As a venture capitalist helping high-growth companies scale, one of my top pieces of advice for them has always been around talent acquisition. My team has seen time and time again the correlation between the success of a company and the strength of its people. And while getting the right talent might seem like blatantly obvious wisdom, we’ve watched founder after founder repeat the same, easily preventable hiring mistakes that have kept them from assembling the leadership team they need to properly drive their company’s growth and direction.
The rub? Making the right hires costs you one of your most precious resources: time. If you do it well, finding that new team member can take months of sustained effort. However, if you do it poorly, hundreds of thousands of dollars can go to waste. Often, I find startups don’t want to take the time to go through the talent acquisition process, because it doesn’t have a clear line of sight to revenue. The reality is, if you hire right, it’s the most impactful thing that you can do to improve your bottom line. With that goal in mind, here are five tips for bringing aboard the best team possible:
- Become Your Own Critic
When we’re doing our due diligence on a potential portfolio company, a lot of the questions we ask are meant to probe the strengths and weaknesses of its leader. As an investor, I have greater confidence in founders who are able to identify the gaps in their teams and in themselves. And I’m not the only one with that preference. A recent study by the University College of London surveying 1,873 candidates found that authenticity is key to landing a new job. The lesson here is that instead of trying to hide your weaknesses leaders should own them and then hire someone to add to and complement your skills.
- Ignore Conventional Wisdom
Ever heard the adage, “hire slow, fire fast?” In a Fast Company article called “Why ‘Hire Slow, Fire Fast’ Is A Bunch of BS,” Speek founder and Chief Technology Officer Danny Boice argues that startups have too short a runway to mess around with finding the perfect hire. But in the reaction article, “Why ‘Hire Slow, Fire Fast’ Is A Better Idea Than You Think,” Likeable Media CEO Carrie Kerpen tells the cautionary tale of how hiring too fast almost cost her the business.
So, what’s a CEO to do?
As Boice and Kerpen make clear, there isn’t one right approach for every company. That’s why the advice I’m giving here is specific for early stage, high-growth startups. These companies are typically disciplined stewards of their cash, as they should be. In an effort to extend their runway, they’ll hire too late in the game. That’s a problem. There is such a thing as hiring “too slow.” Avoid that. Bring talent in to help you grow the business before it’s absolutely necessary. If you have some traction, you’re going to need help to capitalize on it. Assuming you are already “firing fast,” there is no hiring mistake more detrimental than failing to scale your company because you didn’t scale your team.
- Don’t Get Desperate
As CEO of a startup, you’re in the trenches. You don’t realize the thing you need most isn’t another feature for your product but rather another set of experienced hands that can help you navigate the challenges of explosive growth. To do this well, you have to learn to plan ahead. Experience allows my team to tell our founders, “We’ve been here before, and you’ll need a (fill in the position) in about three months.” With this foresight, we can begin the talent acquisition process before we technically need to. About 100 percent of the time, you’ll make a better decision when there isn’t a gun to your head.
Several years ago, I was working with a retail consulting company and we were stretched to the limit teamwise. We found a candidate who was available, had relevant experience and asked a reasonable price. Sounds great, right? We ended up interviewing that person at least eight times because no one was excited about them — but no one was turned off, either.
We knew within the first week of hiring him we had made a big mistake. The negative impact was immediate. We lost weeks of traction trying unsuccessfully to onboard him, eventually lost business because of it and we had to let him go shortly thereafter. We had spent a lot of time and a lot of money, and we still had the same capacity issues we had before we hired him. Don’t let yourself get stretched so thin that you talk yourself into hiring someone because you’re desperate.
- Crowdsource Your Decision
You’ll also increase your success average if you ask for help. As a VC firm with a focus on partnering with young companies to grow and scale their operations, it’s our job to have access to talent. And we do — lots of it. So instead of turning to recruiting agencies and headhunters, talk to your capital providers first. And don’t be afraid to acknowledge when your team is overstretched. We’d much rather see you invest in top-tier talent than miss an opportunity because you lack the resources to close a deal.
For example, we recently placed a candidate in a top leadership position at one of our portfolio companies. Within a few months, she helped the company go from closing small $5,000 to $8,000 contracts to closing several six figure contracts. It’s become one of our fastest growing companies, catapulting the business from one with essentially flat revenue growth to one that is now showing impressive year-over-year growth. Talent wins.
- Disregard the Past
While résumés can give you helpful context, what people have done in the past often doesn’t have much correlation to what they want to do in the future. Gallup’s “State of the American Workforce” report found that , and low engagement means poor productivity and high turnover — neither of which you can afford. To ensure a mutual fit on both sides, you have to dig into the candidate’s goals and make sure they align with your company’s size, stage of growth and organizational aspirations. Matching the wrong desire with a company that is too big or too small for the candidate is a recipe for a short tenure.
Mark Flickinger is vice president at BIP Capital, a venture capital firm based in Atlanta. To comment, email email@example.com.