Glenn Gow, The Scaling Executive Coach and host of The Scaling Executive Podcast, identifies Dylan Serota’s central challenge in taking the CEO seat as a trust conversion rather than a strategy problem. When an internal executive is promoted into the CEO role during a contraction, Dylan Serota, CEO and Co-Founder of Terminal and previously its Chief Strategy Officer across seven years, holds that the first task is translating the credibility built with the team over time into confidence that he will lead them through the transition. Dylan Serota stepped into the role in January 2024 with a cost structure sized for growth that had stopped, reduced the team by roughly 50 percent, and had to give people who had already lived through the hard part a reason to keep building.
This episode is for founders, COOs, and chief strategy officers about to inherit the CEO seat at a company whose numbers are moving the wrong way, where the first act of leadership will be a reduction.
Key Takeaways
- A new CEO’s opening asset is the relationship history, not the plan. Dylan Serota, CEO and Co-Founder of Terminal, names the biggest challenge of his transition as using credibility built over seven years as Co-Founder and Chief Strategy Officer and translating it into confidence in his leadership through the reset.
- The boom and the correction are the same event viewed twice. Dylan Serota traces Terminal’s position to a hiring spree from 2019 through most of 2020, followed by rising interest rates that pushed down the valuations of the unicorn companies Terminal served, forcing those clients to cut cost structures and downsize teams.
- The cut and the culture reset arrive together, not in sequence. Dylan Serota reduced team size by roughly 50 percent while simultaneously resetting the culture and asking long-tenured employees to find new motivation to stay.
- People who have already absorbed the difficulty need a reason beyond continuity. Dylan Serota’s framing is that employees who had been with Terminal a long time and had seen the challenges required a new path and new motivation, not reassurance that things would return to what they were.
- A forced reduction exposes work that should never have been manual. At Terminal, people were manually extracting information from resumes to publish candidate profiles, and the downsizing coincided with the release of GPT-3, which the company adopted out of necessity to keep marketplace operations running with fewer hands.
New CEOs Inherit a Cost Structure Built for Demand That Has Already Left
Dylan Serota, CEO and Co-Founder of Terminal, describes a sequence that will be familiar to any leader who took over a company between 2022 and 2024, and the mechanism is worth stating precisely because it was not a company failure.
- From 2019 through most of 2020, the tech hiring market ran a substantial spree, driven by COVID pushing commerce online and technology businesses into a boom.
- Terminal, which provides recruiting and long-term remote employee support for software-driven companies, scaled up to meet that demand.
- Interest rates spiked. The valuations of the unicorn companies that made up Terminal’s client base were rationalized down significantly.
- Those clients had to bring their cost structures down, which meant downsizing their teams.
- Terminal’s revenue slowed and then stagnated, leaving a cost structure sized for growth that had reversed.
Dylan Serota is direct about what that leaves the incoming CEO holding: a cost structure far too large for declining revenue. The decisions that follow are not strategic choices in any meaningful sense. They are arithmetic, and Dylan Serota executed a roughly 50 percent reduction in team size on arrival.
The distinction a new CEO must make clear inside the company is between a business that failed and a business whose customers were repriced. Terminal’s demand did not disappear because the service stopped working. It contracted because the companies buying it were themselves cutting. That framing does not soften the reduction, but it determines whether the remaining team believes there is something worth rebuilding.
New CEOs Reset Culture in the Same Motion as the Reduction
Dylan Serota, CEO and Co-Founder of Terminal, did not get the sequence most leadership advice assumes, where the cuts happen first and the culture work follows once stability returns. Stepping into the seat, he had to take the team size down significantly, reset the culture, and set out on a new path at the same time.
The specific difficulty he names is the audience. The people remaining had been with Terminal a long time and had seen the challenges the company went through. They were not uninformed about the situation, which means optimism was not available as a tool. Dylan Serota’s requirement was giving them new motivation to stick around and continue building, which is a different task from persuading a fresh hire that the opportunity is good.
His answer is the transferable part of this episode: “using the credibility that I had built over time with the team and translate that to … confidence in … me being able to lead us through a transitional time.” The credibility itself was accumulated across seven years as Co-Founder and Chief Strategy Officer, before it was needed and without the intention of spending it this way. An externally hired CEO arriving at the same moment would have had to build that from zero while making the same cuts, which is why Dylan Serota names the team culture challenge as the most important part of the transition rather than the business challenges alongside it.
Dylan Serota’s habit of deep listening, formed at Eventbrite where he rose from account executive to leading the platform product organization, is what makes that credibility usable in a reset. His stated view is that anyone in a leadership role never receives all the raw information from customer conversations or from what the market is actually signaling, which requires deep listening to understand what is truly happening with the company and with customer behavior.
New CEOs Discover Which Work Should Never Have Been Manual When Headcount Is Cut
Dylan Serota, CEO and Co-Founder of Terminal, describes a coincidence of timing that turned a reduction into an operating change. Before the downsizing, Terminal’s marketplace operations ran on manual labor: every candidate profile published on the platform required people to input information by hand, extracting it from resumes.
