A startup can never have too many creators
One of the most frequently asked questions by business leaders is who and when to hire.
It doesn't matter if your business has two people or 20 or 200 people; your next job is always the most important. Playing the wrong role at the wrong time is a waste of money and potentially even a waste of talent.
But how do you know when the time is right and what skills are most essential to your success? Here is a guide that I have prepared, based on the creation of dozens of companies, for all stages of the growth cycle of a company, from the first hiring to the 500th.
When asked for help in a hiring decision, nine times out of 10, it comes to my mind like "What role should we hire for the next one?" And nine times out of nine I try to check if a recruitment is necessary.
Here's the rule: good hires are like bullets. You will not want to use them until you have locked a target and are 100% sure that you want to pull the trigger.
For the first few days, you shouldn't hire before the pain of losing that extra resource is double the total value of the hiring package. In other words, if it is to cost $ 100,000 all inclusive to bring in a resource, it should not be done until the company feels $ 200,000 in pain.
It is not always an easy measure to measure, let alone live, which makes it more of a guide than a strict rule. Remember that the only worse thing than living without a necessary resource is paying a salary plus benefits for the wrong resource.
A second factor in a growth hiring decision, and perhaps even more important than pain relief, is to seize the opportunity. Employees are the biggest bet of a business, but growth does not come without talent. So sometimes we have to hire opportunistically, throwing the dice to a great talent in the hope that the reward will be exponential.
I always prefer to hire by chance on pain control, and I do my best to make the money work.
Here's the rule: try not to hire a full-time resource from the start. This is something that I have done throughout my career and that I have effectively adopted as a policy in my company's Automated Insights until we reach sixty full-time people.
Here's how it worked: Instead of the normal on-screen welcome interview process, we put all new employees on a 60-day consultation contract. This allowed us to do several things.
1. This gave us the key to being able to weigh the risk-reward factor of hiring in real time.
2. He provided a window to make sure we didn't imagine the fit.
3. It allowed us to take our time on benefits and equipment and on incorporation. This was essential when we had a very small budget for human resources.
4. In fact, it allowed us to take more risks with our employees. We have acquired an extremely valuable talent that we probably would not have risked if we had faced the specter of engagement after a few short interview sessions.
We hired 98% of the people who went through the consultant hiring process, and we and they were more productive through it.
This covers when and how to hire, so let's talk about who to hire. The two main things we generally look for are the manufacturers and the sellers.
"We have too many developers." - No growing business ever.
A startup can never have too many manufacturers, and by manufacturers, I mean who really uses their hands and brain to build the product or provide the service. Since most of my readers are tech-savvy, I'll use developers to talk about this role, but the advice applies to any product or model.
This is the rule: you should always hire creators.
Eliminate all the shades and the sun and we end up with the fact that companies exist to make and sell things. So the question is not: "Should we hire a developer?" as much as it is "When should we hire our next developer?"
And it's the trick to manage supply so that it slightly exceeds demand. It's a balance, and the equation seems simple: when the revenue generated by adding a developer exceeds the cost of revenue.
There is therefore a second, broader balance: all peaks in demand if they are not triggered, and opportunistic hiring delays the inevitable erosion. With that in mind, your decision is whether you hire another developer, or more about why you hire that developer, either to generate more revenue, or to build a better product, or both.
Be careful with "both". Income generation and innovation require two different skill sets.
Finally, this manufacturer hiring question should not be confused with another manufacturer hiring question: should we resume production in-house? Many startups cultivate the construction of their product to a third party, especially at the start. My answer to this question is almost always: yes, as soon as possible. Executing production in-house gives us the control we need and the flexibility we want to scale faster.
This is the second and last of your basic needs: the "sell things" part of the business. And this hiring involves putting this role in the hands of a professional.
But it does not hire its first sellers to sell more products. Hire your first salespeople to develop a systematic sales strategy for your product. You can really throw your product against a wall and watch it stick, but even if it works, you are leaving money on the table.
Ideally, hire your first salesperson right after manufacturing a functional product. As for when to hire additional sellers, it's important to realize that you're not just hiring a bunch of sellers and freeing them up to sell. You have to think about how to divide your territories: by product line, by location, by customer size or by a combination.
