During the early days of Crowdfire, someone with prior experience helped, guided and connected me with the right people without expecting anything in return. This inspired me to contribute to the community and help out budding entrepreneurs in the hope that some day, they will do the same for someone else. I see a lot of people starting out, I see some startups shutting down, and I feel the need to share a few things with all the new entrepreneurs out there.
Dear Startup Founder,
Congratulations on your idea! But let me put it bluntly: your startup journey is not going to be a cakewalk. You will see a lot of successful (and unsuccessful) companies around you. Every day you will read a lot about startups raising capital, moving to swanky new offices, or being lauded for introducing a new employee benefit. Read all you want but get the thought of following suit out of your head. It’s time to work hard. Getting a plush office and perks are important but fall secondary to building a successful product. A few things to keep in mind as you’re starting out:
Be badass but not an ass!
As a startup founder, it is crucial for your team to like you, but not just because you are a good person. They decided to join you because they were excited by your vision and wanted to help you realise it. In order to lead and mentor your team, your team needs to have faith in your abilities. If you’re a great guy (or girl), but a poor leader, you’ll make a lot of friends but won’t make anything happen. If you’re a strong leader but an asshole to your team (or your customers), they will eventually leave you because, well, you’re an asshole. You need to find a balance between nice and effective for your team (and your customers) to stick with you in the long run. A safe bet is to tell yourself you can be as nice as you want, so long as you have a strong growth rate to show for it.
Be wise and value every dime
When you’re starting out, there’s little money around and a lot of work to be done. As a startup founder, it’s important to be resourceful. We were bootstrapped for three fucking years before we raised our first round of external capital. Sameer and I wrote the first pieces of code for Crowdfire before hiring more people. We wanted to make sure we knew why we were hiring and who we were hiring. Without working on a job profile, it’s really difficult to hire. For a long time we made it a rule to first do the job ourselves before hiring someone for it. We hired admin, finance, HR, content, community, marketing all by first doing it on our own and then looking out for someone smarter to take over the work.
You shouldn’t shy away from giving new responsibilities to people. Make sure that even when your team grows, someone in your organisation is already working on the job profile, and has reached a stage where they need someone to take a part of their work away. This way you’ll be using your people effectively. The alternative; bloating your team and then going on a layoff spree, doesn’t make much sense.
Invest in a good team first — not perks
In the early stage of your startup, you need people who are willing to join you regardless of the perks. We didn’t have so much as a couch when we started out and yet people were motivated to work with us. Once you have enough traction and you’re moderately successful, by all means, reward your team accordingly. But don’t make perks the main selling point for prospective employees.
I see many companies promoting their perks to get people excited about working there. I don’t see perks as a talent magnet but as a way to enhance the talent that already exists. When you have smart people working with you and you want them to focus on work, make sure you give them everything they need.
Perks are good and the ROI is increased productivity
While they shouldn’t be the first thing on your to-do list, perks are great to have, and once your company reaches a certain scale, they become a must-have. Perks can help smart people work better and stay more productive because they remove distractions and unnecessary decision making. But that does not mean that you should invest in perks at the cost of not being able to run your startup successfully.
How much should you spend on perks? We don’t have a formula per se but during the bootstrapped days of Crowdfire, perks constituted about 5% of our revenue. There were a few high-priority perks when we started making money:
- Office space. We used to work out of a residential apartment and while it was fun, it had its downsides. Not everyone will feel secure enough to work for a startup that’s operating out of an apartment. Apart from that, a lot of residential buildings in India (and elsewhere I’m sure) don’t love when people turn their homes into offices. We actually had to move out of one apartment because the building found out we had made the apartment into a workplace. Getting into a real office was a top priority.
- Proper chairs and desks so that the health of employees is not neglected. The moment one person hurts his/her back and falls sick, you lose productivity. Both the company and your team member suffer.
- Food in the office. During our early days, we had to order food every day for about a year and it was huge pain. The point of having free food is that it cuts down on daily decisions like deciding what and where to eat.
- MacBooks. We believe that the best people need the best tools to build something amazing.
- Accommodation assistance. We have always encouraged people to stay close to the office and help people with relocation so that they don’t have to spend time travelling.
Make sure you’re fucking great at what you do. Only then can you lead
Remember: running a successful startup is not a sprint where your responsibility as a founder is over as soon as you have a good team. On the contrary, the more people you hire, the more effort you’ll need to put in. When you’re working alone, no one will judge you or compare you with someone. But when you start hiring people, you need to learn more, become smarter and keep yourself informed. You have to be at the top of your game. I’ve seen founders becoming complacent, thinking that they know everything and all they have to do now is to lead people. But you cannot lead people unless you’re constantly learning and improving yourself.
I guess that’s it for now. Good luck!