The defining characteristic of every startup is growth. In a startup, it’s not where you are but where you’re headed that matters, progress measured not in absolute terms but as a rate of change towards greatness. In such a forward-looking environment, founders can easily fall into the trap of planning for tomorrow’s challenges without adequately preparing for today’s battles. Nowhere is this trap more pronounced than in hiring. The emphasis on growth can tempt founders into “future-proof” hiring, favoring candidates with experience at scaled businesses while losing sight of how well they fill the current needs of the company.
The consequences of such hiring decisions are often catastrophic at an early-stage startup where every team member has a critical impact on the company success.
Here are some ways this danger can manifest in an early-stage startup:
These are all bad hires because they don’t address your current needs. And worse yet, the purported strengths of these hires are actually liabilities in your startup environment. More specifically:
Because product, engineering and business skill-sets vary so drastically across companies in different stages of evolution, it is essential to match a candidate’s experiences with the stage and precise needs of your company. The very traits that make a sales executive, manager or engineer successful at an established company will lead to failure at a young startup where the rules of the game are different. The engineer rewarded at an established company for effectively and safely advancing a mature product line, will fail at an early stage startup where the metric for success is fast new feature work over long-term robustness. The sales rep rewarded at an established company for effectively managing existing account relationship and ensuring customers renewals, will fail at an early-stage startup bringing to market an exciting (but incomplete) product that requires an evangelical sale. Paradoxically in all these cases the stronger the candidate’s track-record at their previous job, the more predisposed they are to failure in the new environment.
In general terms, you can think of a company’s evolution from startup to established company on a continuum across a few dimensions: risk/reward structure, nature of product innovation, sales focus and leadership skill-sets.
In each step of the journey you want to hire for skill-sets that strike the optimal tradeoff across these dimensions.
From a practical standpoint, this translates to answering the following questions for every hire:
Great companies are rightly praised for their long-term vision but what doesn’t get enough attention is how they succeed by always striking a balance between long-term thinking and short-term execution. It’s a lesson every entrepreneur would do well to remember.