Your first 10 employees can make or break your business. So in this article, we’re going to dig into seven questions that you need to ask yourself as you start to build out your early startup team.
Question 1: Where do I need the most help
Ask yourself and where you feel things are going well in the business, as well as where things are getting held up. Oftentimes, you’re going to have some sort of bottleneck when it comes to your business and that will help you identify where you need the most help.
Another question to ask yourself is what are you naturally good at? And what do you not very good at? For example, if you get easily agitated by customers, you might want to make hiring a customer support person as one of your earliest priorities.
For example, in a prior experience of mine, a co-founder of mine brought me on to help him with sales, marketing, and customer success since those are areas that he wasn’t particularly good at. While I focused on these areas of the business, he focused on the product side of the business. Be real with yourself and audit what you like and what you don’t enjoy in the day-to-day work.
Question 2: Where do you see the business going in six to 12 months?
The reason why you want to ask this question is because oftentimes it will take you a few months to actually fill the role. What that means is that by the time you’re actually filling the role, it’s been a few months if you haven’t forwarded, anticipated the need for that role in your business. So it can be really helpful to think about where you envisioned the business being in a few months down the road.
By doing this sort of forward planning, you’re going to better anticipate the needs of your bandwidth constraints as well as scale your team faster. The entire premise behind a startup is that you believe that you have some sort of new approach in the space that you’re in and that you can beat out your competitors who may have more money than you, or a bigger team size than you.
Ideally, you want your earliest team members to not only give you bandwidth, but also to give you new upside in the business in terms of the outcomes that you guys can achieve together.
Question 3: What type of company culture are you all about?
The reason you want to ask this is because your earliest employees will set the tone for the rest of the company with the next hires. As your team gets larger, what naturally happens is there are going to be different people brought into the hiring process. And as a result, the next hires will be a reflection of what the prior hires thought the team needed at that time.
So it’s important early on to settle on if you’re going to be the sort of culture in which people clock in exactly at nine and leave at five. If they work later than that to just get the job done or what exactly you stand for?
You’ll want to ask questions, like how much of a hustler culture do I want in my startup? How much is healthy for my team members? By figuring out specifically where the boundaries are in terms of what the company culture is going to be all about, you’re going to be able to better attract the sort of talent that you want in your early team members.
It’s during these early days of thinking about what your company culture is going to stand for, that you’re going to make a decision as to how much of a role, for example, you are going to allow people to have a big ego in your early team. Ideally, you’re not going to want a big ego because those people can be difficult to manage, but maybe it is the case in which the business and the industry you’re in does warrant that. Either way you need to ask these sorts of questions.
Question 4: Are you clear in how you’re communicating your vision?
If you can’t communicate what you’re building, you’re going to struggle with recruiting early on. The reason why is because oftentimes, employees number one through 10 are the ones who are actually generally pretty okay with things not being perfect as long as you guys are working towards a better version of the company.
This means you have to be an effective communicator in that there is a viable pathway to the next stage of growth. If you cannot paint this sort of vision, you’re not only going to struggle in recruiting early team members, but you’re going to also struggle in recruiting early investors if that is a pathway that you decide to take.
If you haven’t already mastered your pitch in and out from just your conversations with your customers, you’re going to really struggle when it comes to bringing on early team members.
Question 5: What management structure will you need as the team scales?
I think that founders and business owners don’t ask this question enough and it really hurts them in later stages of growth. The reason why you need to be asking this question now is because if you don’t have any semblance of who you’re going to need in a managerial role in the future, then it can be actually really difficult in deciding who you need to hire early on in those first 10 employees.
Some of those employees are just going to be individual contributors for the entire duration of their time with your company. Whereas other ones are going to be ones that have potential to be managers and actually manage other people. You need to figure out who you’re going to need a little bit further down the road though.
Otherwise, what I tend to see happen is there are 10 employees in a company and they all report to the CEO. And then as they scale from 10 people to 20 people, everyone is still reporting to the CEO. The challenge here is that if you have all these people reporting just to you, then you’re going to have this difficulty later on in delegating out different work, dealing with personnel issues, and just keeping your organization efficient in its day-to-day operations.
On the flip side of things, another thing I’ve noticed our early employees who feel entitled to the managerial role, just because they were the earliest person on that team, just because somebody is an early employee doesn’t necessarily mean that they have the management chops to actually be an effective leader in your organization.
So by figuring out how things might look a little bit further down the road, as you start to form your early team, you will have a better understanding of how to set clear expectations with the actual people you bring onto your team.
Question 6: How much, if any, equity am I willing to give to my early team
In most situations, if you sought some funding from your investors and you’re looking to recruit your early team, you will need to allocate some percentage of your equity to an employee options pool.
The thought is that by doing so you will attract better talent because these people are likely taking some form of a risk in order to join your early venture. These equity offers range by company, but they will typically be a few percentage points in order to get an attractive hire into your organization.
They’ll typically have a four-year vesting period and a one year cliff to hedge your risk as a business owner and the person granting the equity, but it’s still something you need to think about earlier on before you start hiring for your team. This way you can allocate the different percentages that you think are fair in order to recruit the best possible talent.
In most situations, if you’re not just bankrolling your own startup, you’re going to need to set aside some percentage points for the upside, just because the people that you are going to want to recruit are likely going to be accepting a lower compensation package than they would get elsewhere in the market.
Question 7: Is there a way to test these roles that I have in mind?
A lot of times, I think people default to thinking about full-time roles, but there are tons of opportunities to test out the viability of even having a full-time role for somebody before you offer that full-time role.
You can offer internships or part-time jobs with contractors and freelancers to just see if this is actually work, that needs to be consistently done for your business. Tons of startup founders I know started their businesses by working with a lot of freelancers and contractors to work on different parts of their business as they proved out their model.
So don’t be afraid to use this sort of model before you actually put out a full-time listing. Aside from having the responsibilities of managing a full-time hire, full-time hires also mean that you have to offer benefits as well and other perks to just working at your company. And so if your company is not at that stage yet, then perhaps take things one step at a time by working first with some part-time help.
Big takeaways
There are two things that I want you to remember when it comes to hiring your early start up team:
- The first one is to plan ahead of where you’re at. It’s going to take you a few months to actually fill the role that you have in mind for your early stage team.
- The second big takeaway is to find your own crazy ones. This refers back to that old school Apple commercial, where they talked about thinking differently.
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