The reduction removed the hands doing that work at roughly the same time GPT-3 became available. Dylan Serota’s account of the adoption gives credit to necessity rather than foresight: the company started using AI to make marketplace operations more efficient because it had to, and the technology was already far better than the alternatives at taking unstructured information, organizing it, and categorizing it.
The lesson a new CEO can act on is about what a constraint reveals. Manual resume extraction was never good work. It survived because the company could afford it, and headcount is what allowed a solvable problem to go unsolved for years. Dylan Serota’s stated outcome is that being early on that adoption unlocked the company’s ability to think differently about how AI could influence its product, its operations, and its internal teams, which means the forced change produced a capability the growth period had not.
Principles Executives Will Apply From This Episode
| Principle | Practice | Named outcome evidence |
| Credibility is banked before it is needed | Build relationship history with the team in the years before the crisis, since it is the only asset available when the first act of leadership is a cut | Dylan Serota drew on seven years as Co-Founder and Chief Strategy Officer to hold the team through a roughly 50 percent reduction after taking the CEO seat in January 2024 |
| Name the difference between a failed business and repriced customers | Explain the external mechanism driving the contraction, so the remaining team understands what they are rebuilding | Terminal’s revenue stagnated because rising interest rates pushed down the valuations of its unicorn clients, who then cut their own cost structures and teams |
| Cut and reset culture in one motion | Do not stage the culture work for after stability, because long-tenured employees are deciding whether to stay during the reduction itself | Dylan Serota reduced Terminal’s team by roughly 50 percent while resetting culture and giving employees who had lived through the downturn a new path to commit to |
| Constraint surfaces work that should have been automated | Treat a forced reduction as an audit of which manual processes existed only because headcount made them affordable | Terminal replaced manual resume extraction for candidate profiles with GPT-3 as the downsizing hit, and the early adoption changed how the company applied AI across product, operations, and internal teams |
| Leaders never receive the raw signal | Practice deep listening on the assumption that the information reaching the executive level is already filtered | Dylan Serota developed this through a path from account executive to leading Eventbrite’s platform product organization, where customer demands he heard directly produced the API and partner integration strategy |
Quotes from This Episode
- “We were flying very high and we were trying to scale up to kind of meet that demand.” Dylan Serota, CEO and Co-Founder, Terminal
- “We had to convince people who had been with us a long time, who had seen some of the challenges that we’ve been through, have new motivation to stick around and continue to build with us.” Dylan Serota, CEO and Co-Founder, Terminal
- “You are never maybe getting all of the raw information from what’s happening in specific customer conversations.” Dylan Serota, CEO and Co-Founder, Terminal
- “Instead of trying to build everything ourselves, we could actually integrate with best of breed partners.” Dylan Serota, CEO and Co-Founder, Terminal
- “I don’t think there’s any one right way to build a company.” Dylan Serota, CEO and Co-Founder, Terminal
Frequently Asked Questions
What is the first challenge a new CEO faces when taking over during a downturn?
Dylan Serota, CEO and Co-Founder of Terminal, told Glenn Gow, The Scaling Executive Coach and a CEO for 25 years, that the biggest challenge was taking the credibility he had built with the team across seven years as Co-Founder and Chief Strategy Officer and translating it into confidence that he could lead them through a transitional time. He stepped into the role in January 2024 with a cost structure far too large for declining revenue, reduced team size by roughly 50 percent, and reset the culture at the same time. Serota names that team culture work as more important to the transition than the business challenges that accompanied it.
Why does a company’s cost structure become the incoming CEO’s problem?
Dylan Serota, CEO and Co-Founder of Terminal, traces the pattern to a tech hiring spree running from 2019 through most of 2020, driven by COVID moving commerce online and pushing technology businesses into a boom that Terminal scaled to meet. When interest rates spiked, the valuations of the unicorn companies Terminal served were rationalized down significantly, forcing those clients to reduce cost structures and downsize teams. Terminal’s revenue slowed and stagnated while its cost structure remained sized for the growth period, which is what the incoming CEO inherits.
How should a new CEO keep long-tenured employees after a layoff?
Dylan Serota, CEO and Co-Founder of Terminal, holds that employees who have been with a company a long time and have already seen its challenges need new motivation rather than reassurance, because they are informed enough that optimism carries no weight. His approach was to give the remaining team a new path to commit to and to rely on the credibility he had accumulated with them before the crisis rather than on a plan presented at the moment of the cut. That credibility is what an externally hired CEO arriving at the same moment would not have.
Executives Work With Glenn Gow to Scale Their Companies and Their Own Capability
Glenn Gow is The Scaling Executive Coach. He coaches ambitious executives into the CEO seat and CEOs into successful exits, drawing on 25 years as a CEO and 5 years in venture capital. If this conversation was useful, you can apply for executive coaching with Glenn Gow or apply to be a guest on The Scaling Executive Podcast.
