Startup Hiring: Finding the Right People at the Right Time
The people you hire can make or break your startup—especially in the early days. Making the wrong hires can result in lost time, money, and huge setbacks you can’t afford. Startups need a special breed of talent and if you find the right people, you can build a business that innovates more, moves faster, and catapults your growth. In this episode, Steli shares what to look for when making your startup’s first hires.
Desiree: Hi everybody, Desiree Echevarria here, joined as always by my personal life coach, Steli Efti, founder and CEO of Close. Today, we're going to be talking about hiring the right people at the right time for your startup, because the people you hire can make or break your startup, especially in the beginning. Your hiring needs are going to change as your business scales, but it's so important to get it right, though it's so easy to get it wrong.
Desiree: Steli, since you've hired about a billion people in your life, I wanted to pick your brain about what founders can expect if they've never hired anyone before or if they've only hired a few people before. My first question, square one: what are some signs that it's time to make your startup's first hire?
Steli: Well, I would say having too many customers to support or too many people interested in buying your product and wanting a demo or to negotiate a contract. Having real work—what I would call quote-unquote—like work that has to do with the usage of your product, where it's scaling, and the servers are breaking down. You can't keep up with all the feature requests from people actually using the product. Having a lot of success or success-based work is a good sign that you should hire some people to deal with all that work.
Steli: That's simple, though. Nobody mistakes that. When that happens, everybody knows they need help and need to hire people to assist them. I think it's when that success isn't quite as explosive that people make the mistake of being either a little too early or a little too late.
Steli: So, I would say, in my career, I've always leaned more towards being a little too late, and that has served me well, although it can be very frustrating. But I'd rather hire a little too late than too early. I think hiring too early can cause all kinds of problems that might really get in the way of any future success.
Steli: You don't want to hire people anticipating work that's only going to be an issue once you've had success, especially if you're nowhere near that success. Sometimes I see startups with a head of HR, CFO, and other roles, and they don't even have a minimum viable product yet. They haven't launched anything, have no funding, just some dude with a PowerPoint presentation, saying, "Well, I assembled a team." And it's all kinds of positions that you don't need to either build or sell what you're doing. In the early days, if people aren't building the product with you, they should be selling it. If they're not doing one of these two things, they probably shouldn't be there.
Desiree: You have to find a balance between hiring for your immediate needs versus long-term growth. You talk about hiring, let's say, leadership too early. When do you prioritize hiring specialists versus generalists? What is the logical progression for the roles you're hiring for in the beginning?
Steli: Roughly speaking—and there are always exceptions to this—you want to lean more towards generalists in the early days. You're probably going to have to pivot, adapt, and change a number of times until you hit something approximating product-market fit and really know what you're doing, who your customer truly is. A lot of that is going to be up in the air and should remain open to change.
Steli: Hiring deeply specialized people very early on can hinder your ability to move and adapt quickly. You'll likely lean more on the generalist side because things are changing so fast. You need people who can run multiple different experiments and feel empowered to take on projects and manage them from A to Z. A developer who knows a bit of front-end, back-end, and design, and can put together an MVP on their own, is going to serve you much better than needing a super specialized back-end person, a front-end developer, a designer, and so on, just to experiment with a quick MVP.
Steli: So early on, it's generally more beneficial to have generalists. As your company scales and solidifies its product and target audience, you'll start hiring more specialized roles. Eventually, once you hit real scale, it will mostly be very specialized roles. But in the early days, you need generalists who can wear multiple hats, move quickly, and love experimenting.
Desiree: Let's talk more about the type of person you're looking for. What qualities do they need? Who thrives in an early-stage startup environment and, just as importantly, who doesn't?
Steli: That's a good question. Some observations I've made aren't groundbreaking. People who are very driven, smart, ambitious, and curious—those who like building things, figuring out how to create and ship things—thrive. It doesn't matter if it's product, marketing, or sales; people who take action, have a bias towards action, and are excited by a lack of structure, process, or direction often do well. They see it as an open field to explore, learn, and generate insights. They help uncover the successful path the company needs to take. These are the people who thrive because they're joining something that's in flux, in constant change, and not clearly defined. They will have the most success if they can operate in that kind of environment.
