One question can make or break you as your startup grows. What are the building blocks of your company’s DNA?
This question won’t be answered by a “brand guide” or “mission statement.” Your DNA as a company has one ingredient: the people you hire.
In the early days of a startup, it’s all too easy to make hiring mistakes. You hire too quickly because you’re ambitious and eager to scale and just need to get warm bodies in seats. But just as good hires can reshape your destiny, bad hires can sink you.
The truth is: If you hire the wrong people, your startup is probably going to fail. That sounds dramatic until you consider your business is not the product you sell or the sales process you design—it’s the people you hire.
As a startup, you don’t have the luxury of making too many hiring mistakes. The progress you make each month matters more than it would for a more established company.
Here are a few thoughts on finding the right people to give your startup the strength it needs to succeed in the long run.
Who Should You Hire for an Early-Stage Startup?
The first hires in your startup aren’t going to be specialists. There is no Senior Vice President of Strategic Analysis and Future Planning. If your company has ten people, a single hire is ten percent of your company. You can’t afford specialists at this stage.
My suggestion? Hire generalists instead. Find the people who can wear multiple hats—because they will likely have to get comfortable with those hats before you start scaling.
In the early days, your hires should probably fall into one of two categories:
- Someone who builds the product, whatever that product might look like.
- Someone who sells the product, whatever that strategy might be.
The hardest part of executing this basic strategy? The idea might go against your instincts. It sounds too simple. You’ll tell yourself that the best hires have to be more complicated than that—but no. You’ll probably make better hires the simpler your process is.
In your startup’s earliest days, you need generalists. You need flexible, adaptable, multi-skilled people who can handle the uphill climb every startup faces. Hire people who can thrive in chaos.
After all, your initial business ideas might not resonate with your ideal customers. You may have to pivot, adapt, and change several times until you even come close to achieving product-market fit.
At the earliest stages, before you know what you’re doing and what you’re all about, your hires need to reflect this ability to roll with the punches.
Who Should You Avoid Hiring at This Stage?
I see it all too often: startups get excited and then quickly get ahead of themselves. Rather than focus on big-picture questions (“What’s our minimum viable product to generate revenue?”), they focus on process. They hire CTOs and heads of HR without knowing what their business will look like in a year.
The head of HR might be perfectly capable—but do you really need a head of HR, or do you need a savvy, fast-paced recruiter who is passionate about your startup? Do you really need a CTO right now, or do you need a scrappy 10x engineer who is motivated to build your product?
Ideally, you should think about how each new hire fits into a quadrant—a diagram with four boxes:
- Unwilling and incapable: The people who lack the skills and the self-starting motivation to learn on the job. Avoid these hires at all costs.
- Incapable but willing: Not ideal, but a step up. Your startup should be picky about the skills you hire because you likely don’t have the time or budget to learn skills on the job.
- Capable but unwilling: A skilled employee who’s not all that invested in your long-term plans. They can be advantageous hires in the short-term, but may not be the “pillar” employees upon whom you can build a startup.
- Capable and willing: Locked-in, experienced, and highly skilled. The sweet spot.
Generally, startups should trend towards the willing half of the quadrants. You’ll want self-starters. Hire people who can do well if you give them a lot of autonomy. After all, you won’t always have time to supervise, train, or micromanage people at this stage.
Avoid hiring people who need a lot of structure and formal processes. If a new hire needs to inherit a process or handbook, they’ll require a lot of guidance and they’ll only slow you down.
In your startup’s early days, the entire purpose of hiring new roles is to remove something from your plate. If you’re too busy managing a new hire’s day-to-day responsibilities, you’ve only added work to your plate.
Luckily, some people are so excited and thrilled by a lack of structure and a lack of process, that when you hire them, they help the company find its footing, uncovering the most successful path the company has to take. Those are the people who will thrive at a startup.
How Do You Evaluate Candidates During the Interview Process?
In my opinion, you should focus on three main buckets:
- Company culture. Culture is nothing more than the sum of the people involved. What kind of people do you want at your business? Ambitious, self-starting go-getters? Will you tolerate a brilliant asshole? Remember that at your startup, you may have to spend long and frustrating days with these employees. Their mindset is going to rub off on your company and, one day, become your culture.
- Team building. You’re not just recruiting individual contributors, you’re assembling a team. Sometimes, it may be better to hire someone who is really great at a few skills—but lacking in a few others—as long as the rest of your team is really excited about the skills they do bring. If they’re eager to learn and close those skill gaps, it can be worth taking a chance on them for the greater good of the team.
- Core values in hiring. This is a concept that deserves its own post. But it ultimately comes down to what skills, talents, or traits your company values. And it’s not always about a qualification on a resume. To quote the first job posting at Amazon: “Familiarity with web servers and HTML would be helpful but is unnecessary.” The value Amazon did hold, however? “You should be able to [build large and complex systems] in about one-third the time most competent people think possible.” Their values were speed and competence. Think about what yours are.
