Hiring - the Single Most Important Skill as a Founder

I wrote a shorter version of this blog post for entrepreneur.com a while ago: http://www.entrepreneur.com/article/254430

The longer I’m involved in Codeship (the company I co-founded), the more other founders I mentor, the more I’m convinced that people and a great team is the lifeblood of a fast-growing startup. I would even go so far as to say that people are the foundation of every organization, big or small, high-tech startup, or huge corporate juggernaut. But the startup world is unique in its constraints and also in its opportunities. Building a great team is more important at a startup than in any other organization.

There’s no such thing as an overnight success, as much as countless books and movies try to portray well-known entrepreneurs as geniuses. Success is the product of various factors, hard work as much as great and unique skills, the perfect timing, and elements outside your control, such as luck. The more you as a founder, CEO, or leader can remove the latter from the equation, the better off you and your team will be. Building a great culture, hiring skilled individuals, and forming an amazing team out of it allows you to make your own luck. It’s a lot of hard work, but it’s within your control.

Investors Invest in People, Not Ideas

As much as you like your idea and believe that the market conditions are perfect, the truth is that most companies will change and adapt their product down the road. Slack's founding vision was to build a game. Instagram started as a Foursquare-like check-in app called "Burbn". And, you all know the story of Twitter being a side product of a podcast platform. All those companies had in common was a strong team that could take new ideas and builds new products until they were today’s success. The people working at those companies were able to adapt and change and create a great product. Maybe your company won’t pivot completely, but you will learn, adapt, and improve as you gather four customers’ feedback. And the more feedback you incorporate, the better you get.

The ability to do that, to listen to the little feedback between the lines, knowing when to stay stubborn and when to adapt is one of the most important and hardest to learn skills for a founder. Great investors, angels, and VCs know that. Despite the importance of a potentially big market, an important enough to be solved problem, the team is the key reason they will eventually invest.

Early on, Every Hire Is Crucial

Summarizing a successful startup in one sentence is simple: Great people build great products, get great customers, and eventually build a great company. As simple as it sounds, doing it right is incredibly difficult. You will face many challenges in your company’s early days. The more successful you are, the bigger your team gets, the harder it gets to keep your team members aligned and your company on track. The one thing that you should keep in mind is that everything, good or bad, is caused by the people in your team at the end of the day. Empowering your team and getting out of the way is critical, but it’s only possible if you hire the right people.

Small companies don’t have the luxury of making a lot of mistakes. You are always resource-constrained, both money and people, and despite not having enough, you have to build a great product, nail the distribution and find a viable business model. This can all work out great if you did your job well and found great co-workers, but it can also go sideways instantly if you did a poor job. Nothing is more dangerous for an early-stage startup than one bad hire, one person who isn’t a culture fit or simply not good enough at their job. Even if you resolve the situation fast, you will get distracted, most probably won’t build a great product during that time and lose a lot of time. Bad hiring is one of the riskiest and costly mistakes you can make in a startup.

Great People Attract Great People

Nothing is more attractive for a talented job seeker than a team full of really skilled co-workers. Despite all the potential problems of a bad hire, the upside is tremendous if you do it right. With every great person you can convince to join your team, your team gets better, and it will also get easier to attract the next person. Hiring is a self-fulfilling prophecy and therefore gets simpler over time. The hard part is to get everything started. How to hire the first employee if you don’t have an amazing team that everybody is talking about?

Solving this chicken-egg problem is crucial for getting your company off the ground. The good news is that you already have a team, even before your first hire. You and your co-founder(s) are already a team s one of a countless long list of reasons you shouldn’t found a company alone). You found your first follower; you did the hard first step already. Maybe, you even managed to get a small investment or convinced somebody to be your advisor. You will have a team long before hiring for the first employee, although it might not feel like that.

Culture Is More Than the Sum of Every Team Member

Even if you hire only smart individuals, you won’t automatically create a high-performing team despite their respective skill sets. Great teams are generally a group of amazing individuals mixed in the right way. The glue between the outstanding senior engineer and the young up and coming designer, the magic that makes sales work well with product is having the right culture. Culture is not about free food, nice X-mas parties, or other perks. It’s about shared values and beliefs, the common ground of every discussion, and the bigger reason you are all working on the same idea. Great culture makes you win; great culture will help tremendously to survive tough times. Having a great culture will simply make you feel that it’s easy to build a successful company.

The importance of culture heavily impacts your hiring. Every single person you bring on in the early days changes your culture, in a good or bad way. Figuring out if somebody is a culture fit, if somebody is the right person for your team instead of finding the best person, is crucial. Although culture is defined by your team, by every single individual, you still have to work hard on it, and you won’t get it automatically by hiring right. As a leader, your job is to facilitate discussions, offer a vision, and set the guard rails. Nothing defines culture more than actions, and your team can’t take any actions if you don’t provide the guidance they need.

Cultural fit is really important for every new hire, but it’s only working if your culture is great. That won’t be the case all the time. You will face times where your culture starts getting sideways, where you can’t be as proud of your company as you wish you could be. Especially in those moments, it’s important that you critically challenge the status quo. What’s great, what’s broken? If your culture is broken and you’re blindly hiring with an emphasis on culture fit, your culture will get worse. You can’t use your culture as a safeguard if it’s broken. As much as great people, a great culture attracts more great people and can result in a better culture, as much as it can go in the opposite direction. Be aware of your own bias.

Hiring Is a Skill, and It Is Your Most Important One

Hiring is not magic; it’s not luck; it’s a skill. Some people are better with it from their first job on; others not. Maybe you are but if not, you can learn it, and even if you do great right now, you should still work hard every day to improve. The faster you figure out if somebody fits into your team, the quicker you can evaluate an applicant’s skills, the better it’s for you and your company. Even more important in today’s hiring market, the better you are convincing people to join your team, in selling your vision, the better people will eventually work for you. Again, it gets easier over time the more great people are working for you.

It’s important to understand that it’s not just about you interviewing a candidate. You have to design a hiring process that involves your team, which gives the candidate many opportunities to evaluate you as well. Every growing company faced the same challenge, and you can learn a lot from the best practices of the industry, from companies that did a great job with hiring and companies who failed. Luckily, now more than ever, startups are willing to share their journey, starting with small insights and some tactical advice going as far as being completely transparent like Buffer. Take the opportunity and learn from those companies and their failures and successes.

Don’t forget that you are always hiring. It doesn’t matter if you are doing a job interview in your office or if you are at a friend's party. You are always leaving an impression if you want or not. Maybe you aren’t looking for anybody right now, but you surely will in the future. Or at your next job or company. Making sure that you always have a big pool of great people to work with will set you up for success, and since it’s all about the people, it will make the difference between being successful or not. Always be hiring.

Moritz Plassnig

Moritz Plassnig

Boulder, CO