Steli: People who don’t do well in startups are usually those who look for a lot of guidance, who want clear instructions, who are more reactive than proactive. They tend to say, "Nobody told me I should do this," or "Nobody said this was something I should look into." They might be more focused on their own career path rather than the excitement of being part of something great. If someone is primarily interested in titles, salary, and immediate benefits, a larger company is often a better fit. Bigger companies provide a clearer career path and a structured environment where you can maximize and optimize for titles, promotions, benefits, bonuses, salaries, and so on. In a startup, especially in the early days, titles may not exist or might be meaningless, and salaries could be lower. There’s also a higher risk of failure, and the company’s needs might change constantly, so flexibility is key.
Steli: People who are more comfortable in structured environments thrive when they understand the rules of the game and become great players. In contrast, for your startup, you need people who enjoy inventing new games, not just playing a well-established one.
Desiree: I like that. I remember you once said to hire people who operate well in chaos because in the early days, everything is always changing. Someone who is process-oriented and needs an established process will be frustrated, whereas someone who loves solving puzzles and sees chaos as an opportunity to bring order will thrive.
Desiree: I've worked at startups before, never founded one, but I’ve been an early employee. It takes a certain humility and a lack of ego. I remember getting hired at a startup as employee number 30 right after their Series A funding. On my first day, I was building my own IKEA desk and furniture for others. I was hired to write, but I had to leave my ego at the door and get scrappy. Not every writer would be okay with that. How does company culture factor into hiring decisions, especially when you don’t yet have a clearly defined culture?
Steli: Well, I think you always have a culture. You might not be aware of it, or be able to articulate it clearly, but once you have multiple people interacting, there is a culture. It might not be formalized, but it's there—whether it's your family, a friend group, or a startup. There are always things that are valued and those that aren't, a set of norms for communication, collaboration, and priorities that form without explicitly being stated. This culture starts with the founders or whoever initiated the company, setting the DNA for what’s prioritized and what’s not.
Steli: You have a company culture even if you’ve never written it down. When it comes to assessing culture fit, there are some simple but effective questions to ask. First, do you trust this person? Are you excited to work with them? These questions seem basic, but many people overlook them. Over the years, I’ve seen that most hiring failures occur because people ignore these fundamental checks. They hire based on intelligence, connections, or other factors, overriding their gut feeling about trust and enthusiasm. For example, you might hire a salesperson because they claim to have a huge Rolodex of potential clients, even if something feels off about them. You might push aside doubts in favor of perceived benefits, only to regret it later.
Steli: If you wouldn’t want to work with someone long-term, don’t hire them even for a day. This is easy to say but hard to practice, especially when you’re under pressure to fill a role. After numerous interviews without finding the right candidate, you might be tempted to hire someone who seems "okay" despite reservations. This is often a huge mistake.
Steli: For assessing culture fit, ask yourself: Do I like this person? Do I want to work with them? Would I trust them with my company’s future? Even more personally, would I let them live in my home and feel safe? While this might not be the perfect question, it gets to the heart of the matter: is this someone you genuinely want on your team? If the answer is yes, it’s a good sign for early-stage hiring.
Desiree: You spend half of your waking hours—at least eight hours a day—with your coworkers, so you should be around people you genuinely like. Especially in a startup, where much of the work involves innovation, you need good chemistry with your team. Innovation doesn’t happen if there’s no chemistry or if the fit isn’t right.
Desiree: And so it's interesting because you can't necessarily measure for that other than a little bit of gut feeling and avoiding the temptation to just get a warm body in a seat, which I know can be a very great temptation when you're all under duress. So what are some other common mistakes that you've seen startup founders make when they were hiring?
Steli: Yeah, well, these mistakes are definitely all mistakes that I've made myself and that I've seen a lot of people make. There are many things, but I would say, again, when I think of common patterns, it's ignoring your gut, ignoring your intuition. Most people will overwrite their intuition when it comes to bad hires because reasons, because I might be wrong.
