How To Build Your Startup’s Founding Team
Who should your first hire be? How about your fifth? Your 10th?
Every startup founder faces an overload of critical decisions early in the life of their company. None of these decisions are more important than selecting the first few people you choose to work with.
The makeup of your startup’s founding team is going to be the difference between success and stagnancy. An ineffective team won’t kill your company quickly, it’ll lead to a slow, painful, inevitable failure. To make matters more difficult, founders often get drawn to the wrong people for the wrong reasons.
In over 20 years of building companies, I’ve established a pretty solid track record of bringing together entrepreneurial talent. So I decided to take some time to review about a dozen recent matches to figure out what makes the good ones work.
To give yourself the best chance of getting early hires right, you’ll need to find fit first, then fill roles, then establish rhythm.
Find fit by filling gaps and attacking weaknesses
The first rule of startup hiring also happens to be the first rule most founders ignore: Don’t hire people who are like you, hire people to fill your gaps and address your weaknesses.
That starts with skill set.
An entrepreneur-turned-investor friend of mine likes to say, “In the beginning everyone needs to be either coding or closing.” I’m on board with this, with a couple twists. I like to strive for everyone to be either making or selling.
Making is more than coding. Coding builds the engine, making gets the car to the showroom. And to me, selling is more than closing deals, it’s creating a scalable machine that will move more and more product out the door at increasing margins.
Your balance between making and selling should always be around 50/50. Figure out where you’re weak, and fill that gap next.
Personalities should also be balanced across an early team. I’m not saying you have to box everyone into a personality category, but if someone is already in their own box, including you, you should probably fill those gaps and counter those weaknesses as well.
In other words, if you’re totally focused on the future, you need balance from someone who is focused on the now. If you’re super-strategic, you need someone inherently tactical. If you’re a good cop, go find a bad cop.
Passion can be overrated, but one thing you want to make sure of is that nobody on the early team is there just for the job. If the person you want to bring aboard is not sold in — if they don’t believe in the concept — they’re not a good early hire. They might make a good contractor.
As an aside, one of my favorite signals for measuring passion is when, after a meeting or interview, a potential hire emails a list of thoughts and ideas and questions they came up with AFTER the meeting or interview. And not the bullshitty, look-at-me questions or questions about their role or the viability of the company, but questions and ideas that show that they kept thinking about the problem and the solution after they left.
Fill Roles Carefully and Conservatively
Theoretically, the earlier the hire, the larger the impact on the business. But that isn’t always the case. Sometimes you just want helpers, not heroes. Here’s how to slot new folks in.
Cofounder: Be careful with this role. I’ve seen plenty of examples of people getting burned by not being made a cofounder when they should have been. I’ve also seen tons of startups that have cofounders who shouldn’t be cofounders, and they struggle with the dead weight.
Cofounders contribute more than a small share of the evolution from idea to reality. If they were a major reason why the idea went from thought to plan to existence, they should be a cofounder.
Executive: Executives don’t have to be cofounders, and vice versa. Executives lead the company or the teams. Making a CTO a cofounder just because they come aboard early is a mistake. Making a cofounder a COO just because they’re a cofounder is also a mistake.
Employee: Everyone else you hire full-time is an employee, and frankly, it’s too early to be making decisions about where people fit in the org chart. Usually you’ll be surprised at where things shake out on their own six months to a year in.
Advisor: These are people with a ton of strategic skills and experience that you might need close by but not day-to-day, and otherwise couldn’t afford. As an advisor, they can get paid what they’re worth, and you don’t have them slotted in at 40–80 hours a week at their rate.
Consultant/Contractor: This is also a good way to get a few hours a week or a couple solid full-time months out of an expert to fill a role you might not need full time, like finance, legal, or tech. In that way, they’re like an advisor, but these folks are tactical instead of strategic.
Rhythm makes it a team, not just a bunch of employees
It’s really freaking awkward to be the boss of one person.
And that’s true all the way up to about 10 or 12 people, because before that, it’s rare for a natural working rhythm to develop. So to get over that gap, you should proactively establish a new working rhythm every time you bring aboard a new person.
Basically, you want to get everyone around a table and hash through these skeletal guidelines with the new person:
- Here’s what everyone else is doing.
- Here’s what you’re going to be doing on our own.
- Here’s what you’re going to be doing with other people.
- Here’s how much of your time, as a percentage, you should allocate to each of these initiatives.
- Here are your goals for each initiative, with milestones.
This isn’t a scrum or a status meeting, it’s a top down list of everything that is going on and who is handling it. It’s a guidemap for that person’s Monday to Friday, 8:00 to 5:00, or whatever hours your startup keeps.
Each time you add someone, you’ll set an initial benchmark to help the new person find their fit and help the rest of the team understand and complement the shift in workload.
Once you’ve done all this a dozen times, hiring gets easier. But these are good habits to form and keep, because hiring the wrong person for the wrong reason, whether it’s your first employee or your 500th, always does damage.
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