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tl;dr?
Having read the whole thing, I... honestly don't know. Is this fiction, or a true story told in a fictionalized style? What computer business are they in that they go from profitable to unprofitable in three or four days and this is a call to fire the entire company in two days? World's shortest runway or what?
If I'm not mistaken the business was iPhone apps. Honestly it sounds to me like sales dropping below B/E was just a good excuse to break up the startup, clearly the breakdown of the founders' relationship would have forced a change sooner or later. It seems both founders wanted out and if that's the case then why waste time when you're cash flow negative, better to cut your losses early so you still get something of value out of the startup.

Of course I could be completely mistaken and I think we'd all appreciate a comment by Max to clarify, if he's up for it.

Apparently you are not familiar with maxklein.
I really am not. Could you give me at least a hint in what sense you meant that?
That's exactly how he writes. "Is this fiction, or fact? Or stylized, fictional-sounding fact?"
They set up shop in China. As sales drop, a girl comes along. Founder likes girl, co-founder likes girl, drama ensues, co-founder quits.
> "I told him that if he did not go my way, I’d stop doing the programming work. He said if I did not go his way, he’d stop the staff from working."

This quote struck me because it's a surefire sign that a project is probably going to fail. Every time I've seen people holding a project hostage by threatening to withhold their skills, those projects have either ended in failure, or even when successful, the people on the projects had very low morale.

In my experience, it's very important to create a culture where people do not use unique skills to hold a company hostage. For instance, a designer should be willing to implement a design that is (to her) sub-optimal from a design perspective, e.g. when A/B tests indicate that this design generates more money.

I agree, but in this case I'd say the problem seems to be 50/50 cofounders with no clear hierarchy for decision making. I've been burned by this too many times not to insist on a clear discussion up front on who has "last call" on product issues. Of course something like the quoted interaction is a symptom of a dysfunctional relationship and probably has very little to do with the actual issue at hand.
I think the post should have been titled 'How I destroyed my startup by competing for the only girl in the office with my cofounder'.

Small offices are no places for dramas. A bit different in large organisations where you are in different departments/buildings. Still a very tight rope to walk though.

The co-founder already had a girlfriend, so I think it was only his fault.
One sentence summary/advice: don't hire a pretty girl.

[edit]: hey why the downvote? go read the story and you'll see why.

Reminds me of the naval idea that it's bad luck to have a woman on board.
Are you writing a synopsis of what happened or a romance novel? So far it seems there are multiple thoughts, and the part about the pretty girl is pretty tangential.
What is the role of China in this article other than in the title?
Nothing. But it catches attentions.
You guys fired people based on daily figures? Must be excellent for morale
Do daily fluctuations even matter, especially at startups?

I'm pretty sure even big companies have bad months. It's not a reason to start firing people left and right.

For reference: Why I’m giving up on Europe and moving my startup to China http://maxkle.in/giving-up-on-europe/ and HN discussion - http://news.ycombinator.com/item?id=1547964

Unfortunately, the story focuses only on the girl. I would have liked to read about the actual experiences of doing business in China. He just glosses over the fact that their programmer was fired. Also, is his co-founder Chinese? I think that would have been relevant to mention.

One of the most poorly written articles I've seen on here.
So he was ok with firing the programmer but didn't want to fire the cute girl who couldn't quite do her job of writing ad copy? Cofounder fail.