Steli: I had this for a long time where because I'd been wrong sometimes about people, I thought this isn't somebody I want to work with, and then it turned out that person was pretty good and pretty successful in their career. Or I thought this person is really great, and then it turned out that person wasn't that great. I sort of took that level of humility and started telling myself, well, who knows, right?
Steli: I don't really know. Even if I feel strongly, positively or negatively about somebody, I really don't know. I think that that is accurate and still something I believe today. I don't really know. But I don't need to be 100% correct. This is not what it's all about.
Steli: I'm going to make mistakes. It's just a question of what kind of mistakes I'm going to make. Most founders make the mistake that they hire people, and when it turns out that these people have been a catastrophe, in the worst case scenarios, the founder or the hiring manager knew right away on day one, on day two. They had immediate doubts.
Steli: It seems like a great person, but kind of weird the way they approach day one or kind of weird their first week. I expected something different. And then they start negotiating and fighting with themselves and going, well, but it's just week one or it's just day one.
Steli: Let's wait a little.
Steli: They start going well, but they've done some good things. Let's give this a bit more time. And 99 out of 100 times when a hire goes tremendously wrong and it's like a catastrophic hire, the person that hired them will say, I wish I had listened to my gut early on. I knew right away something wasn't quite right. It's very hard.
Steli: Hiring is very tough because it takes a lot of time, a lot of energy, a lot of effort. And then when you make a hire, you're so biased to want that hire to work out that you can't think clearly enough. That's where most founders and most managers and startups make mistakes. They hire somebody that isn't quite right, and when they have early warning signs, they ignore and wait and try to be patient.
Steli: You just have to be brutally fast with these decisions. When you have doubt, move on, no matter how painful it is. When you hire somebody and there are early negative signs, you need to part ways. You need to be merciless about it. I've struggled with that my entire life. It's been very, very difficult.
Steli: So I would say not listening to your gut is such a simple thing. We've heard this, and everybody has experienced this in areas in their lives. But just because it's simple doesn't make it something that you can skip over to more interesting or more novel mistakes that people make hiring.
Steli: No, you have to master this. The better you get at this, the better you'll get at hiring, the more successful you're going to be as an entrepreneur. The other thing that I'll say as a mistake, it's not really – well, it can be a mistake is that if there's one common mistake I see people make when it comes to hiring is that they don't listen to their gut and the other one is that they set the standards too low. You set your standards too low.
Steli: No matter where they are, you can adjust them up. You will know that you're doing this well if every year, you set higher and higher and higher standards for the type of people that you want to bring into your company. Again, easy to say, not that complicated, not sort of like a thing I've never heard before about hiring or could not conceive myself of.
Steli: But when I look at the people that are crushing it, that have way more success than anybody else, and I look at how they think about hiring and what kind of standards they apply when they interview people, it scares me, and they're just like on a totally different level. Then when I look at the very successful people, they're pretty harsh. They set pretty high standards. Then I can set the bucket of where your success will be as an entrepreneur based on how high or low your standards on hiring.
Steli: One thing that every startup has in common that I've ever seen that failed, that had enough success to hire, to like hire 10, 20, 30, 40 people but ultimately failed, one thing they all have in common, I would always look at the team, talk to a couple of people there and be like, wow, they hire people that are just not right for a startup.
Steli: They hire people that we would never hire. And so, the common thread there is that startups fail because they hire people that are just not ambitious enough, biased enough towards action, smart enough, resourceful enough, creative enough, talented enough in their areas, curious enough. That's really, at the end of the day, your company will not be the plans you make or the pitch decks you put together but the people you hire. And so you want to have outstanding success, hire outstanding people, easier said than done.
Steli: It's very, very difficult to do this. But whatever your standards are, if you want to see more success, you have to increase them. You have to level them up, and that's something that a lot of people really struggle with.
Desiree: You kind of already answered a little bit my next question, but I'm going to ask it anyway just to put a finer point on it. I'm going to ask you two questions. When you think back on the best hires you've made, is there anything they had in common? And when you look back at the worst hires you've made or your worst hiring decisions you've ever made, is there anything those hires had in common?
