This article is part 3 of a four-part Startups Playbook Series (see part 1 here, part 2 here). Navigating the Startup ecosystem to build a business is a daunting, stressful, costly, and often lonely journey. But the reward for when you make it - priceless. Having the right tools, direction, and support is often the lifeline between success and failure. This series will guide you through 4 business-critical areas you’ll want to nail in order to keep you on the road to success. Visit us March 31st for the release of part 4 of the Startups Playbook Series - Customer Acquisition.
The quality and completeness of your startup’s initial core team is a key determinant of your success (or failure). It is worth your time to approach team building systematically keeping in mind your startup’s stage and its needs. Why It Matters Have you wondered why investors are so interested in knowing as much about startup teams as they are about their growth plans? Who makes up a team and the dynamic between each member is an important differentiator and factor of when, how, and even whether your business plan will become a business. The startup landscape is littered with failures that resulted from having the wrong kind of team in place despite developing otherwise perfectly viable products. These failures come from a variety of team-related reasons such as wrong domain, technical, commercial, or marketing knowledge, or simply a lack of ‘startup savviness’. Hostility, friction, or disagreements within the team can also lead to a lack of motivation and agreement to move forward, ultimately leading to failure. So how can you ensure you’re building the right team for your business? Step 1: Assess the capabilities of the existing team Your starting point in building your team should be an inventory of existing capabilities within your startup. This should cover the strengths and weaknesses of your team in relation to the near and long-term organizational goals. The simplest way is to draw up a list of all your priority goals with corresponding skills required to achieve them, and map these against your current team’s strengths, weaknesses, and gaps. This will help you to prioritize team additions and fortify areas that are important while saving valuable capital by delaying non-priority hiring. Step 2: Identify positions of need and skills required Once you have identified broad areas, you need to distill this down to specific positions that can help you create the team structures you need. For instance, product development can require a large team, consisting of people from design, costing, procurement, development engineering, testing/quality, and marketing (mostly in that order). As the team grows you may also need team leaders in each of these areas and a Product Development Head. How many people and what level of experience you require for each function is something that will be determined at this stage. A few things to keep in mind:
Look for people with skills that are complementary to the existing team. Early hires should be able to fill gaps and augment existing capabilities rather than duplicate what exists.
Add to the team in a sequential manner. Bear in mind that you will need high-quality tech and product builders first, then product management, then sales, marketing, and CRM talent, and finally support people for operational roles like finance, accounting, and G&A. This will allow you to focus on the immediate need and avoid increasing overhead that is not a priority at the current stage of your business.
Stage-appropriate hiring, always. The stages of a startup are usually: idea to business > prototype to product > in-house to outsource > people to process > product to brand. Remember that product development hiring (to continue our example) will be very different at the ‘prototype to product’ stage compared to the ‘product to brand’ stage.
Recognize that “hiring to hire” almost never works out. Make sure you are hiring for well defined needs/roles and can put new team members on a path where they are rapidly impacting the company’s growth.
As you go through this process, we recommend you are in constant communication with your investors, mentors and other stakeholders to ensure that your team-building plan is the right one before proceeding with hiring and onboarding.
Where to look Use your professional network, founder forums, leading startup platforms, accelerators, and incubators that provide hiring support to identify candidates. Leverage this ecosystem well since it can provide a good matching ground for high-quality candidates who understand and fit well into the unique “startup culture”. The best part: your hiring cost is almost NIL! Who to choose We all know how dynamic, volatile, and unpredictable startup life can be. This can make figuring out your team’s needs tricky. Yet, when it comes to assessing your needs and role definitions try to be as specific as possible in the given circumstances and the moment. This will help you to get as close as possible to hiring the right candidates, even if they aren’t the ‘perfect’ candidates. Hiring mistakes that leave gaps or include the wrong kind of talent can be disruptive for your startup, which is usually something you want to avoid even more than the financial cost of bad hiring. On the personal end, seek people who exude confidence and a high tolerance for ambiguity and overcoming adversity, because that is how things are likely going to be for a while. Individual contributors could be a good fit depending on the role, though you may be better off with a team player. Remember, you are looking for creativity, hustling skills, and hacker mindsets more than anything else. On the professional end, look for achievers who have experience in building a product or service; independently would be even better. Here’s a brief hiring cheat sheet (or in business parlance, your hiring checklist):
Smarts needed for your domain (Creative | Hustler | Hacker)
Prior startup/small business experience
A commercial sense
Grit and perseverance
Beyond general familiarity and comfort with startup culture, a fit with your own startup’s culture is paramount. This can include several factors of which you are the best judge but often includes aspects like value systems, work ethic, views on diversity and inclusion, decentralization vs control, focus on training/development, openness, machismo, etc. What to avoid Do not rely solely on traditional hiring platforms like LinkedIn or portals like Monster, Glassdoor, Hired, etc. which can be ineffective, especially for early-stage startups, or headhunters, which can be prohibitively expensive. Do not concede ground (pay, stock options, position) worrying about your small size or early stage. You need to be picky and focus on the right fit rather than star candidates. This means not assuming that your potential hires’ title or role means they know everything. What else Bear in mind that workers (especially in startups) are used to the hybrid and distributed work model. This was prevalent enough in startup culture even before COVID-19 and the past 1.5 years have only reinforced this model. Where you position your work practice on the hybrid spectrum (Virtual First / Full Flexible / Office First / Remote Friendly / Dynamic) depends on your comfort level and the nature of work. Don’t just be open to this model, look at it as an opportunity – remember that distributed work (distinct from remote work) allows you to access talent from multiple locations, including other countries. Think high-quality Silicon Valley talent without relocating to Silicon Valley! Finally, take your time in the evaluation. If you have identified your need well, the candidate ticks all possible boxes, you have a fit with startup culture generally and your own culture, and you have a good feel then move decisively, pay fairly, and reward consistently.
About Juan and Alec:
This article is co-authored by Juan Scarlett and Alec Wright, Founders and Managing Directors of OneValley Ventures. Juan leads the investment strategy and execution for the OneValley Fund and growth-stage investments with OneValley partners; while Alec focuses on pre-seed and seed investments in the enterprise software, big data, digital health and education and learning technology markets. They have both served on the boards of several companies and have 20+ years of experience in technology investing and research