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While the macroeconomic picture in the United States isn’t exactly where we’d like it to be, many start-ups and early stage firms are thriving. With this success comes the need to hire new staff, and it’s critical for growing companies to know how to approach the hiring process.
At this critical early stage in their life, choosing the wrong person for that first or second hire can be potentially devastating. When I’m asked by early stage CEOs for guidance on hiring, I typically give them some version of the following advice:
Hire doers. The world is full of talkers. Hire people who are willing to do stuff. When hiring salespeople, that means hiring people who aren’t afraid of the telephone.
Use equity sparingly. I always get asked, “should I pay staff with equity?” In my experience, the answer is: not if you can avoid it. Equity is a cheap currency when you’re getting started, but it becomes incredibly expensive as your grow, and early equity grants always complicate the company cap table for future rounds of investment. Reserve equity grants for people whom you know are key players, and have committed in writing to be in it for the long haul, lest they lose those shares.
Have a vision for new hires. In the early days, the only thing you really have to offer a new employee is your dream. People will work for you if they believe in your clear and compelling vision, and if they can see themselves moving along a path that’s consistent with their personal and professional goals. If you lack a defined vision for where you want to take your company, you’re going to have a heckuva time recruiting people to work for you.
Fire fast. You’ve heard this one 1000 times from other experienced entrepreneurs. Here’s #1001: as soon as you know someone is a bad fit, begin the exit process. Delaying the inevitable will cost you.
Some people work for the satisfaction of doing the impossible. All startups talk about a few early employees who made the difference success and failure. And guess what? These people joined at below-market salaries with little more than faith in the vision and small, daily wins to reassure them that they’d made the right decision. Find those people for your company.
Attorneys are worth it. Get your labor documents (offers, employee handbooks, stock plans) drafted by an experienced professional. It’s not worth the risk to cut corners, because legal issues related to employment can (will) kill your company.
Avoid office space until the last possible second. Office rent takes up valuable cash that can be deployed elsewhere in the early days. With the remote communication and collaboration tools available now, many of them free, there’s little reason to sign a lease.
[This article reposted from Adam's blog, Better Hiring Today. Subscribe to get the very latest hiring tips, tricks, and tools delivered right to your inbox, absolutely free!]