Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Alyssa Royse
As my friend
Scott always says, startups don’t starve, they drown. Yah, we think we need money (and we do,) but what we really need is help.
Barring the sudden arrival of a fairy godmother with a magic wand, most of us would be really happy with a great team. But how do we go about building that team? Obviously, when we are all grown up, we know we’ll want a full staff of people in marketing, sales, design, biz dev….. the works. But being a startup generally means building that team one hire at a time. That means that not only does that one hire have to do their job really well, but also that it has to be the RIGHT job to get you to the next step, the RIGHT person to meld with the chemistry of the people who are already there, the RIGHT person who can actually do more than one job. Oh, and that person has to really like startups – high risk with the potential for high reward, but touch and go, stressful, underfunded and understaffed. It’s not that glamorous when you look at it honestly.
So how the hell are you going to find those people? I don’t know either. Luckily, my friend
Tom Ryan knows. Tom’s a recruiter, and he’s damned good at it.
1. When is it time to hire? You have a good idea, you’ve tested it, you’ve raised a little bit of seed money, how do you know when it’s time to start hiring?
First off you should remember the old maxim that “for every person you hire your business grows incrementally and your headaches grow exponentially” – you should always be careful about adding headcount and only do it as the business warrants it.
As a CEO myself I’ve always hired to a combination of the business plan and what the sales and investor pipeline is telling me. You’ve got to be able to fulfill orders and/or services when customers buy something and generally need people to do that, but there is always lead time involved in finding good people, so the key question is when do you start the search process?
The way I’ve done it in the past is to take action based on a percentage of certainty that you and your salespeople feel about particular investor or sales opportunities, so for example once you get a pipeline opportunity to 75% certain you begin to take action on it assuming it’s probably going to happen. It’s all about good forecasting which is always hard in a startup but nobody said it would be easy, right?
2. What roles do you hire to fill? Sure, you need sales, operations, design, bookkeeping – all of it – but you can’t have it all yet. How do you identify WHICH positions to fill?
Nothing happens in business until somebody sells something. It’s all about selling stuff and making stuff in which ever order that either makes sense or you have the money to pay for! Avoid support positions, particularly full-time ones, as long as possible.
As a CEO, you should be the main salesperson, but add others to your team to help you sell if you can’t make the sales plan happen yourself. That being said, you can’t make promises you can’t keep and so need to make sure the fulfillment part of your business is hired in time to make sure your product ships or your service is delivered.
Everyone in the early days of a startups should either be making smart promises that solve real customer problems or keeping said promises that result in great customer case studies.
3. Given that, in this town, you’re competing with the likes of Microsoft, Google, Adobe and others for top talent, how can a startup attract people? What are the advantages of startup that the giants just can’t offer?
Perhaps I’m being grandiose, but my own thought is that people who tend to want to work at startups are just a little more evolved than corporate people. It’s gone beyond just the seeking of basic security, food and shelter to seeking something more self-actualizing and fulfilling, and you should be able to attract the people who have gotten to the point of looking in the mirror and doing their own personal version of “give me liberty or give me death”!
The risk-reward profile should be in your favor in terms of the potential rewards – financial and otherwise – being much higher for a startup employee. It’s amazingly rewarding to bring order to chaos and shape something in the image you have for it, and people who work for startups are usually seeking these types of challenges and want to make a big impact.
4. How do you frame expectations? Startups are risky, no doubt about it, how do you express the reality of that without scaring people away?
Which is riskier, being dependent on your wits and skills you’ve developed, or trusting the control of your career to some bureaucratic manager at a large company? If people believe in themselves then being at a startup, even if it fails, is often a less risky path in life to take. I look at a lot of resumes and usually don’t hold it against people for trying something risky and failing. You tend to learn quickly in those types of situations, so if you can stare that bear in the face and not be scared, startups are all upside I think.
That being said, you do need to be clear about everyone having to make due with limited resources. I’m always a little wary about someone who hasn’t ever worked at a startup before as it is a bit shocking having no support systems and having to create them yourself.
5. At the end of the day, is there just different DNA for startup people rather than corporate people?
I think so – the profiles in risk taking and the need for self-fulfillment mentioned above are the big ones. One person’s view of “security” that corporations provide is another person’s “soul crushing experience”. That being said, remember that you can’t just mix in the DNA of a bunch of startup people and have the chemistry automatically work. I think that the “fit” between people at a startup is often more important than their skill sets matching up exactly, particularly at the executive level.
One thing I think startups should consider doing more than corporations as they grow is hiring people as contractors initially to make sure that everyone can “work in anger” together well. There is nothing wrong with dating before you get married as you build your startup team – we do it in real life to mitigate risk (among other things) so should consider doing it more in business life. It does mean a little more uncertainty up front, but hey, uncertainty is what startup life is all about – it makes life interesting and fun!
