by Stacey Brandhorst, Director, Business Development and Venture Advisor, i2E
In Jim Collins’ book Good to Great, the author shares, “Those who build great companies make sure they have the right people on the bus and the right people in the key seats before they figure out where to drive the bus. When facing chaos and uncertainty… your best strategy is to have a busload of people who can adapt to and perform brilliantly no matter what comes next.”
At i2E, we are often work with a single founder or a small founding team who is seeking to grow their team as part of their funding round. Over the years and through the many companies in our portfolio, we have learned many valuable hiring lessons.
Hire for where you are now, not where you want to be
Is your product finished? If not, you probably don’t need a salesperson. While a startup may grow to have a large team, it never starts that way. Initial hires should be directed to product development and sales with other key job functions handled by the founder or contractors until sales and revenues dictate otherwise.
Hire your weaknesses, not yourself
We have seen so many founders hire someone exactly like themselves. Unfortunately, that leaves key areas of the business underserved. Hire someone who is passionate about the role and who brings different and complimentary talents to the team.
Contract vs Full-Time
Large teams kill a startup’s cash runway. Not every hire needs to be a full-time hire. Many of our portfolio companies leverage numerous contractors to handle finances, taxes, marketing, and development. Engaging with contractors provides a certain level of flexibility and a guaranteed level of expertise. As the company grows, you can determine if it makes sense to bring certain positions in-house.
Hire Strategically Instead of Conveniently
When startups receive their funding, they normally jump into hiring far too quickly. Despite being up against the constantly ticking cash runway clock, it is best to hire slow. Think thoughtfully about the job description and the characteristics of your ideal hire. Then, invest money and time to get the right fit. Conversely, it is equally important to get the wrong people off the bus. Firing quickly when a new hire doesn’t work out is a service to not only the founder but also the other team members.
Who do you want on your bus?
Working at a startup can be a bumpy ride. You’re up against an ever-dwindling cash runway and are constantly dealing with uncertainty. Think about this environment during your hiring process. How would this person handle ambiguity? A pivot? Is this someone you want by your side when a large contract falls apart or cash is tight? Ensuring that your key hires can handle the peaks and valleys of startup life in addition to performing their job functions (and then some!) can lessen turnover and build a strong company foundation.
When evaluating investment opportunities at i2E, we like to say it’s “Team, Team, Team, Market, Product.” In an industry when 9 out of 10 startups fail, the team is often the ultimate success factor. Invite people onto your bus wisely.