Lots of young entrepreneurs think the key to building a company is to hire tons of people quickly. But bulking up too fast can be fatally risky. Sustaining momentum is one thing, but trying to foment it yourself is another. In fact, the more slowly your team expands, the better. Your headcount should actually be your bottom budget item, and your top priority should be to spend as little as possible. It might sound counterintuitive, but if you set your startup’s course by these two principles, you’ll have more options and the best available people working towards them once you’re actually making money and weighing your next move.
Essentials should always come first. In order to decide what’s essential and what isn’t, you’ll need to clearly define your objectives at each phase of your growth, then steer by them alone.
Early on, when Location Labs fit into one room, we needed to build, test, and sell product to carriers in order to win contracts. We interviewed some talented people, but we didn’t hire most of them because they weren’t skilled in the areas we needed right then. They might have been great for the organization in general, but they weren’t right for our needs at the time.
For one thing, we hired no one with management expertise right off the bat. It’s true that managers are good at balancing competing priorities while staying flexible–an important thing in a startup. But people who have managed typically want to keep doing it. Our focus was strictly on product. We were a flat organization. How could we spend resources growing the team before even knowing if our product was viable? When you’re in the trenches trying to get a company off the ground, you need to focus 100% of your efforts towards developing that product and getting it in front of the right people as quickly as possible. That’s it.
Once you win your first couple of deals and have some breathing room, then your objectives can shift towards scalability and talent retention. It’s at that stage that experienced managers come in handy–but not before. And you should be just as picky. The types of employees you need might broaden, but you still shouldn’t hire just for the sake of it. Hire with purpose, and keep re-evaluating your objectives so you know what that purpose is at every step of the way.
If you can only spend money on one engineer, you’d better make sure she or he can do the work of several, and in half the time. But you should pay that one engineer enough to keep them. Fewer highly skilled experts make for more efficient and stable growth.
Needless to say, this “hire superstars” approach is run-of-the-mill Silicon Valley wisdom. Where many startups are mistaken is in evaluating the superstars they’re going after mainly on the basis of talent. But in reality, talent is table stakes.
Of course you need smart, dedicated, driven people. That’ll get you through the work at hand. But what about when your staff needs to double within the space of a quarter in order to meet your goals? What about when your “superstar” needs to get a team moving in the same direction, happily and on schedule, all while doing her own job to a T?
A truly perfect fit not only excels at their work, they can also unite people towards a common cause. They listen. They take turns. They want others to shine as well. They prize being effective more than being right. After all, these are the values that drive startups to success, not the swagger of a few highly skilled hotshots.
Still, every startup has a different idea of what makes a perfect hire. If you can define that early, you’ll lay the foundation of your company culture. Especially when you’re small and still getting your bearings, a single crack in the foundation could spell trouble. Don’t invite it in by hiring someone whose values don’t quite align with your own, no matter how talented they are.
The best people will find you, join, and stay not for a product or a payout, but for an experience. Experience is culture in action. And culture is built on ethos–the tone you set for how people treat one another, how work should be done, and how success is defined.
A company’s culture isn’t ready-made and can’t be bought. It needs time to take shape. You can’t just order some yoga balls, stock the kitchen with third-wave coffee, and schedule a weekly happy hour, then expect a meaningful culture to take root. Your people create your culture, so it has to be unique to them.
That’s why two companies that share a similar ethos can still have wildly different cultures. At one, employees might go rock-climbing together before work once a month, arrive at the office early each day, and take a white-water rafting trip for the annual company outing. At the other, folks roll in at 10:30 a.m. and stay past dark, meet weekly to see a foreign-language film, and take turns tending a company garden. You can even envision a third company, where all these habits and activities coexist.
The point is that the employees drive a successful business. They share interests, preferences, and priorities. The best a startup can do after making their perfect hires is to allow room for all those things to shift into place, then get the hell out of the way. But you can’t make it happen–or make it happen faster. There’s no shortcut. Slow is good.
It’s no accident that “culture” and “cultivate” both come from the same Latin root: cultura, meaning “growth.” If you allow the time for this kind of slow, sturdy growth to occur, you’ll be invincible.
Tasso Roumeliotis is the founder and CEO of Location Labs, a mobile location and phone-control technology pioneer headquartered in Emeryville, California. The Dutch online security company AVG acquired Location Labs for $220 million in 2014.