Startup School 2: Finding the right people on a budget.
Kiteline Health has closed its doors. This is a series exploring what I’ve learnt over the past three years as CEO. Kiteline provided B2B2C health coaching to people with long-term health conditions, helping them improve their lifestyle habits and increase longevity.
“A company is only as good as its people.” People are arguably the most important factor in a business’ chance of success. Get the right people on board, and you can make even mediocre ideas fly.
Investors have known this for years. A Stanford study in 2016 surveyed 885 venture capital professionals at 681 firms, asking them to rank factors driving investment decisions according to importance. The study “concluded that the abilities of a founder and management team are the most important factor driving investment decisions — often more important than even a product or technology itself.”
“You know, as most entrepreneurs do, that a company is only as good as its people. The hard part is actually building the team that will embody your company culture and propel you forward.” ~Kathryn Minshew, The Muse
We all know team is important. But as a founder, how do you entice world-class minds to join you on pittance salaries? You will, of course, offer some combination of salary and share options. The fact remains that you aren’t able to offer much in the way of cash today. This sadly precludes some folks from working for you (no matter how much they want to!) because of their own personal cashflow requirements. And means you often cannot access the best talent for the job. This is a disappointing systemic fault of the startup space — it’s reserved for those who can afford to work for not much.
Despite this, and in order for your business to succeed, you need to find a way to tap into exceptional talent, cutting edge experts and deep networks, particularly with your potential clients.
The Power of the Advisory Board
In comes the Advisory Board. This is a magical yet often informal group that offers early stage startups access to small slices of time of some of the brightest minds in the world. In exchange, founders offer shares that bring a promise of future compensation through an alignment in goals of growing the company together.
Advisors are a startup’s best friend. The good ones believe deeply in your mission, and are there to call upon for advice, insight, introductions and feedback. They are high status people who can lend you, the unknown brand, their status.
Advisors are a startup’s best friend.
At Kiteline, we had two standout advisors: Steven Hamblin, an ex-Babylon exec and healthtech entrepreneur who became one of our angel investors and worked with us on Product, Tech, and navigating the health market; and Dr Nina Fuller-Shavel, an award-winning Oxbridge-trained medical doctor, scientist and educator with over a decade’s experience in integrative health, who connected us to many of our best health coaches and provided the rigour behind our approach.
Once you have won over an Advisory Board member, it is critical to quickly work out the best way of engaging and getting the most value out of them. This takes time and effort, but it is so worth it. Steven liked to work on slack, which worked really well for us allowing us to ask him “quick” real-time questions here and there. He was a proactive advisor, often offering slots of time for longer, more strategic discussions. Steven even spent a Saturday afternoon teaching me how to run tactical product. Dr Nina had such a busy clinic schedule that we had to book time with her assistant months in advance, and always came to meetings prepared with an agenda of specific points requiring her feedback.
Where we lacked good advisors was in sales. We met with a few potential advisors with networks in corporate HR & wellbeing leadership, but at the time I felt they were asking for too much equity (and sometimes cash that we didn’t have). I didn’t recognise at the time just how important their networks were to us. If I had my time again, I would have probably said yes to a few of them — at the very least on a trial basis. You can build in vesting to advisor shares to protect yourself by ensuring advisors deliver real value before actually giving anything away.
Choose a co-founder to complement your skills
Arguably the most important “hire” will be who you choose to go on this rollercoaster journey with. I found my co-founder, Christine Beardsell, through Antler’s second London cohort; a process I’ve described in the past as a mix between The Apprentice and Love Island. At the same time as completing mini business challenges in randomly-assigned groups, you are “pulling people for chats” about what kind of business they see themselves building and determining if it’s a match. You are strongly encouraged to match with people on the other side of the tech-business divide.
Christine and I, although both non-technical business people, complemented each other brilliantly. Our skills were polar opposites: Christine had previously worked in agency-land, leading teams of 200+ people. She brought the design eye, the content development rigour and a great ability to manage a team. I came from the client-side and from the finance side of things, with a background in impact investing and impact measurement. I am uber organised, and this naturally led me to owning fundraising, accounting, finance, legal, operations and HR.
Of course there was some conflict, as there is in any close relationship. We both didn’t particularly enjoy sales and it was a struggle determining who would own that. Normally it would fall to me, as CEO, but Christine had such a knack for it, landing our contract with John Lewis from a cold LinkedIn outreach.
What mattered in the end was the vision we shared for what kind of company we wanted to build – something that positively impacted the lives of millions of people. And an agreed approach to cultivating a culture that prioritised wellbeing. I am truly sad that we don’t get to continue the journey of building somewhere great to work.
