A startup has to get many things right to be successful. One of the most important ingredients in this recipe for success is hiring. Given the hectic nature of work, which might often not have immediate rewards, hires not only need to be smart but also extremely passionate about what they are building.
However, the kind of talent that your startup requires varies as you scale. This problem only becomes trickier if you choose to not take up VC funding and instead bootstrap your way to growth. Because this means putting your own money into the business and being extremely smart and judicious about it. Also, you don’t have a separate HR executive helping you in the hiring process – you are the HR department!
Having taken this route of self-funding my startup and also having observed other fellow entrepreneurs bootstrapping, I have come to realize a few commonalities in the approach towards hiring. These are best analyzed across the various stages of a startup’s growth, as discussed below:
1. Sharpening your idea
Each startup begins with a vague concept of what one wants to build. Over a period of time, this idea is refined through research and interaction with relevant individuals such as potential customers, past entrepreneurs, and experienced industry professionals.
Literally, your decisions in this stage define what kind of startup you build in every way. In such a setting, the person you need the most is one who is going to traverse the entire journey with you – a co-founder. You, along with your co-founder, need to do all the legwork to actually make a startup out of an abstract idea.
Involvement of any hired individuals hampers the achievement of this objective and is a waste of resources. So, if you started out alone, time and energy is better spent on finding your partner for this adventure.
2. Finding product-market fit
A plan on a piece of paper has been made. While this is a critical step, concept quickly meets reality once you start pitching your product to potential customers.
This is a period of pure toil. You need to talk to all customers who will listen to you and continuously iterate your idea. To aid you in this effort, you need soldiers who are absolutely passionate about the startup and can tirelessly be at it.
The sell for the candidate has to be the potential of the idea, quality of the team, the opportunity to learn, and steep growth. This is critical because there will inevitably be numerous bleak moments in this phase, when the easiest option would be to quit. Remember to lead from the front by being the most disciplined soldier yourself.
Don’t go too crazy and hire many people – it is tempting to do so as opportunities may seem limitless in these early stages. You are mostly not making much money, if any, and you need to make an investment only when you see an absolute need.
3. Increasing pace of customer acquisition
Achieving product-market fit is not a sudden event. It is a gradual transition into realizing that your small set of customers are happy and want more of your offering, while also recommending you to others in their network.
Having established this critical step, your primary focus shifts to improving the speed of customer acquisition. This immediately exposes many functions which worked at a miniature scale but start to fracture now.
Such areas could be across product development, customer relations, streamlining internal processes, among others. Spot the critical bottlenecks and hire to fix them. The idea is to continue doing what you did earlier but better and in a more structured fashion.
Finally, identify points of differentiation that you like to clearly establish and start sowing the seeds for future. This could begin with a hire for the most promising area. This would be a long-term investment setting the platform for the next phase, hence hire accordingly.
4. Scaling indefinitely
Hopefully, you have started making money now. Don’t focus on making a profit for a year – a break-even is all that you need. Rather, invest entirely into building a team.
For the first time, you don’t hire for generic or broad roles, instead, define specific roles that need to be mastered by individuals. Build as many capabilities in-house as possible. Hire individuals who are smart, passionate, and eager to learn – no compromises.
This would mean that you have to pay higher than you have paid before. If your budget doesn’t allow you to do so, consider candidates with lesser experience in the industry. However, the aforementioned three parameters are non-negotiable.
Also, while you still need to be operationally involved, you can slowly begin focusing on larger decisions now. Your role shifts to ensuring that your employees have the right environment and motivation to do the best in their respective roles.
Find your own
Of course, these suggestions can’t be applied blindly to any startup. However, you would appreciate that the approach needs to be different if you are self-funding your startup and also across the various phases of its growth.
Getting this right is important, as a startup journey does throw many curve balls. Building the right team around you prepares you to dodge them or even better, hit it out of the park.