Building High Potential Start-up Teams, With Derrick Fung
What truly makes companies click? Who do you need to hire to succeed?
Derrick Fung (@fungmoney) is a cofounder and CEO at Drop. He previously founded and sold Tunezy (acquired by SFX Entertainment), a social record label start-up, and worked at Merrill Lynch and Microsoft. Now, he’s leading Drop, which announced a $25.8M Series A in January.
Here’s Derrick:
What truly makes companies click?
It’s the people. Over the years I’ve learned a lot about how you should hire, and what potential employees should look at when they’re looking to join an early stage company.
There’s three main stages of a company: the idea stage, the product stage, and the scale stage.
Phase 1 — Idea
You need people that just believe in you. They can be your best friend, they could be someone you literally find off the street.
Our first employee, Min — I had him on Facebook, and one day he randomly reached out to me and said, “Derrick, I know you’ve done this before. If you’re doing something again, let me know and I will literally show up in your living room every single day.”
I met up with him for a drink and was like, “Min, tomorrow morning I’m going to leave the door open in my living room. If you’re actually not joking, I should see you there.”
I kid you not, I wake up, open the door, and see Min. I’m like, “How did you get in here?”
You need people like Min because starting a company is really hard.
At the early stages when you’re just an idea on a napkin, you need people who can do everything. Take out the trash, write code, go pitch — whatever you need.
Phase 2 — Product
You need builders and product evangelists. Builders are your engineers. You want to hire the best engineers at the earliest stages. Most importantly, engineers that can take critical feedback, and are vulnerable, where you can go to them and say, “Hey, this feature is crap, let’s fix it,” and they won’t take offense.
The next type of hire you need is a product evangelist — people that will actually use your product and will give you feedback for that product.
My example is Kevin, our head of product. One day, I’m walking my dog by my condo, and he’s like, “Oh, Derrick, Drop, right? I use your product all the time. I mostly like it, but there’s this one feature, I think it’s pretty crap, …” And so on.
I was like, wow, I should hire you. So, we went for lunch and a week later he started at our company.
If you’re building a dog food product, you need to find people that will eat your dog food. Yoga pants companies, you need to find people that will wear your yoga pants. You need to find people that will actually use your product and give you feedback for that product.
Phase 3 — Scale
You’ve had the idea, you’ve built the product, you’ve raised a bit of money. You’ve launched it, you know it costs you five dollars to acquire each customer, each customer is worth 20 dollars. Let’s just keep pouring gas on that fire and scale.
You’ve hired a lot of people that’ll just build, build, build. You need strategists that come into your company, take a step back and say, “Wow, awesome what you guys did, but have you thought about this? Have you thought about applying Porter’s five forces?” People like that, to give you a different perspective.
Then, you need the corporate rebels. At this stage you can finally afford to hire them. They’ve worked at banks, they’ve worked at consulting firms, they’ve learned within the big companies. “Hey, I’m at a roadblock within this company. I see the potential of your startup. I want to join.” It’s like Jet.com hiring someone from Amazon or Walmart.
I’ve done a lot of big companies. For those considering leaving and joining a startup, it’s not easy. It’s all about finding the right culture, finding the right fit.
I never regret that decision, leaving CIBC in 2011. It’s been one of the best decisions of my life.
Feel free to tweet at me (@fungmoney) with any questions you might have. We’re hiring aggressively.
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