Top 5 Mistakes Pre-Seed Founders Make with People Ops and Hiring
In this guest post, Matt Bradburn, the founder of our external People & Talent partner, People Collective, takes a deep dive into the mistakes pre-seed founders make with People Ops and Hiring and shares tips to avoid common pitfalls.
It all starts with the genesis of an idea, a plan for a product, and a route to market in mind. You’re going to change the world, or solve a problem that’s annoyed you for years.
Building product and GTM present their own challenges, but they’re well worn paths to work through.
Unfortunately, these are not the only challenges you need to bear in mind, and one folks often forget is:
💡 The process of building a winning team to help you succeed, with the foundations to support them.
Without your people, you have no product, no sales, no CS, no marketing, no money. This doesn’t mean lots of people, headcount is a vanity metric, but it means the right people, set up for success.
Overlooking this leads to some common and avoidable mistakes.
I will use this blog to identify the common pitfalls and give some ways of rethinking your approach. This helps you avoid building up ‘people debt’, a concept we’ve spent a long time researching and solving at The People Collective.
What is people debt?
- The growth of teams, departments or the whole company by default, not by design, causing a debt to build up.
- It happens when leaders take EASY decisions over the BEST decisions to “just get it done”.
- Or when they don’t make decisions at all because they think “if it ain’t broke, don’t fix it”.
- People Debt ends up being a high interest loan taken out against an ideal future state.
- These wrong decisions or indecisions accrue a Debt to the company and make it unstable when this Debt cannot be ‘repaid.’
- It shows up through slow decision making, poor alignment, poor communication, retention issues and slow growth.
So here are the top 5 mistakes which cause people debt, and some solutions.
Mistake 1: Hiring for the wrong attributes
The need for speed often causes founders to jump headfirst into hiring, without being clear about what they’re hiring for. This lack of clarity leads to a disjointed team. Attitudes and behaviours are the hardest thing for you to change in an employee. Often founders aren’t clear on the attitudes and behaviours they want to develop within their company.
The Fix:
- Before hiring, spend time outlining your early vision, mission, values and attitudes. Start at the top and work your way down.
- Think about what you care about — your ways of working naturally cast a long shadow.
- You also need to SELL your vision. The labour market is tight. They have options.
- These will then guide your hiring decisions and help you attract individuals who share your passion and goals.
- Hire for those first, then skills and knowledge second.
- This will also help your early hires understand what’s expected of them outside of goals.
- Culture isn’t defined by any single person, it’s the behaviours, attitudes and actions you allow as a collective, and it starts with leadership. Ultimately your culture is defined by the things that you’re willing to hire and fire for.
💡Try to avoid gravitating towards the big company name, or education. Shiny CVs are no measure of early stage startup success. It’s an easy way to overspend and churn.
Mistake 2: It’s not just what you hire for, it’s HOW you hire for it
As we mentioned, the need to hit milestones and create rapid growth can push founders into hasty hiring decisions. The result? Misfits that drain time, resources, and energy, causing more harm than good.
But it’s not just what you’re hiring for, it’s HOW you approach the process. The stages, the way you interview, the speed of response.
It’s an expensive mistake to make.
The Fix:
- Consider each hire as a long-term investment. It’s better to operate with a smaller, competent team rather than rush and compromise quality. Particularly in the current financial climate.
- As you grow, dept heads and managers will sometimes try to show their value through their team size. Always push back…
- A quick way to win at this? Define clear outcomes, responsibilities, and expectations upfront. Ensure your managers and leaders have to do the same.
- Then train your team on how to interview for these attributes. A little upfront effort pays dividends.
- Be clear on your budgets. Get some benchmarks, build a simple compensation philosophy. This ensures a clear and reasonable offer process. Don’t overpay for the sake of it.
- From there, be clear on the process you need, and iterate as you go after each role, not during a hiring process.
- i.e. don’t give some candidates a take home piece and have others miss it.