This is the rule: when the penetration in a single territory is too deep for the owner, the territory is divided in two and the other half is given to a new employee, under the tutelage of the original owner. Repeat this until you have created a solid business organization.
This role is always complicated, especially for young companies. But first, there is a difference between leadership and management. Your business needs leaders immediately, but managers can wait.
At the beginning, the founder is (or the co-founders are) the leader of everything. For employees in any area of leadership, just like for sales: you hire to remove that burden from the founders. Unlike sales and despite conventional wisdom, first time executive recruits do not have to be an experienced visionary or strategy guru. For example, a good strategic thinking developer, perhaps a senior, can play the role of technology leader for a long time.
Your business needs leaders immediately, but managers can wait.
So be careful not to give up leadership roles too early. Is the CTO you are about to hire really an experienced CTO? Maybe they're just a great developer and since you don't have great developers yet, this one looks like your CTO.
Here's the rule: you should always hire a leader one step ahead of your current situation. Therefore, if you are in the initial stages, you need to bring experienced leaders into growing a business. If you are in a growth phase, you will need leaders who can stabilize growth. And so.
On the other hand, managers are growth-oriented employees. These are important functions of the business, and they really should not happen until the stage of 50 to 75 employees. You will know that you need a manager when you have hired enough people in a critical area to be able to form a team as you will need to lead it.
This is the rule: when your business generates income but you think it could generate much more income, you must fulfill the role of product.
Somewhere between the initial phase and the growth phase, the evolution of the product pushes you out of the domain of the CEO or the CTO. When this happens, you need someone who is solely responsible for finding out how the product is making money and growing.
Many business leaders wait too long in this role. Product is a relatively new science that uses sales data, performance data, marketing data and industry and market information to create the best product for growth.
There are two approaches to hire marketing. In some companies, obtaining correct and fully functional marketing as soon as the product is launched is mandatory to reach the growth stage. In other companies, marketing is only there to create the message and build the brand, and it is in the growth phase before a resource is even needed.
So you must first know what type of business it is.
Much of this comes down to B2B vs B2C. In B2C businesses, forward thinking businesses will launch products and marketing at the same time, with at least one dedicated marketing resource to create an audience that can become a customer. In B2B, the sales team was traditionally responsible for building the brand and spreading the message through individual contacts.
But the boundaries between sales and marketing are blurring in B2B. Corporate buying decisions are starting to look more like personal buying decisions, sometimes without a salesperson in between, especially at first contact.
Here's the rule: If your sales process contains the idea of turning a larger audience into prospects, you need a marketing resource. For example: if there are ongoing advertising expenses, it is a good idea to hire a marketing resource to create and manage your advertising campaigns.
The hires triggered by growth are the roles you play not because you need them to grow, but because you grew up to need them.
Now all of these roles are important to fill from the start, but initially they can usually be filled part-time, in a consultative capacity or with a third party service, such as an accounting firm or a law firm, or a law firm. recruitment in retention.
The question here is when do you hire to bring these roles to the business. And in all cases, this is the rule: hire when you want the function to change from reactive to proactive.
Human resources: Any recruitment service, web or human or otherwise, can help you find candidates for your vacancies. When you overcome the ability to act on the big candidates, you will need a human resource to organize this process. This same resource should also be able to manage the overall benefits, policy and overall maintenance and happiness of your workforce.
Finance: From the first days of your activity, you must have access to an accounting firm. When your sales contracts start to become more personalized, too voluminous or when you are looking to raise funds, you will need a financial resource at least part-time. When you typically reach 50 employees, pay will be another reason to take on the full-time need.
Legal: Just like finance, you will want to have a relationship with a law firm from the start. But unless your business has specific legal requirements or risks, you usually don't need legal staff until you pay the business more than you pay to hire someone.
Management and assistants - Not light, but in the world of startups, the traditional role of executive assistant is generally considered a luxury. It is rare that I meet a startup director who has a traditional assistant where I thought they needed him. Management is much more important, and generally with around 50 employees, it is established enough to have logistics and office tasks that can no longer be shared among employees. An excellent administrator makes life easier for everyone.
Keep in mind that the exact time to add one of these resources is a decision that can only be made by the management team. In general, it is always better to hire a little late than early. But the most important thing is to always hire the right person for the right job, no matter when you hire him.