Hiring right from the start

Hiring right from the start

By Janis Machala
July 23, 2007

When starting a company there are some unique elements that hold true
for an early stage company that might not have been true in hiring in
larger companies where you may have worked previously in your career. A
clean slate means you get to choose who you hire and who you cofound
your company with. These people will impact your company DNA for years
to come.

  • Think about your own personal values;
    you get to choose who you work with and it’s important you have people
    around you that espouse the same values you have. I use the test of “If
    you were in a car driving from Seattle to California would you want to
    be with this person for the whole trip, driving straight through with
    no stops?”
  • Be careful about hiring friends and
    roommates. You may lose your best friend over a company where they
    start out as the VP of something but end up as the product manager of
    something else. Is your family relationship or personal friendship most
    important. Most people think they can make this work and some can but
    more can’t.
  • It’s not all equal. Who had the idea for
    starting the company? Who’s taking the most risk? Who’s contributing
    intellectual property? Having 3 founders and each getting 1/3 of the
    ownership will often cause problems when the buck has to stop somewhere
    and when the investors want 1 person they can turn to. This means you
    will want to have buyback provisions on the equity so that when someone
    leaves they don’t own same amount as the people who stay and toil
  • Having a B player in the seat (or worse, a C
    player) is far worse than having no one or having one of the A players
    do the function part-time along with other duties. Investors don’t
    expect all positions to be filled from the start, they know key
    openings might not be filled until more funds are raised.
  • If
    someone starts asking about days off, benefits, sign-on bonuses, salary
    grades, etc. they’re probably not a startup person. If they ask how
    they can get more equity in  exchange for reducing their cash
    compensation they are probably a startup type!
  • Be
    wary of people coming from large companies. Do they need structure you
    don’t have? Do they have expectations for resources you don’t have nor
    will have any time soon?
  • Be slow to hire and fast to fire. Every person makes a BIG DIFFERENCE both positively and negatively. A
    players can yield the work of 2-3 people while C players may suck
    resources away from your own productivity and that of the teams to
    yield ½ or ¾ people. Just because you can’t pay top dollar doesn’t mean
    you can’t attract or expect top talent.
  • Every
    interview and every email with candidates is a marketing event for your
    company. How people who don’t get hired or who don’t accept your offer
    feel about your company can impact the “buzz” around town and how other
    candidates view your company.
  • Treat candidates how you would want to be treated.

    As a founder you will spend more time on hiring than you can possibly imagine. It’s that important!

Janis Machala is the Founder and Managing Partner of Paladin Partners.

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