- Reply to candidates quickly, always — that reputation damage when you don’t can hurt.
- Try to have folks come and meet in person if you’re a hybrid or office team.
- Don’t add surprise interview stages.
💡 Additionally — DO NOT GIVE OUT BIG TITLES TO APPEASE CANDIDATES — it will bite you later, every single time.
Mistake 3: Not communicating clearly
Startups are chaotic, fast paced and filled with ambiguity by nature. This means your team will struggle without clear, consistent communication. Not spending time on this can lead to confusion, poor decisions, and retention problems. In particular, folks really struggle with a lack of expectations at all levels.
The Fix:
- Context, context, context. High performers have a much better chance of thriving, as long as they know the context.
- Instead of telling your sales team to target Mid market CFOs instead of SMB CTOs, tell them:
- “The reason we’re changing our target customer from X to Y is because Z data showed A,B,C”
- Aside from context, it’s about consistency, bringing some organisation to the chaos. Put in place just enough catchups, one-on-ones, and all hands. Think about what information goes on Notion vs Email vs Slack.
- Hold yourself AND your team accountable for communicating well.
Mistake 4: Burning out their team
The hustle culture often drives founders to demand long hours and high commitment levels. While dedication is a necessary evil, pushing too hard can lead to burnout and high turnover. Try to remember that although it’s your baby, your team are “nannies” not “co-parents”. They don’t have the same skin in the game.
The Fix:
- Foster a culture that values and promotes work-life balance.
- Encourage time off, regular breaks, and sensible working hours.
- Your team’s physical and mental health impacts their productivity and decision making.
- Pushing people to breaking point degrades individual, team and company performance.
- Have regular check-ins to gauge team morale and stress levels.
- Encourage open communication about workload and give support to prevent burnout.
- Happy, healthy employees are more engaged, productive, and likely to stick around longer.
- Communicate when pinch points are going to be coming up.
💡 Take breaks yourself — you have to model the behaviour you want to see.
Mistake 5: Not planning out their equity pool well
Talking of skin in the game… In the early days of a startup, equity distribution can seem like a daunting task. Founders often distribute equity without a proper plan. This leads to; a messy cap table, differing terms for different employees, agreements filled with legalese etc.
We’ve had to come in and help companies fix this plenty of times, and it’s hard to untangle.
The Fix:
- Proper equity management requires a careful balancing act.
- You should aim to attract top talent with a competitive package.
- You also need to retain enough equity for future rounds of funding and hiring.
- Keep in mind the trade-offs between equity and cash compensation.
- Take the time to establish a simple structured equity plan early on. Think about how you will grant and segment.
- Everyone? Everyone the same amount? Some teams more? Vesting schedules? Refresher grants?
- Then most importantly, work out HOW you will communicate this to the team — the mechanics, value, glossary etc.
- Many folks will not understand how equity works and the potential value.
💡 You have to find a way to make this happen. If they see no value, it’s not a long term incentive.
To sum up…
The journey of building a startup is an exhilarating rollercoaster ride and there are no guarantees of success.
However, by understanding these common mistakes, you give yourself a much better chance.
Hiring for the right attributes, taking time in the hiring process, communicating clearly, maintaining team wellbeing, and effectively managing your equity pool are foundational elements to building a strong, aligned and focused team.
Remember, your team is your startup’s heart. They’re also your biggest expense. As a founder, you need to balance these forces.
💡 It’s not just about numbers on a payroll; it’s about the right people, in the right roles, with the right mindset, set up for success and ready to stand alongside you.
Invest time and effort in developing your people operations strategies as you grow.
Be intentional and you reduce ‘people debt’, speed up decision-making, improve alignment, boost retention and supercharge growth.
Your people are your greatest asset; so invest in them and it will pay dividends, many times over. Quite literally.
Finally, remember, you’re not alone. Reach out, seek advice, learn from others’ mistakes and share your experiences.
Matt Bradburn is the founder of our external People & Talent partner, People Collective.