Steli: Yeah, so I'll start with the worst ones and we'll work our way to the best ones. For me, everybody has weak spots. Everybody has weaknesses, and everybody has strengths. There's sort of a hiring quadrant. I don't know which management consulting firm, which Harvard or which business school put this together, but this is the hiring quadrant. And it's sort of like willing and capable, willing but not capable, unwilling and capable, unwilling and not capable, right?
Steli: And so obviously, we all want to hire the willing and capable, the people that are incredibly good at what they do and have incredibly good attitudes about everything, right? That's awesome. Those are awesome people, rock stars, whatever, superstars, whatever you want to call them.
Steli: And then, obviously, when you meet a person like that, it's not very difficult to identify. When you meet a person like this, everybody in the company goes, wow, this person is incredible. You can even feel it.
Steli: And even in the early days, before the person has done a lot of work, people already feel excited about this person being around. There's just a quality about them that we all recognize pretty quickly. That's not difficult to hire for, to look for, right?
Steli: It's difficult to find, but it's not difficult to look for, and it's not difficult to identify. The opposite of that, the unwilling and incapable, also not that difficult to figure out, right? Somebody sucks at what they're doing, and they have a terrible attitude about it. Not that challenging to not hire that person, right?
Steli: Most companies are going to do okay, especially most startups, not going to be really tempted to hire these people. There's two other groups, right? These two are a little trickier. It's the capable but unwilling and the incapable but willing. Those are usually weak spots for startups.
Steli: I would say that most startups that I've observed have a problem in the capable but not willing bucket, right? So they hire assholes—people that seem very smart, kind of good at what they do, and ambitious, but they just have horrible attitudes. That's where most companies make most of their hiring mistakes. It's never been an issue for me.
Steli: I've never been tempted to hire somebody no matter how exceptional they are. If I feel I can't trust you, if I feel you have a corrupt character, there's no temptation for me. There's nothing interesting to me about this. I've never hired somebody like that. I've never hired somebody that I thought was a terrible person but was so good or so experienced or so fill-in-the-blank. That never happened. That's not my weakness.
Steli: My weakness is the other one, which is the people that aren't quite capable yet but are really willing, right? The underdog—the person that's a bit too junior, comes from a different background, and is not quite where you want them to be, but they're so hungry, and they have such a great story and are so willing that you want to give them a chance.
Steli: When you give a person like that a chance and they grow into capable and willing, that's a big success. That's a huge return on investment that the company makes because a lot of other companies might not hire this person, and so you make that investment, you'll get an outsized return.
Steli: It's very exciting. I, for most of my life, was this person—in many areas, still am this person. So I have a bias towards these people. I have a soft spot. I want to hire the not-quite-capable-but-willing and help them grow.
Steli: But I made this mistake too many times where the delta, the gap of where they needed to be today in their skill set and where they really were, was just too big. So I, in the past, would hire people and take them on as personal coaching projects and work day and night, trying to help this person overcome some skill gap, experience gap, or personality gap to be really great at a job that they really wanted to be great at, but they just weren't there yet. Maybe they needed five years to get there, and I needed them today.
Steli: I made those mistakes early on in my career, and one pattern has been that that delta has been shrinking. Maybe early on, I would hire people that needed 10 years to get there, then five, then two, then a year, and it's been shrinking ever since. But it's still a soft spot of mine, so I'm very aware of it today that no matter how much you want it, I need to believe I can get you there in three months, not in a year. Because it's always going to take a little longer.
Steli: So if I think three months, it might take six months, but I need to be careful not to hire people that are just not there yet. They will learn and grow basically on my startup's dime, and then a year or two from now, they'll join another company. That company will have an amazing person, but I just invested in education. I'm not in a position to do that. Once you're like 100,000 employees and you've been around for 100 years, you can do that, but as a startup, you can't.
Steli: So that's been a mistake that I've personally made. Other people make different types of mistakes. And then the other thing I'll say is not listening to the gut. When a new person joins a company, joins your team, within the first week, within the first month, there should be a growing excitement. If there is not such a growing excitement, it's probably a big red flag that you didn't hire the right person.
Steli: And so acting on that red flag early, aggressively, with urgency is a mistake that I made many times, and I've gotten better at it, but it's still challenging at times.
