Tuesday, November 25, 2008

How to hire a great startup team.

Hiring good people is like getting married - if you do it right, you don’t have to do it often. If you’re in a situation of excessive risk, hire somebody who has already learned to shave on someone else’s beard. Hire the management team you think you’ll need five years from now if everything works out. Hire people who share your vision and agree with your business principles, and make sure these are clear to the people you're recruiting. Have the best candidates spend time with the people they’re going to be working with. Hire backups for key people; the biggest weakness in smaller companies is a lack of bench strength. If you want an innovative organization, hire, work with, and promote people who make you uncomfortable. You need to understand your own preferences so that you can compliment your weaknesses and exploit your strengths. Never hire or promote in your own image. It’s foolish to replicate your strengths or your weaknesses. If you hire people with the same character traits as yourself, you’ll just end up fighting with them.

1. Look for exceptionally smart people. It's fundamental. When you get exceptionally smart people on your team, that's a big plus. In addition, look for a combination of experience, drive, commitment, and passion. You don't want all experience - but you don't want all drive, energy and passion either. Getting that mix right is the difference between ventures that achieve greatness and startups that don’t go anywhere.

2. Look for people who can take a concept from a standing start and make it live and breathe. Chris Whittle, the CEO and founder of Edison Schools says, “We've noticed there's no variable on success. Theory says you should have a bell curve of results, but it doesn't happen that way. If there are 20 units to be sold, we've found that a certain group of people will go out and sell all of them. Another group will sell nothing. There's not much in between. The variable in this is entrepreneurial skill. Either people have it or they don't, although they may have it in different ways.”

3. Look for venture team members who are likely to wear well over time. Ask yourself: "Are these the people I want to be in trouble with for the next five years of my life? Are they great at recruiting other talented people? Are they great at selling?” In a small startup company, everybody is selling all the time. People who will build a new company need to be innovative, challenging their industry's traditional rules and conventions. You need high-level people who are willing to roll up their sleeves and engage customers. The most senior managers in the company need to be the first ones out of the trenches.

4. Get to know the compelling interests of venture team members, Talk honestly about one another's aspirations, goals, philosophies and values. Outspoken and abrasive personalities get people irritated, make it difficult to attract new people, and can destroy the team’s development. Values stem from a person’s previous education and experience, sentiments, attitudes about themselves, the obligations they feel toward others, and their ideals and objectives. For each of us, reality is whatever our values allow us to recognize. We see only what we expect to see. When people see things only from their own point of view, the actions of others which are inconsistent with their values seem stupid or unexplainable to them.

5. Don’t put too much emphasis on credentials. Hire higher than you need at the moment. If you're planning on growing, you'll need all the help you can get. Look for characteristics rather than test scores when hiring people. Maybe youth, energy and creativity outweighs experience and learning. And make sure that the group members have a sense of humor. Fit is as important as function.

6. Build some slack into the team in case someone leaves. The venture team that companies start out with is often not the one they eventually end up with. Typically, at least one of the cofounders falls out before a new venture is successful. It helps if some members of the team can handle different responsibilities because when there are changes in personnel, the business can't just stand still. “Scaleable” should apply to employee skills as well as headcount. If the founders all come from the same profession, such as engineering, they're experts in their own world and, frequently, that world is all they know. The chief financial officer should be able to explain the company’s technology to a six-year-old. It’s no good having people who are great at what they do but who don’t understand what the company does.

The founding team are as critical to the business as its customers. Consider hiring prospective executives as consultants for a three-month trial period first to see how they'll work out. If you've made a mistake in hiring, correct it immediately. Sometimes the only way to change a person is to change a person. Put a steel band around your heart. If you don’t run them out of business, they'll run you out of business. See that no equity changes hands during the employee's first year as dealing with someone who owns a percentage of the company complicates the termination process.

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