full of sombreros and $200 umbrellas, keep looking.

Dan Beenken is Director of the UNI Small Business Development Center