Desiree: What do you think about being very explicit? I saw a startup do this one time where they said, everybody has 90 days, and at the end of 90 days, it's sort of sink or swim. You might be let go; you'll get a severance package that's like a six-month severance package, but this is the thunderdome. You got 90 days, and at the end of 90 days, we're gonna do a full assessment. It sort of lights a fire under people—it attracts a certain type of person and repels a certain type of person. I've seen that happen. A bit of a controversial thing to do. What do you think about something like that?
Steli: We did something very similar. I think for any role that wasn't an engineering role—I don't know how long we did this—but in the first couple of years, we definitely would always hire somebody first on a contractor basis. I don’t know if it was up to two or three months; then you would get sort of an employee status.
Steli: So we did something similar. We had a similar philosophy in the early days where we'd say, hey, we want to work with you, but the truth is you don't know if you're going to like working with us and working here. We don't know, no matter how many interviews we make.
Steli: So let's work together for a while, get to know each other in the real world, and then we'll make a long-term commitment. And a lot of people didn't like that. Some people were like, hell yeah, I'm actually excited by that challenge.
Steli: And typically, you want to err more on the side of people who will be comfortable with that level of risk because they believe in themselves and are excited about risk. If you have people that are like, no, this is risky; I don't want risk—well, why do you join a startup with six people, right? And no product-market fit? Maybe this isn't the right environment for you.
Steli: I think for engineers, we didn't do this because it was just not something that was in the sort of philosophy of how engineers were hired in startups at the time, and so it would have been very difficult to compete with that sort of philosophy. But maybe the world has changed in that regard.
Steli: Today, we're now over 100 people, we've been around for over a decade. We don't do this. Philosophically, I still believe it's a good attitude to have to understand on both ends that just because—it's like saying we've dated a couple of times and now we need to decide. We've been to three dates—lunch, dinner, and breakfast—and now we're going to have to decide marriage or no marriage, moving in, and then we move in and marry. It has to work forever. That would seem kind of radical as an approach.
Steli: I think when it comes to working relationships, we'll see that loosen up a lot more. But I believe that no matter if we have three, four, or five calls, we don't know if this is going to be a great fit until we start working together. So I think that philosophy is valid, and that strategy could work for many companies.
Desiree: So we've talked a lot about hiring, but there's another side to this, which is retention. And a lot of startups struggle with this because things change all the time. Your team can look completely different at the end of two years. The original team you hired won't be there anymore. It's a whole new set of people, and it's 4x in size. But Close, from what I can tell from the outside, it doesn't look like it has as much retention problems. I could be wrong, but I look around and I see people who have been here for years and years. You have some of the longest retention I've ever seen. Nick, who's—I think, what is he, VP of operations or something—started out as just like a sales guy on staff like a decade ago. So you have a lot of people that you've grown.
Desiree: How do startups like you retain people over the long term?
Steli: Yeah. So I think our average retention for senior leaders is like eight years or nine years by now. We have people that have been here for 11 years. We have great retention and probably very exceptional. That's also the number one thing I hear from new employees as well as from people that are interviewing at the company.
Steli: It's one of the top things that they are surprised by—when they look at our Glassdoor reviews and then when they talk to a bunch of people, they realize, wow, at Close, people stick around. They seem to really, really like this company. So when it comes to retention, I will attempt to answer the retention question with the what-makes-great-employees question that we didn’t get to earlier.
Steli: I think, first of all, you have to understand what attracts somebody to your company. What is the reason people want to join in the first place? And if the whole reason why people want to join is because what you're doing is really hot right now, right? They're around, and they want to join an AI startup, and you're doing AI, and the primary reason they want to join is because you're doing something with AI, and they want to be part of that.
Steli: It doesn't mean that it's going to be a bad hire or that you won't be able to retain them, but it does say a lot. It's like, again, to the marriage example or the partnership-dating example. It's like somebody that says, I am just optimizing for money.
Steli: How much money are you making? You're like, I'm making a ton of money. If that's what attracts them to you, you'll have to understand that they will optimize for that probably for the rest of their career, which means the moment they meet someone that makes more money than you—sayonara—they're going to be gone.
