Henry Kim is the president and co-founder at Symphony Commerce.
Generally speaking, entrepreneurs are great at creating something from nothing. We are ideas people, and good at getting them off the ground through laser focus on product concept and development as well as early cultivation of a network of investors, customers and employees.
So. Much. Tech.
Some of the biggest names in tech are coming to TNW Conference in Amsterdam this May.
But that’s just square one – how do entrepreneurs grow a company from there? By understanding the skills you bring to the table and hiring strategically to close any gaps will enable your company to scale.
There are different stages in a startup lifecycle and to move to the next one, different skill sets are needed. This requires situational awareness, which can prove challenging for entrepreneurs who are passionate about their idea and focused on the role they play in the company. I’ve found that investing in the right people at the right time to supplement my own expertise is the only path to success.
For many entrepreneurs, this means finding people who can help grow a company to mass scale but the type of talent needed differs depending on which stage of scaling the startup is at. Here is my hiring playbook for growing from launch all the way through to a $1 billion business.
Starting out: $0 – $20M
At this phase, it is important to recruit and hire people who have a dedication to the goal of the company and an eagerness and ability to be a “jack of all trades.” Even if an entrepreneur isn’t bootstrapping, the majority of resources early-on are going into product development and customer acquisition.
This means you’ll likely be hiring a younger and less experienced workforce, which has its advantages because this type of employee is generally willing to put in demanding hours and brings the hunger needed for high speed growth.
To uncover problem solvers who can contribute to different parts of the business, it is important that candidates can provide examples of when they identified a problem and went above and beyond what was expected of them to solve it.
The term scrappy is a common descriptor for startups for a reason – people are working hard, wearing many hats and doing whatever they can to get the company up and running.
Scaling: $20M – $100M
An entrepreneur can generally get a company $20 million in revenue with a dedicated, hard-working employee base.
But to get to mass scale, a startup needs executives who have experience building teams in core functions like HR, sales, branding and finance while growing junior staff to advance professionally in the organization. This ensures the company is adequately staffed and managed and has a solid infrastructure to support growth.
While experience in a specific job function is critical, it is also important to bring in people with experience in your industry. Poaching executives who were core in growing a similar startup or, better yet, who work at an established company whose space you are disrupting and may be excited by a new project that offers the freedom of a startup are your ideal hires. They’ll often have the right connections, awareness of your customers’ pain points and a strong market understanding to keep the company innovating and growing.
To find employees for this stage, if possible, work with your HR partner to outline the responsibilities that someone with industry experience will take over. Networking at industry events is a great way to be aware of potential talent to bring to your team.
Becoming a Unicorn: $100M – $1B
If you bring on the right talent to help scale your company and are successful enough to reach $100 million revenue, you are likely a well-oiled machine. You have executives running every critical operation, have a robust marketing program to fuel continued growth and likely have an HR department that has the responsibility of recruiting the right talent, which is good because the strategic senior level hires needed at this point are not easy to come by.
To make it to the next stage and attempt to become what the startup community has referred to as the “Unicorn Club” is rare. Only about .07 percent of venture-backed consumer and enterprise software startups started since 2003 have reached the $1 billion mark.
If you’re making a go at this, you need to bring in leaders who have a track record of growing companies to mass scale dozens of times and have a solid network of peers for possible partnerships, mergers or acquisitions.
Scaling a business is exciting, rewarding and challenging, and it’s not possible without the right people. As Jim Collins has said, “leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.”
Shifting gears for the types of employees that are most valuable at different stages of a startup lifecycle is what is required for entrepreneurs to scale a business.