The low-down Hide
Have you always dreamed about being a people manager?
No? As a startup founder, hiring is a dream come true whether you wanted it or not. At least until you can hire more people to do it for you.
Hiring isn’t about just finding help. It’s about driving the company forward. Who you hire now will influence your future.
Sourcing staff is competitive, time consuming, and fraught with frustration and disappointment. Making the wrong call or taking the wrong bet on a candidate can have serious consequences.
You likely started with a handful of talented and passionate people who shared your vision. But as you move into the next stage, you’ll be dealing with external people. Outsiders. Newbies with their own agendas.
And when the roles are undefined in the early stages of your operations, the waters get even more muddy.
Assessing the stage of your startup
Growing a company is tougher than starting one.
Your original team was composed of people you trusted, and they were all onboard with your vision. They likely also had different skills that all complemented each other. But as your business progresses from the ideation stage to product development, from development to early marketing, and then on to scaling up, you’ll be filling a lot of new roles.
It’s problematic to define exactly what roles to fill without first assessing what stage your startup is in.
If your business is still in the early stages of product development, you might need talented engineers or designers. These are foundational roles that will probably be easier to fill, but when hiring for this next group of key contributors, consider two things: can they share your vision, and do they have the growth potential?
A business that has grown beyond the initial development stage might be ready to add sales staff, customer support, or marketing/social media teams. It’s worth investigating outsourcing some of these roles at a more efficient cost, until you’ve grown enough to bring it in-house.
One role that every company needs, and it’s best to keep it in-house, is a finance professional. As a founder, you’re already juggling multiple jobs. Do you really want the burden of managing payroll and staying in the good graces of the tax man? A proper accountant will manage cash flow, payroll, taxes, debt, and will be an invaluable asset when it’s time to scale up the business with investment capital.
If you’ve reached the point where you have a great product, a well-defined market, and ample financing, then you’re ready to scale up. You need to be thinking about adding a senior executive to take it to the next level.
A startup’s lifeblood of new talent comes from three primary sources: networking, social media, and recruiters.
The majority of startups, as well as established companies, pull their best talent from the same well: networking. Referrals from people you know and trust, or from people they know, are the surest bet when it comes to finding a great candidate. Talented people tend to mingle with other talented people.
It’s a big part of your job as a founder, from the first day, to cultivate a network of potentially useful professionals.
Social media can be hit and miss, unless you’ve invested in maintaining a viable presence in the right communities. Your presence, the image and vision of your company, and how you’ve contributed to conversations is important.
Recruiters can be reserved until you need to scale and you’re ready to hire your first executive or department head. But this is also a time when well-connected investors or advisors might be a better solution. There are some positives to outside recruiters, especially if you need executive-level talent, and if you use one who specialises in your industry. But remember, while you want to hire the right person for the role, some recruiters just want you to hire someone.
A good recruiter’s input starts before the candidate search. They can help you define your spec and craft the right requirements for a candidate. They will be able to give you a read on the pulse of the hiring market, and what it’s going to take in terms of compensation to land your ideal hire.
They will represent your company like an ambassador, and find top-level execs who may already have jobs but could be convinced to jump ship.
The first executive hire
Don’t be in a hurry to hire an exec. It will take some time for a startup founder to be sure about the responsibilities they need to hand over.
It can be liberating, especially for tech founders, to find someone who can run the company while they stay focussed on the vision. And, an extremely high level hire, like a CEO, might bring a new scope to the vision of the company if you find one who has experience in your industry.
Adding a veteran leader to your startup can bring organisation and structure, a clear direction to scale up, best practices and mentoring, and bring validity to your business presence.
With exec hires, you need to consider offering equity. If you’ve been smart up to this point, you haven’t given away too much equity in the company to friends and family, or every early employee. You need to keep your cap table clean for the future.
But equity in the compensation package for a high level exec can help offset risk. When a candidate is looking at your company and an offer, he/she is calculating the current income rates for their skills, over a certain amount of time, against the possible return of coming to work with you. If the potential, with an equity grant, appears to be several times that income amount, then the maths works.
Most equity grants don’t fully vest until a period of several years, with the first block of shares usually not being awarded until the first year. If done this way, you aren’t giving away too much of the company or control. You’re creating an incentive for your team to stay long enough to make substantial headway.
In the end, even if you aren’t sure about your needs, it pays to be hiring obsessive. Finding the right people with skills and potential, who fit the mould of your company and your vision, will make everything else easy.
In the words of Nikos Moraitakis, CEO of Workable: “team quality is the single best predictor of success.”