The significance of a startup’s first round of hires can’t be overstated. These are the people whom you’re going to trust with significant assignments and whom you’ll need to call upon and rely on in times of great need.
There are three primary categories of people that are going to be very important as you start and grow your business. Choose carefully, because the success of your business will depend upon your hiring choices:
The most impactful employee decision you will ever make as an entrepreneur is your first one: choosing your cofounder. Together, you and your cofounder will create the foundation upon which your company will be built. How well you two work together will dictate not only the business model and the culture, but ultimately, the company’s level of success.
Still, this decision is one that a surprising number of entrepreneurs mishandle. To avoid the dire consequences of choosing an ill-fitting cofounder, avoid choosing a friend. It’s naive to think that friends will be able to completely separate their business selves from their personal selves–and eventually, any personal tension will negatively affect the company. Don’t just assume: “We’re friends, so let’s start a business together.” A smarter entrepreneurial mindset would be “Who is best suited to help me with building this thing?”
Instead, look for someone whose skill sets complement rather than duplicate your own. Business, like life, is about balance. That’s why you and your cofounder should have an “inside-outside” dynamic between the two of you: One person should be the outside-facing partner, responsible for areas like sales and marketing, and one person should be the primarily internal-facing partner, who handles product development, operations, and accounting.
Additionally, when choosing a cofounder, focus on what they’ve accomplished, not their background. Far too often people are impressed with where someone worked or where he or she went to business school. When choosing your cofounder, look at their track record rather than just their accolades.
Once you’ve found the right cofounder, the next people you will need is a small group of “first wave employees.” These are people whom you’re going to want around for a long time and who will wear a lot of hats in order to help really launch the business.
In my experience, I have found that the people who are willing to join startups are not “business people” in the typical sense of the word. They tend to be dreamers or idealists. I imagine they are the same types of people who would join a political revolt or new church or new club. As such, the vision and mission of the company is much more important to them than compensation, which is important because most startups can’t afford to pay employees well at the beginning. This is not to say that they are naïve, but they are driven by things other than money. They tend to mirror, in a lot of ways, the entrepreneurial mindset.
While different entrepreneurs will need to surround themselves with different types of individuals, I have found that there are a few fairly universal characteristics of good first-wavers. When looking for first wave employees, I’d try to identify individuals who are strong multitaskers and less aware of what they cannot do. I prefer liberal arts majors because, in general, I believe they’re taught to think in non-linear ways.
I also find it helpful to identify people who have worked very hard at one thing in their life. I look for something that they were really passionate about for an extended period of time. Passion is a learned attribute, in my opinion.
Finally, I would look for individuals who are real, practical, and clear. This is a very difficult one to quantify, and it’s difficult to gauge this one by looking at a resume or past experience. I look for people who don’t rely on canned phrases, and who aren’t afraid to voice their opinion. You need them to be not only smart and driven, but also vocal and unafraid to disagree with you.
I have used college interns effectively to build two businesses and they have made a significant difference in the growth of each company. For one thing, they’re relatively inexpensive.
They don’t require benefits and most college interns are happy to make anywhere from $8 to $18 an hour, depending on where they live in the country. Since there are not a lot of overhead costs associated with hiring college students, the overall burdens and risks of using them are very low.
They also come with fresh ideas and a ton of energy. Their ideas can be incredibly useful, in part because they come to problems from a position of naiveté, which is actually an asset. Good interns also turn out to be some of the best full-time employees. Internships are not just a way of attracting full-time candidates; they’re a way of finding and hiring new full-time employees who are very familiar with your corporate culture.
With the right cofounder, a small group of core, first wave employees and a handful of college interns, you can move swiftly toward the goals you’ve set out for your business. Missteps in these areas can be costly, so proceed with caution.
—Brian Hamilton is the chairman and cofounder of Sageworks. He is the original architect of Sageworks’ artificial intelligence platform, FIND, which is the leading financial analysis technology for analyzing private companies and is used by thousands of accounting firms and financial institutions across North America.