First Hires / First Fires: major keys🔑
OMG! You are ready to transform into a boss and make your first hires. Congrats! Building your team of early employees is a monumental moment for your startup, or in the words of Dj Khaled major key. It will set the ground stone for your company culture, help you understand what kind of leader you are, and want to be, as well as fuel company’s growth.
There are a lot of things to take into account when hiring your early employees, from the economics of building a team and finding the right “cultural fit”, to when to fire someone and how to attract the best talent. But more often than not the major key is managing day to day relationships and balancing cohesiveness and diversity within your team.
🔑Key: Make sure you truly understand the economics behind it. Don’t be shy to ask around. You will be the one that will have to explain equity options to prospective employees. It is your ethical responsibility to be sincere and transparent about this topic, when someone, especially if they don’t have experience in the startup scene, joins your team. They should know what they are in for and how their compensation relates to the company’s and their department success. Investors will also want to know what’s your equity pool, as dilution for more options can affect the true price of your round. You can read about early employee equity at Founder Institute: https://fi.co/posts/885, Brad Feld’s post on Equity Compensation Terms or follow Fred Wilson’s Skillshare class. If in London on the 11th of February join us for First Hires/First Fires event and ask away David Norris from Forward Partners any Qs you may have.
🔑Key: Don’t be cheap. Having a great company culture doesn’t mean it’s ok to hire people for peanuts, because being cheap isn’t part of a great company culture. I can’t think of anyone that would be understanding that you can’t afford to pay them a decent salary, or discuss other forms of compensation, yet you can afford taking the whole team for go-karts, dinner and unlimited drinks on company’s bill every Friday ’cause “culture”. NO. STAP IT.
Value your employees and if you can’t afford someone at the time be transparent about it and discuss alternative ways to compensate them, as well as when and how you expect things to change according to your strategy/projections. Sometimes you can get more than what you can pay, but you never get more than you value, at least not for long. More on the topic by M.Suster on Don’t Roll out the Red Carpet on The Way Out The Door.
🔑Key: Who should be your first hire? You hire people in order to remove yourself from the day to day operations, so you can focus on growth and building up your business. This means you should prioritize hires that have to do with execution and product. You should make your first hire as soon as you can afford it, someone with better skills, someone willing to punch above their weight.
In the beginning it’s best that you keep the customer facing role, as you are still discovering how to best serve your clients. It will help you crystallize your vision and communicate a clear strategy on product development. Don’t hesitate to outsource mundane office tasks to save time, but don’t use outsourcing to cover key roles like a software engineer or customer service, because they may won’t be available at a time of need, as Harry’s CEO shares in his experience.
🔑Key: Are they a good fit? Best way to find out if what’s on paper translates to real life, as well as make sure if you have the same work ethos, is to actually get to work with someone. This though, doesn’t mean you get people to work for you for free in order to “test them”, or pick their brains, keep some of their ideas, and sent them off. Give a very short task, the point after all is to see how they approach and tackle a challenge. Another way would be to follow the Zuckerberg approach and ask them to set a task for you. In any case be respectful of their time, word gets around. If you don’t respect a prospective employee, that is a surefire sign that you won’t respect an existing employee either.
🔑Key: Trust the people you hired to do what you hired them for. It sounds simple, and you may be looking forward to unloading some work volume, but you’ll see that in action it’s difficult to switch gears. Clearly communicate your overall strategy and then collaboratively set measurable goals for each team. The more transparent your company is about who is responsible about which task, what’s the end goal and how you measure success the less drama in the office kitchen. And nobody wants drama around their food, apart from the Real Housewives.
🔑Key: Build a diverse team from day one. Having a diverse team, improves your startup’s survival chances as it can prevent you from resorting to unethical practices and keep your performance on flick. It’s easier to grow an already diverse team of five in a balanced way, rather than postponing dealing with diversity till you go public like Facebook or even worst, Twitter. Embed diversity in your company’s DNA right from the get go. It’s not just good for society, it’s good for business too.
🔑Key: Communicate. Yes, startups are super fast paced and things change in the blink of an eye. Yes, when you work for an early stage startup you take a lot of initiative and self-define your role most of the time. No, you can’t expect anyone to finish first if you don’t even tell them where the finish line is. Make room in your calendar for an Onboarding Process for new employees. Talk about your company’s history, culture, strategy and agree on specific goals for the tasks they are responsible for, as well as clear KPIs for these tasks. When there is a change in your strategy, communicate it clearly, discuss it, and leave room to adjust, don’t pull the rug under your employees every time you have a chat with an advisor or investor. Don’t cancel meeting after meeting with your employees, because they are part of the team and they should understand. If you have to cancel, be polite about it. Your team and your customers are way more important than X, Y , Z tech VIP, so be considerate and respectful of their time. Incorporate their feedback into your overall strategy, they don’t report to you, just so you can feel boss, the point is to move the company forward through collective work.
🔑Key: Loyalty You don’t want your company to be a revolving door, because it is costly, it’s bad for morale and it makes it super hard to build a solid culture. People choose to work in a startup, because they want to be members of a great team and work with you, not for you, to build a company they believe in. Show them respect, value their contribution and make sure to fuel their personal growth within the company. Talk with your employees about their personal goals and find ways to tie them in their work or their incentives. To get loyalty, you must give loyalty. If an employee makes a mistake, don’t be passive aggressive, talk about it and trust them with rectifying their mistake. Perks are a great way to express company culture and show appreciation for employees’ contribution, but loyalty stems from respect and self-fulfillment in day to day work life.
Last but not least: Always Be Recruiting
🔔 We will talk about all this and much more at First Hire/ First Fires: building a solid and diverse team of early employees, at The Rainmaking Loft, London, on the 11th of February, so book your tickets NOW! 🔔
Leave any Qs for our amazing speakers in comments please!