Your startup is taking off and growing fast. So you bring in more people to help you grow. Finding and hiring the best people suddenly becomes one of your most important tasks.

But hiring in a high-growth environment is a balancing act. Not hiring fast enough to keep up with your startup’s growth can cause your business to stall. But hiring too fast, without a clear game plan, can hurt, even derail, your business.

This is a lesson that many entrepreneurs learn the hard way, especially in the tech startup world where competition sometimes leads to reckless expansion.

Focusing too much on speed causes many startups to stumble. They grow too fast and hire too quickly, only to find out that they’ve overreached, that their business growth was not going to be as strong as they expected.

So they end up taking the step that most businesses and employers dread: layoffs.

Layoffs are a fact of life at established companies, especially big corporations. But for startups, sudden and drastic cuts in a workforce can have serious repercussions for a young company that’s still trying to get established.

In some cases, layoffs can be disastrous.

I understood this even before I became an entrepreneur. Before launching BlueVine in 2013, I worked in venture capital where I grew to appreciate the importance of careful and thoughtful planning in launching and building a company.

It really comes down to one basic principle: You hire to meet your goals.

Of course, defining your goals is not easy, especially when you’re just starting out. As a fintech entrepreneur, I’ve become a strong believer in what Silicon Valley pioneer Andrew Grove said about the technology industry: Only the paranoid survive.

As an entrepreneur you must have a grand vision for your startup, and aim for the best outcomes. But you must also prepare for the worst-case scenarios.

That’s not always easy to do for entrepreneurs who are, by nature, optimists and focused intensely on ambitious goals. That personally has been my attitude: I shoot for the stars.

But I’ve also learned to constantly ask myself and ponder this thought: “What if something goes wrong? What if shit hits the fan? How do I avoid having to tell half of my employees that I have to let them go?”

Facing and dealing with unexpected setbacks are part of running a business. But in my view, the best entrepreneurs are those who prepare for the worst while thinking of their employees’ welfare.

It’s also important to remember that layoffs don’t just affect the people you let go. Layoffs can also have a serious impact on those left behind. They can cause disruptions in your operations. Your company culture and morale can suffer.

I actually saw this up close as a venture capitalist. I worked with many startups that grew too fast without enough preparation for things going wrong. I’ve seen entrepreneurs run recklessly and hit a wall. I’ve seen enough people do that and fracture their skulls that I decided shortly before launching my own startup: “No, I’m not going to do that.”