Originally Featured in Startup Nation
You’re ready to ramp up staffing your startup. Congratulations! But where do you start? The answer to that question is critically important. Hiring the wrong team is a top reason startups fail (only lack of market need and running out of cash outrank it). The following tips can help you get recruiting on the right foot by focusing on what truly matters.
Hire leadership first
You may have heard conflicting messages about who to hire first for your startup: leadership or support staff. In most cases, leadership should come first.
You’ll begin wearing all hats, serving as chief of technology, operations, finance, marketing, sales, and so on. But, as you hire your leadership positions, you should find yourself with fewer and fewer of those “in the weeds” roles to play yourself.
Then comes the magic. Each of those executives can then be responsible for hiring their teams which, in turn, allows them to grow “out of the weeds.” Your startup can grow according to a well-known management strategy called span of control (which actually started as a military strategy).
Real estate mogul and best-selling author, Gary Keller, reminded me of this strategy during a recent presentation. The idea is that a leader in a typical startup should have no more than five to seven people reporting to them, each of those direct reports should have no more than five to seven people reporting to them, and so forth. That way, managers can give more time and attention to direct reports, which can enhance culture and communication and improve retention. It’s a great way to prompt exponential growth or what Keller and his “The ONE Thing” co-author, Jay Papasan, call a hockey stick trajectory.
Don’t get distracted by corporate experience
You want people with experience, yes, but be clear with yourself on what type of experience it is you’re looking for. You might be tempted to hire someone comfortable in a large, corporate setting who is thriving in the environment you hope to reach someday. However, that person is rarely the type who will roll up their sleeves and do what needs to be done to build a company from the ground up.
Instead, look for signs of entrepreneurial DNA. Startup veteran, Benjamin Yoskovitz, recommends recruiting leaders with startup or small business experience and those with personal projects or side hustles, proving they’re driven and dedicated to trying new things. Don’t shy away from candidates with founder aspirations themselves or those with a history of switching jobs every two years or so, as Yoskovitz explains that’s the sweet spot for when employees are receptive to change, and the fact that they are offered new opportunities continually may be a sign they’re a great catch.
Hire people smarter than you
Steve Jobs is credited with saying, “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” This can be an intimidating prospect for a startup founder. How can you maintain control of the car if you don’t know what’s happening under the hood?
The answer lies in your startup’s core values. If you recruit leaders who fit your core values, then you can realistically trust that their brilliance will work in your favor. For instance, our core values at recruitAbility include being accountable and direct, living to serve, striving for transparency and being a team player. The only way to be fired from our team is to undermine one of these values. So, even if my team members are smarter than me at their specific job and challenge us to be better, their openness, honesty and humbleness mean that I never feel like I’ve lost control or that I don’t have a grasp on how our business works from the top down.
Don’t be cheap when recruiting
Clayton Christopher is a well-known Austin, Texas, entrepreneur who founded both Sweet Leaf Tea and Deep Eddy Vodka. He’s very open with his startup experiences and often recounts how he learned to invest in talent from the start.
“One of the things I wanted to do from day one at Deep Eddy was to create a world-class team,” Christopher told Texas CEO Magazine. “When I started Sweet Leaf, I didn’t think I could afford to hire the best and the brightest. At Deep Eddy we took that attitude from day one, that we were going to hire experts and people at the top of their game, so that really accelerated the growth.”
He admits that the tactic results in higher startup costs, but that the payoff can be swift and impressive. The bottom line is that good startup talent is hard to find these days. If you want to hire difference-makers, you’ll need to pay them what they’re worth.