Part 2: Founders, Do You Need An Early Business Hire?
Our previous post discussed how defining the role of “hustler” will benefit founders as well as potential employees. We’re calling this role: “early business hire” (EBH).
To get a sense for what is currently happening in the market, we talked with 30+ startup CEOs and found that more than half had hired for this role. Most founders made the hire without scoping or posting a job rec. We also learned that this position was key to the early success of companies like Gigster, Gumroad, Omni, Pocket, Product Hunt, Pulse, and Uber.
So there’s a role that is critical to the success of a startup, and yet founders aren’t defining the expectations. Seems like there must be a better way.
What does an EBH do, precisely? They work alongside the founder to bring customers to the product and distribute insights to shape the direction of the product.
If you’re a founder and thinking about hiring for this role, you have to start with a clear definition of what your company needs. Do you really need an EBH, or would it be more beneficial to create a traditional sales or marketing position?
The answer to this question depends on three main factors: (1) your company stage, (2) your founding team composition, and (3) our business model.
Company Stage
While an EBH could be appropriate pre-funding, the gap between seed and Series A is the critical time when this hire can amplify the traction efforts of the founder.
For context, raising a seed round is common. According to Crunchbase Pro, more than 4,000 companies in the United States have raised seed rounds since 2014.
Getting to Series A is much harder.
Lack of traction causes a dramatic drop-off between seed and Series A funding. While your product, market, and team can land a seed round, you can only land a series A with metrics.
To make it to Series A, your company needs proof that it’s solving a problem that lots of customers will pay for. An Early Business Hire can help accelerate your learning by doing the following:
1) Driving users into your product
2) Help you gather and communicate customer learnings back to the product and engineering teams
3) Taking work off your plate to help you focus on 1 and 2
If you’re post-Series A, you’re likely moving into scaling mode. At this point, there’s value in hiring functional sales and marketing experts to build out teams. If you already have an EBH, they may move on to figure out emerging functions like operations or specialize in sales or marketing under the incoming director.
Founding Team Composition
The members of your founding team will need strong product vision, the technical expertise to deliver on that vision, and the business expertise to bring it to market. These competencies are normally broken up between/among 2 to 3 people.
If you’re going to bring in an EBH, it should be to amplify capabilities that already exist on your team.
Put another way, it is critical that someone on the team has sales and marketing skills. Hiring an EBH into a startup without existing business leadership is a recipe for disappointment. If you’re in this situation, you should be recruiting a founding team member.
If you do have a business-focused founder in place, your EBH can amplify the efforts of the founder and innovate along the way.
Business Model
Your business model will also help you determine whether an EBH makes sense.
If you’re a marketplace business, an EBH can use growth skills to build the demand side and sales skills to build the supply side.
In an enterprise B2B company, the founder should close initial deals but an EBH can support by prospecting and qualifying leads. As your hire learns the business you may pass along more functions like content marketing or account management.
If you’re in a pure B2C market where you will never generate meaningful revenue from direct selling or partnerships, an EBH may not make sense. In this case, a specialized growth marketer will have a more appropriate skill set.
Key EBH Functions
An EBH is unlikely to be an expert in any one area of the conversion funnel. Rather, they should be well versed enough in each area to ensure they win and retain customers. To accomplish this an EBH should leverage technology to turn the work of an entire sales and marketing department into a job for a single person.
What an EBH spends their time on from week to week is a function of the problems your business is currently facing. Are you spending too much time managing accounts? Do you need someone to help you run sales experiments? Trying to put together and implement a content-marketing strategy? An EBH should be able to learn fast enough to pick these things up to help you better leverage your time.
Typically companies make two key mistakes in the seed stage:
- Not putting enough effort toward acquiring customers
- Spending too much time on urgent vs. important tasks
Many early-stage startups are over-indexed on product and engineering and under-indexed on go-to-market. This leads them to over-invest in product and underinvest in distribution, which leads to lots of product and no market. This leads to failure.
Pause. How much headcount do you currently have on product vs. distribution? Are you spending enough time & resources developing your market vs. developing your solution?
Another challenge is spending time on the right activities that move the company closer to product-market fit . Founders are bombarded with urgent tasks that demand to be completed now. Working on these tasks means putting off the important ones. Your EBH should help supliment your efforts in to ensure that important work gets done.
An EBH should also be building processes and playbooks along the way to optimize output and allow you to onboard new team members.
From a culture standpoint, this hire is someone who will embody the founder’s ethos and can infuse it into the marketing and sales teams as they grow. This is someone who you can tap to lead new initiatives and who will always have comfort with ambiguity
Ok, I need this. How do I hire?
Stay tuned for our next post about how to hire for this role.
Tradecraft has helped 300+ smart, motivated people join the startup world. We’ve helped people from JP Morgan Chase, McKinsey, the U.S. Air Force, The World Bank, Google, Yahoo, etc. transition into roles at Clever, Doordash, Dropbox, Facebook, Medium, Optimizely, Segment, Uber, Udemy, and many up-and-coming startups. If you are interested in working with us, drop us a line.
