What Matters for the First Hire?

As a startup founder, you’re making decisions on a daily basis. Some decisions will have long term implications and others are short-term operational moves. Use all your resources and make quick, informed decisions. Minimize your risk and act fast on the elements of least consequence. Invest more time in those with long-term effects.

One of the most consequential decisions is the first hire outside of the founding team, and there’s a lot to consider from both sides of the table. As a former first hire, I wanted to share some notes that I hope are useful to both founders and first hires:

Skill-Gap
First thing: what skill-set is missing from the company? Think of it as a ‘minimum viable team’ to build and ship a product that demonstrates your value and affords you the ability to iterate. If you’re two PM founders, who’s selling? Can you get where you need to be on outsourced development? On the flip side, can a strong engineering team get the first version into market on their own?

To First hires: lookout for the same blind spots. Who’s doing the building? Who’s guiding the product roadmap? Who’s selling (the vision, investors, customers, etc)?

There are many permutations of this and all parties should have a strong opinion on what absolutely matters. Plug the biggest gaps first with adaptable talent.

Gallons of Kool-Aid
Why this company? What’s aspirational about the mission? Why does it matter? Buy-in is critical for a young startup.

Early hires aren’t just someone to take the load off, they’re bringing a whole new perspective and personality into the fold. Founders might have a partially baked dynamic and rhythm by the time they’re ready to bring in a full time hire. Both parties are going to be spending a lot of time together and it’s important for each to recognize what that entails. A first hire should set the precedent in creating diverse points of view. You want a fresh brain, but paired with a soul that believes in the mission.

Consider that your early customer base and community are often correlated with the first hire. The early team has to be ruthlessly engaged, while tolerant of missteps and iteration.

Role-Definition:
Adding headcount will divide up labor, but where are those lines drawn? How much capacity does everyone have? Most good early hires are hustlers with a ‘whatever it takes’ attitude (focus on priorities, plug holes in the dam, step in for fire drills). At the early stage everyone is spread thin, but too thin means that everything is… merely fine, nothing’s fantastic.

Come together on long-term goals and define the KPIs to get you there. Don’t shy away from the details: “How long should we test? What constitutes a tactical success/failure? When do we evaluate?”

Other opportunities always arise but consider if it fulfills the core goals. If you get too distracted, you overextend your capacity. Early hires need to manage-up to founders when they’re being stretched thin, and founders need to keep everyone zeroed-in on goals.

Compensation:
My guiding principle for comp is this: Try, best as possible, to avoid a situation where your first hire is distracted by the thought that they’re undervalued.

There’s a balancing act between salary plus equity, with regard to employee worth. I’m of the opinion that early hires should be apprised of the full funding situation. Find a place of equitable comfort for all parties. Each side will have to give a little and the conversations are easier when each individual agrees that the other is coming from a place of good intent. That said, this conversation is moot without the next area:

Commitment:
For an early stage startup, the business is on your mind night and day. This will wear everyone down, both founders and early hires. Make space for breaks and time-outs (you have to), but consider the larger questions of full commitment:

Do you have it in you? How long will you tolerate the ebbs and flows of uncertainty? Commitment is tough to measure but it’s a conversation that’s important to have between founder and first hire. Founders can’t afford to lose the investment of time in a person, and first hires should be able to count on a founder who’s in for the long haul, or can communicate a clear exit goal. Each party should understand the other’s motivations and level of devotion. Root your conversations in transparency and building trust — that foundation will serve everyone’s success on the whole team.

Best of luck in your decisions!