Startups: read this before you hire your first employee

16 Feb, 2017

Pete Smith is co-founder of Songkick and Silicon Milkroundabout. He will be giving at talk about sourcing, hiring and leadership at Tech North’s Founders’ Network Summit on 2 March 2017. Book your ticket now.

Many startup founders forget two crucial steps they need to get right before launching into hiring their first employees.

I’ve built two successful startups. My first, Songkick, was in Y Combinator’s fifth batch in 2007. Nine years later we have 140 staff across three offices, 10 million monthly unique users, and generate $100 million in ticket sales each year. Post-YC we have raised $60 million from the likes of Local Globe, Index Ventures and Sequoia.

My second startup was very different. Silicon Milkroundabout started in a pub as a jobs fair for London tech startups, and today runs twice a year in a massive event space in East London. We bootstrapped it from the beginning, never took investment, and in 2015 for the first time made £1 million in revenue in one year.

In both cases, however, I had to build a team from scratch, starting with me and my co-founders. And while there are huge challenges in hiring a team of engineers, salespeople and marketers, there are three foundation stones that every founding team has to get right before they scale beyond the founding team.

1. Develop brilliant working relationships between co-founders

First, discover your shared and differing values. Values are different to opinions and are based on past life experiences. This is where you come from, what makes you you. Synonyms include ‘principles’, ‘ethics’, ‘standards’, ‘a code of behaviour’. Clearly this is more than whether you agree on which CRM to use. This is the big stuff.

Examples of values that can be in conflict are co-founders clashing over working hours. Often, one founder sees working hard in-and-of-itself as indicative of progress towards overcoming hurdles (their experience tells them that brute force works), the other can only find the motivation to work super-hard if they think they and their team are tackling the problem the right way (they think: “we need to pick this lock, not break down the door”).

Second, be a leadership team with a functioning decision-making framework. Decide and define founder roles. Choose a CEO. Have an OGSM, set OKRs, meet weekly to discuss progress, problems, and plans. Resolve founder disagreement behind closed doors and present a united front to the team. Nurture advisor relationships –these are distinct from investor relationships.

Remember: never stop negotiating an enduring co-founder relationship. You will change. Your co-founder will have a baby or a family member will get sick. Your relationship needs to be strong for 5-8 years.

2. Design a high-performing team with high Team/Problem Fit

Expect to substantially revise the company strategy at least two or three times over the first 24 months. With this in mind, it’s best to:

  • hire senior specialists to fill gaps in founding team competency
  • hire junior people, but put in place a development plan from the get-go to promote them into senior roles. Founders of startups usually screw over junior generalists by shifting them around laterally (from one area that needs fixing to the next).

3. Actively shape your culture

Finally, don’t make the mistake of passively letting a culture happen; be active in shaping your culture.

For example, make a decision on how transparent you want the team to be, and strike a work/life balance in line with founders’ values.

Sign up for the Founders’ Network Summit now and hear more of Pete Smith’s thoughts on recruitment and retention first-hand.

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