To determine your values, ask yourself a simple question: What is your company’s DNA? What you value will eventually form that DNA.
For now, focus on key questions about your culture fit:
- Do you trust this person? This isn’t about security but a sense of delegation. If you were sick for a day and had to hand over the keys to this person at your startup, would you feel confident that they’d take those keys and keep things moving forward?
- Are you genuinely excited to work with them? After all, you’re going to have to see them every day. If working with them seems like a slog, it might not be a fit. The chemistry needs to be right, or it might affect everyone’s motivation.
- Could you work with this person for a decade? If you wouldn’t work with someone for 10 years, don’t work with them for a single day. Yes, it’s as simple as that.
Common Hiring Mistakes First-Time Founders Make
Hiring Simply Because You Think Work Will Pick Up
One of the key traits of any successful startup is adaptability. You need that even more than you need scalability, which you should consider only once you see signs of product-market fit.
Before then, you need to be ready to pivot, move around, and adjust to whatever the market tells you.
Avoid hiring simply because you think work will pick up down the line. You don’t want to hire people anticipating more work in the future.
What if you over-hire sales reps to accelerate your outbound efforts but later decide that your go-to-market strategy was wrong and now requires a different approach? Letting people go is never easy, and it’s certainly not good for your startup’s culture in the early days.
Keep your team lean if possible. Great startup employees understand the challenges and risks of being on a small team and are usually willing to stretch a little more before deciding they need help.
Hiring People Who are too Specialized
Remember: you want generalists. When you hire people who are too deeply specialized in one skill or another, you’re essentially placing a bet: you believe that skill will be critical to your startup’s success. And you don’t know that yet.
What if you need to pivot to a different aspect of your business? What if you planned on building a sales-as-a-service business, but what your customer actually wants is access to the CRM you’re building? (Yep, that happened to me.) Hiring specialists is going all-in on one skill. Hiring generalists is a bet on adaptability. Take the one with the lower risk.
Not Making the Right Hires for Culture Fit
I get it: When interviewing prospects for an open position, it’s easy to be blown away by how impressive some people are. They may have spent lifetimes developing skills you never dreamed of.
The problem occurs when you let this temptation cloud your judgment. What if they’re highly skilled and talented—but more of a fit at Alphabet or Apple than at a startup? You could make a costly mistake because you were swooning over their pedigree. Find the right fit for you.
Waiting too Long to Cut Someone From Your Team
I’ll admit that I’m not perfect at hiring. I’m a big believer in hiring the person who’s a little too junior for the role—the go-getter with loads of potential. I’m a sucker for the underdog. But that sometimes means I become biased in their favor, which can affect how I evaluate their performance.
If an underdog becomes a perpetual underperformer, it can feel like I’ve boxed myself in. The hire only hurts the team—and you can't afford that at the early startup stage. No founder or manager likes to rip this particular band-aid off, but ultimately, cutting a bad hire loose will be best for both parties.
How to Retain Startup Employees for the Long Haul
A good startup hire is just the beginning. You also need to keep those rare superstars before a big company snags them up. Those core professionals who fit in the “capable and willing” quadrant will be worth their salary and then some—so it’s worth figuring out how to retain them. My advice?
- Adopt a people-first attitude. If you focus on the quality of people you hire, then the people you hire will simply enjoy working at your company more. You’ll have fewer underperforming employees and a healthy team atmosphere. Your company won’t be the plans you make—and it won’t be the pitch decks you assemble. Your company is only the people you hire.
- Build a positive, trustworthy company culture. Hire people with solid character—people who value integrity and cooperation. You might not be able to evaluate this with perfect accuracy from interviews alone, but when you see someone failing to earn the trust of their peers, take action quickly. Let them go before they poison the well for the rest of the team.
- Enforce high standards. There’s an old saying: You default to the level of your standards. If you want to keep those standards without losing top talent, you’ll have to bring in people who can elevate your team, not just fill an empty seat. Don’t hire too quickly at first. It will only make it more difficult to enforce those standards.
- Create a path for internal career growth. Small startups can’t always offer huge paychecks to their early employees, but they do have one advantage: career growth opportunities. If an employee joins as Employee #5 and the company takes off, they can have a steep career trajectory if they grow with the company. For example, Nick Perisco started working with us at Close in 2012 as a sales rep, eventually becoming Senior Director of Business Operations 12 years later.
Find the Right People at the Right Time
Startups have to be careful about the culture they’re building inside their walls. Be disciplined with your hiring practices and don’t compromise on the qualities you’re seeking.
Set a high standard, figure out what makes your culture tick, and go find people who not only fit your culture but also add to it. Just as importantly, don’t be afraid to say “no” to people who might look great on paper but raise doubts for you and your team. Trust your instincts and take action quickly on your hiring mistakes.
If you hire the right people, your startup will be successful.