Steli: So once maybe AI isn't hot and there's some other thing that's hot, that employee is going to be gone. Or if it looks like your AI startup is not a rocket ship and is struggling in the first year, they'll try to join a rocket ship, right? They're going to be more transactional because their reasons for joining have to do with what I would call pretty superficial reasons, right?
Steli: And that's fine. But for us, it was always important to understand: is this somebody that joins and wants to join us for reasons that are deeper than just what we offer on the surface? Is this somebody that cares about working with great people, somebody that wants to build something great, somebody interested in solving problems and contributing in meaningful ways?
Steli: So there was a time when remote startups were really hot. When we would interview people, they’d tell us, “Oh, I applied because I’m looking for remote gigs, and the thing that really attracts me to Close is that this is a remote job.” We liked that, but then we’d ask, “Cool, beyond being a remote job, what else do you care about?” And when they seemed to struggle with answering or gave very superficial answers, we wouldn’t hire that person because it seemed like they were attracted to us for something that didn’t feel lasting.
Steli: So I would say that you need to understand if they’re connected to the core culture and the reasons that will sustain past superficial things—things that will change. That’s one. The other thing is, I think a lot of retention has to do with the kind of relationships you build with people and the kind of relationships people build with their coworkers at work.
Steli: Everybody wants to have deep, meaningful relationships in their life. That’s what makes life truly wealthy: the quality of our relationships. If at work, everything is transactional, it will feel disposable and empty. Employees will look for thrills elsewhere—like salary or exciting career title changes. Whatever it is, they’ll be driven by superficial things.
Steli: But when you find deep, meaningful connections with the people you work with—people you respect, admire, learn from, and feel deeply connected to—you’re just not going to be as tempted to look around constantly for something better. Those superficial questions, like "Is there something I’m missing out on?" will melt away. You’ll be heads-down, focused on the work you’re doing.
Steli: I think that’s one reason why people have stuck around for a long time. Many people have told me when they joined and I said, “If you’re not interested in working with somebody for a decade, don’t work with them for a single day. I’m only interested in relationships that will last for a very long time.” Just recently, a manager at our company told me they remembered me saying this during their interview process. At the time, they thought, “Bullshit! There’s no way I would work anywhere for a decade.” Now, they’re in their eighth year and saying, “Yeah, a decade—that’s easy. I’m definitely going to be around for a decade. How much longer than that? I don’t know. Will it be 20 years? Maybe.”
Steli: People stay because they feel deeply connected to the people, the culture, the work they’re doing, and the customer base they’re serving. The deeper those connections are, the more fulfilled people are at work, and the less they’re interested in hopping to something else.
Steli: Connecting this to what makes great early employees, for those who joined Close in junior roles—junior developers, support people, personal assistants—and are now directors or VPs a decade later, they all had something in common. They were incredibly adaptable, passionate about creating value, and eager to help coworkers, the company, and customers.
Steli: Over time, they evolved with the business at a fast rate. They were resourceful and saw opportunities—things that weren’t being done or were breaking apart—and they stepped in to solve those problems. A lot of times, that led to career growth into management roles or senior individual contributor positions.
Steli: Having those qualities makes a big difference in succeeding and achieving longevity at a startup.
Desiree: Yeah, it’s those growth opportunities. If you show people they have a career path... I actually just came from a hiring software startup, and we did a survey of job seekers one time. It was a retention survey or something like that.
Desiree: One of the questions we asked was, "Why did you leave your last job?" The number two reason, behind "not enough money," was "zero growth opportunities." Not even a whisper of, “Oh, this is how you can grow at this company.” So you might not be able to pay as much as the next place, but if you offer people a path to growth, that’s also something that could retain them.
Desiree: Last question: What are your favorite interview questions to ask people? Do you have any favorites? Are there any questions that tell you a lot about a person?
Steli: So I used to have plenty of them, and I used to take pride in how creative or unexpected they were. The reactions I would get—from both people interviewing and from other founders or team members—the admiration, “Wow, Steli is such a deep thinker; nobody has ever thought about this,” used to give me great pleasure and boost my ego.