Build in-house or through an agency?
Technical roles are very difficult to fill on startup budgets. For first-time founders who don’t know how to run a tech team or design a product, it is much easier to find a technical co-founder who can, whilst having enough skin in the game (emotionally and practically) to not need a massive salary. Or to find a co-founder who has at least some experience in managing or working with tech teams and building products.
For two non-technical co-founders, like Christine and me, the big question was how to build the product: hire in-house or engage an agency? The right in-house developer can be extremely hard to find at the right price.
“Getting a very strong technical person that has worked in startups, has at least 5 years of experience, knows what it’s like to build something from nothing, and is a bit entrepreneurial is a game changer. For me, someone with a bit of design experience, who has enough experience to know how to build something reasonably well is insanely important.” — Stephanie Demetriou, co-founder Maekersuite
We hired our Head of Product and Technology from the global Antler talent pool. He had a huge job to both run product and build it all by himself. He did a great job but I always wondered if perhaps an agency would’ve got a strong MVP built faster, given their large teams with wide ranging skills.
Agencies can work, but they need to feel like they’re in-house. Make sure you can have a developer dedicated solely to your project. The downsides of working with an agency is that they can be expensive, with unpredictable escalating costs for extras. Depending on the agency, you may also have to tell them exactly what to build with not much room for creativity and pivoting, especially within budget. I also wonder how responsive they can be with testing and learning where you constantly need to plan and implement changes to features and design.
The significant upside of hiring our Tech lead in-house was he fit our culture perfectly — he knew exactly what we were trying to build and why, and he resonated deeply with the problem. I would think it’s hard to find that passion when working with an agency.
Hire and fire decisively and quick.
At one point, our team consisted of five FTE and two government-funded Kickstart interns. It was exciting running a growing team. We all worked really hard to make our product the best it could be.
We made our share of hiring mistakes, but we generally fixed them quickly. When you are running a VC-backed startup, you have a limited window of time to succeed. If the people on your team are not accelerating you towards that success, you sadly have no time to waste with them. It’s a harsh reality that founders need to realise quickly.
A great way to think about this was recently described by one of my personal heroes, Nicola Kilner, CEO of Deciem, who said on the Diary of a CEO podcast: “There is a conflict between the words being kind and being nice… Being nice is kind but can be superficial. If someone is not performing at work, it’s not necessarily a nice thing to have that conversation with them, but it is the kind thing if your intention is to help them.”
On the other side of the coin, when you find someone great, do everything in your power to hold on to them! On the same podcast, Nicola described what is needed in terms of talent at early-stage startups: “The ability to wear whatever hat is required of you in that moment is the most important skillset.”
Early on, we worked with a UX designer on a freelance basis who was excellent. We really should’ve hired him, or at least engaged him on a retainer of sorts to keep him in the Kiteline family. We didn’t for budget reasons — which is understandable and the most common trade-off for startups when thinking through the team. But our product would’ve been much better off if we had found a way to keep working with him.
Domain expertise — be all and end all?
My background is in engineering, cross-sector innovation consulting and impact investing. I had never worked in the healthcare industry in my life. I brought a patient’s perspective to a big problem, which is very necessary and sadly underrepresented.
It’s easy to think: “We don’t have the right experience or networks to make it work, nor do we have the cash or ability to hire those skills in.” But people found companies all the time in sectors they don’t know… like Ali Parsa founding Babylon Health after studying engineering followed by a career in finance. It’s definitely possible to found a company in a new domain.
There are actually advantages to starting something in a new sector — you bring insight and inspiration from elsewhere and challenge “the way things are done around here”. You may think about old challenges in new ways, and bring potential solutions from adjacent sectors. In this case, you will really need to lean on your advisory board (and when you’re larger, hire in top sector minds) to open up new networks and tell you when you’re wrong or something actually can’t be done because of regulation or physics.
You will, of course, lack networks and you will have to work harder to get stellar advisors on board, but you will be surprised how far a cold LinkedIn message will take you if someone loves what you are trying to build.
And so it’s over
One of the things I will miss most about not running my own startup anymore is the possibility for building a great company, with passionate people all pulling in the same direction to solve a big tough worthwhile problem. We didn’t get that far with Kiteline, but I do hope to have another shot someday.
Read Startup School 1: Product here.
Read Startup School 3: Luck here.
Read Startup School 4: Sales here.
Read Startup School 5: USP here.
Read Startup School 6: Funding here.
