In the early days, the fewer employees, the better. Managing people takes up a lot of time, employees are expensive, and the bigger the team, the slower the decision making.
If you are a team of two founders, bringing on a third cofounder or 3rd member in the team means increasing your team size by 50%. Similarly, when you go from three to four people in your startup, that’s a 33% increase in the size of the team. This means that the first few employees have a huge influence on your product.
Importantly, they also impact the company culture and how things get done.
Don’t underestimate how important this is. Changing company culture further down the road is incredibly hard. Sam Altman, president of Y Combinator, often emphasizes the importance of this by reminding people that a bad hire early on can be enough to bring down the company completely.
In a previous post, we have covered how to assemble the ideal startup team and the 6 key roles you need to hire for in the early stages of your startup.
As your company starts to grow, you will find that the people who are indispensable in the beginning of the startup’s life, need to start changing. At the beginning, it is important to have generalists who can wear multiple hats, but bring on specialists as the team grows.
The best web/android developer you can afford today might be able to build the first few versions of your app, but when your company starts growing rapidly, you might need a slightly different skill set.
People who are able to work well independently don’t always work well in a bigger team of designers or developers.
However, there is no correct way of hiring. There are fantastic product managers who have a magical touch in getting insane amounts of productivity out of teams of developers, but who aren’t the best coders themselves. That’s not someone you will want on your team to start with, but you might need them further down the line.
So, the big question is,
Should you hire for your current business needs or hire for the future?
In many cases, your existing employees will surprise you positively. I’ve experienced that a relatively junior developer turned into a complete rockstar down the line, or that a more experienced designer who had never managed people before turned out to be a natural leader.
Sometimes it goes the other way. You might get a top-shelf ninja to join your startup but then find out that they are not motivated, don’t perform like what it says on their resume, or probably joining your company as a temporary gig.
It will be extremely difficult to attract top-shelf talent as your startup is young, unknown and cash strapped.
However, don’t settle for mediocre staff. Quite the contrary; a so-so team is never going to build a great company. AirBnB famously took six months to hire its first employee. After it started hiring, it only employed two new staff members in its first year.
When hiring an employee, look out for these three things:
- Can they do the job you have planned for them?
- Will they punch above their weight and be intrinsically motivated to build the next big thing?
- Can you get along with them?
As a young startup, you probably won’t be able to get the attention of the cream of the crop, much less be able to hire them.
Don’t let that stop you.
Giants like Apple, Google, Facebook, Amazon, and Netflix don’t have a monopoly on great talent. In fact, while the big startups you’ve heard about undoubtedly have a lot of smart people, not all of those people are a great fit in a small startup where you really have to roll up your sleeves and work long hours in constant crunch mode.
So, where do you find your first few team members?
The best place to start looking is the people you already know. The process, in fact, is very similar to finding your cofounders, except with (slightly) lower stakes. Think about the best engineers you’ve worked with, the most inspiring salespeople and designers you know and trust.
After you’ve successfully hired your first few team members, tap into their networks for your next few hires.
For every new staff member you add to the team, your company’s network grows exponentially. It is also worth pointing out that your existing staff’s incentives are aligned with your own. They want to work with smart people who get the job done, who are easy to get along with and who deliver high-quality work. This is the reason why a lot of companies have incentives for referrals that result in new team hires. Copy them and put incentives in place. It is worth every penny you pay staff to refer great employees.
The silver bullet to finding the perfect staff members for startups is simple. Even if you’ve hired people before, chances are that you aren’t that good at interviewing people for a role. That’s fine, but find ways of compensating for that shortcoming.
I believe in giving people a short trial period. Try them out for a week or two. If they make you want to work with them more, you have your answer. If you’re thinking, “Well, that was OK, I suppose,” you also have your answer. Don’t sign on the dotted line unless you’re sure.
And remember: hire slow, fire fast.
FAQ – Building a Startup Team
1. Why is it important to carefully select the first few employees for a startup? The first few employees of a startup have a significant influence on the product, company culture, and overall success. They lay the foundation for the future growth and direction of the company. Choosing the right individuals who align with the startup’s vision and values is crucial.
2. How does company culture impact a startup? Company culture defines the values, norms, and behavior within a startup. It affects how things get done and sets the tone for the work environment. Establishing a strong and positive company culture from the beginning is vital as changing it later can be extremely challenging.
3. Can a bad hire early on bring down a startup? Yes, a bad hire in the early stages of a startup can have a detrimental impact. It may lead to decreased productivity, conflicts within the team, and misalignment with the company’s goals. It is important to carefully assess candidates to avoid hiring individuals who may negatively affect the startup’s progress.
4. Should startups hire based on current needs or future requirements? There is no definitive answer to this question. Startups can benefit from a mix of both approaches. While hiring for current needs ensures immediate support and skill sets, considering future requirements helps in anticipating growth and building a scalable team. Evaluating the potential for employees to adapt and grow can guide this decision.
5. How can startups attract top talent despite being young and unknown? Startups may face challenges in attracting top talent due to limited resources and visibility. However, they can focus on building a strong company culture, providing opportunities for growth and learning, and offering competitive compensation packages. Leveraging personal networks, referrals, and creating incentives for employee referrals can also help in finding quality team members.
6. Where should startups look for their first few team members? Startups can start by looking within their existing network of trusted contacts, such as former colleagues or industry connections. Referrals from current team members can also be valuable. By tapping into their networks, the startup can expand its reach and find individuals who are more likely to align with the company’s values and goals.
7. How can startups assess potential candidates effectively? Startups may not have extensive experience in interviewing and evaluating candidates. To compensate for this, offering a short trial period of a week or two can be beneficial. It allows both parties to gauge compatibility and performance. Pay attention to how well candidates fit within the team, their motivation, and their ability to fulfill the job requirements before making a final decision.
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