Steli: I care less about that today, and I’ll tell you why. But I’ll still give you a few questions I used to use a lot and that sparked interesting conversations. They might be helpful for others. I’ll say this: the thing I optimize for today is less about asking clever questions that might bring up interesting nuggets about the person.
Steli: The thing that I optimize more today is how crystal clear am I on who we're looking for? What is it I'm looking for? I find that most of the time, as in anything in life and particularly in a startup or in business, people are lacking clarity. They’re a little fuzzy.
Steli: They’re like, “We think we want this thing and that thing and that thing,” and they cast a very wide net or describe things in very broad terms. When you’re a little fuzzy about who you’re looking for, you’re going to be a little fuzzy about who the person is or isn’t or how to evaluate people.
Steli: It will depend on your mood, your personality, and the opinions of others interviewing the candidate, resulting in vastly different responses. The most powerful thing you can do is to be crystal clear on who you’re looking for.
Steli: Then, even if you miss asking a really clever question, if you get 45 minutes or 60 minutes with somebody, being crystal clear makes it easy to see if this person fits the very concrete pattern you’re seeking or not.
Steli: But when you’re a little fuzzy, everything becomes more confusing, more astrology-like. You end up doing all these complicated things to figure out if you should hire someone or not. So, with that out of the way, a couple of fun interview questions I used to ask:
Steli: One was: What is something that is easy to misunderstand about you the first time someone gets to know you? What is something people have told you, after a few months of working with you, that they either misunderstood when they first met you or that it took them a long time to uncover about you?
Steli: That gets people to open up and share interesting things. For example, maybe you think someone seems arrogant, and they say, “People think I’m arrogant at first, but over time, they realize I’m actually very caring and thoughtful.” That adds context to your judgment of them.
Steli: Another question I used to ask: Why isn’t this going to work out? Imagine we’re working together. Obviously, you present yourself in the best possible way, and we try to present ourselves in the best possible way. Sometimes companies and candidates are so good at presenting their best selves that the reality is completely different.
Steli: I would challenge people, saying, “If it didn’t work out—and I’ll go first—I’ll share the things that people don’t like about working here. Then you share something companies haven’t liked about working with you. Let’s play a game of chicken and see if we can scare each other away.” If we can, better to do it now than three months in. If we can’t, that’s a good indicator this might work out.
Desiree: That’s risky.
Steli: It’s very risky. People have to decide what to share and what not to share, and it keeps them on their toes. Sometimes it even forces me not to frame negatives in a way that sounds positive, like, “Oh, we’re just too honest” or “We care too much.”
Desiree: We make too much money. We just, I wish we didn’t make so much money.
Steli: Too much success. It can easily erode into nonsense, but it’s useful to ask: If you joined and three months later it didn’t work out, why would that be?
Steli: Another important aspect: Don’t ask 20 superficial questions that only touch the surface, like, “Tell me about the most successful campaign you’ve done.” They respond, “Oh, it led to 200% growth.” Then you move on without depth. You learn very little that way.
Steli: But the opposite—digging too deep on one topic—can waste time if there’s no valuable insight. So, you need a balance: cover enough surface area for a 360-degree view but pick one or two areas to go deep. That’s where you often uncover real insights. Sometimes people’s interview answers fall apart under scrutiny—like “400% growth” meaning they went from one to four Twitter followers. Or you find out they didn’t actually do the work; others did.
Steli: So, don’t get too attached to your structure, but make sure you cover a range of topics and dig deeper where it matters.
Desiree: As you gave those examples, I remembered you asking me some of those questions during my interview. I’m like, “What did I say back then?” It must have been good because I’m here, but I can’t for the life of me remember.
Desiree: Either way, I’m glad you hired me because now I get to talk to you every week. And next week, we’re going to discuss something related to hiring but more about operating the company overall with core values and why they matter. I think core values should guide hiring decisions. We didn’t touch on that today, but we will next time—or next episode. Not sure if it’s weekly, but either way, Steli, thank you for hiring me and for joining me today.
Desiree: Bye-bye, everybody.
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.