Entrepreneurs

Avoid These 4 Startup Hiring Mistakes

Making the right first hire is winning half the startup battle. In my opinion, a successful start to the startup journey doesn’t begin with a unique idea, it starts the day you choose your first team member. Suddenly, you are no longer the only one concerned about the next move or key decision. In fact, the venture capital firm, First Round Capital, shows that teams outperform solo founders by a staggering 163%. Even the seed valuation of startup teams is significantly higher.

The truth is, hiring is one of the hardest things to do as a founder, especially in the early stages. At a high level, it is a simple process that entails posting a job on the countless available recruiting and freelancing sites. In many cases, the reality is hundreds of applicants later, many founders still don’t feel confident enough to make that first hire.

This common mismatch is due to many reasons, including:

  • The cost of hiring the right candidate is over your budget.
  • The candidate cannot exclusively commit to your venture.
  • Time difference.
  • The candidate is interested in doing their job (marketing, development, design, etc.) but lack the moral commitment to build the startup with you.
  • The candidates have startup ideas and projects of their own.

As much as hiring the right team is worth the wait, sooner or later, entrepreneurs need to make a decision for the fact that, just like everything else in life, not only is there no such thing as a perfect team, the only way to really know if they are the right team is to work with them.

Over the years, I learned valuable hiring lessons from making these four mistakes. Today, I find many entrepreneurs repeatedly make the same mistakes in the early stages, especially with their first hires. Avoiding them will help you build your ideal team.

1. Not Knowing Who You Need

If you don’t know who your ideal candidate is, you won’t recognize them when you see them or read their application. The truth is, this is not an easy exercise. You could say that you just need a good designer, marketer or programmer but is every talented designer, marketer or programmer a good early-stage startup team member? A stage characterized by uncertainty, testing and agility.

Who do you really wish you could work with? There are four things you need to define about your ideal team:

  1. Personality.
  2. Expertise and interests.
  3. Aspirations.
  4. Current and short-term goals.

First, you want to work with someone you can get along with. Second, no one is an expert at everything and no one is interested in working in every space. Next, what are their professional goals and why are they interested in your opportunity? Finally, what are they currently focused on and set to accomplish within the next few months and the year?

The reality is, while team members’ commitment is always a plus, some positions and tasks simply require the hire to just get a job done like accounting, administrative support and legal work. The roles you need to pay special attention to are those that directly impact your ability to build a business. In the beginning, usually, it is positions for key complementary skills.

Sit down, relax and start typing. Describe your ideal team member in detail. Chances are, you will not find exactly who you are looking for and that’s fine. There is no such thing as a perfect recruit. The goal is to be able to clearly identify the right fit when you see them. This first step alone will save you time speaking with candidates you would have known will not be a good match.

Many first-time entrepreneurs will ask, how can I describe the ideal personality, expertise, aspirations and commitment of my first hire if I have never hired anyone before? I cannot emphasize this enough, don’t hesitate to seek help. Finding or even hiring a mentor who’s had to overcome similar challenges is one of the best investments you will make at this stage. If you don’t, think about three things:

  1. Time you could waste evaluating the wrong candidates.
  2. Money you could waste hiring the wrong candidates.
  3. The progress you could have made from hiring the right candidate sooner.

Large companies invest tens of millions of dollars in advisors and consultants to help them overcome challenges and find opportunities where even a tiny improvement makes a significant difference with a positive ROI. It is not because you are starting with a much smaller budget that you cannot treat your startup the same way.

For instance, hiring a programmer to build the first product version can cost tens of thousands of dollars. This investment can go to waste if you hire the wrong person or build the wrong product. An hour with an advisor may cost a few hundred dollars but that meeting can help you answer a few questions worth your investment in building the product. The right advisor will help you evaluate your candidates and go to market strategy, including the scope of the product you planned to build. Think like a billion-dollar company.

2. Not Knowing How To Find Them

I found a few of my best team members with a Google search. I privately reached out to share the opportunity and seek their interest. The point is, while there are many recruiting and freelancing sites, first, they are not your only channel and, second, not all sites are right for you. Based on your answer to part one above, spend time researching where your ideal candidates hang out. For instance, you would be surprised how many specialized job sites and marketplaces there are which focus on talents with only the skillset you need.

One of the important questions at this stage is whether to focus on agencies and freelancers or full/part-time employees. Both have many advantages that I will discuss in another post. As a rule of thumb, for an early-stage startup looking to make a key hire, you should be looking for a partner that can help you build a startup, not just get their job done. Ideally, even in an agency, you are working directly with someone with whom you can discuss progress, solve problems, brainstorm ideas and work together to move things forward.

3. Not “Dating” Your Hire

You can check off all the candidate quality boxes and yet fail as partners in the venture. Some things cannot be evaluated on paper or with a few conversations. This is where a “dating” phase plays a big role.

Every project, small or big, can be broken down into smaller milestones. If you haven’t done this yet, make sure that your team helps you create those milestones. Think about the first milestone or two as the testing phase of the relationship. While there may be no doubt that your recruit is perfectly equipped to deliver exceptional results, you may realize that you don’t get along as team members.

Try to shorten the first deliverable and use this period to test your partnership and the candidate’s ability to deliver. If things don’t work out, you will get an opportunity to terminate the partnership sooner and with a smaller investment.

4. Not Making A Decision 

Unfortunately, most starting founders end up not making a decision. Clearly, it is tough and can seem scary, leading many founders to drop the whole thing or try to do it on their own. If you feel like you failed to find the right candidate, it may be due to many reasons that vary from one entrepreneur and opportunity to another, such as, maybe you’re not:

  • Looking for the right person or team.
  • Looking in the right places.
  • Doing a good job explaining the opportunity.
  • Offering the proper compensation.

This is another situation where seeking advisement can help you find the right candidate.

In conclusion, there is more to hiring the right candidate than posting a job at a recruiting or freelancing site. It comes down to knowing who you are looking for, how to find them and how to get acquainted with them.

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