You’re right to slow down your hiring. But not for the reason you think.
Over the past few years in Silicon Valley I have heard many a founder brag about the size of their startup’s headcount. Team size became the new revenue or profitability in the absence of those things. Venture cash was easy-ish. Hiring up was a sign of your ambition, and the best way to show that you’re a big deal.
Then, on Friday February 5th this year, LinkedIn’s stock dropped 43% in a day and the early-stage startup world changed over one weekend. Boards re-fashioned user growth targets into cash-flow targets.
Financial prudence trumped headcount growth, and founders began to think very differently about growing their teams at any cost.
But there is another reason to grow your headcount more carefully. It is a reason that has often been overlooked in this discussion and one that has nothing to do with your finances, but is arguably more important in the long-run.
If you work in any kind of organization, you know that culture is king. It’s the thing that keeps you there. It’s the thing that helps you find meaning in what you do. It’s the way things get done on a daily basis.
But culture is curated. And it must be curated carefully.
When you hire someone, you’re not really just bringing on one person. That’s too simplistic a view.
When you hire someone, you’re actually bringing on a brand new set of relationships that add enormous and hidden complexity to your world.
Let me show this with a couple of simple examples.
If your organization employs 20 people, and you add a 21st, you’re adding 20 brand new relationships to the company, taking the total number of bilateral relationships up from 190 to 210.
If your organization employs 75 people, hire #76 is going to cost you 75 new relationships, taking your total up to 2,850 from 2,775.
2,850! That is really, really high. Managing 2,850 relationships is far more intimidating than managing 76 people.
Here’s how this looks for your first 100 hires (X axis) and the number of unique relationships they create within your organization (Y axis):
If you buy into this, it’s a very different way of thinking about growing your team and your culture.
How could this be helpful to you going forward?
Relationships are harder to manage than people. You may feel that you have a great relationship with hire #76. That’s why you brought them on board. But what about the other 75 relationships you’ve just introduced into the mix? How many of them will end in friction? How many of them will add a new layer of process to your decision-making engine and slow you down? People on their own don’t cause this. Not a single member of your team wakes up in the morning with the ambition of slowing you down. But the thousands of relationships you’ve created between those people will absolutely have a tendency of doing this.
And so, hire carefully. It’s the single biggest lever you have to drive your culture as your organization grows. A team of 10 involves 45 relationships; a team of 76 involves 2,850. That leap may be bigger than you expected. Make sure you’re ready for it.
Anthemos, CEO of Zumper
