The Hiring Mistake That Could Bring Down Your Startup

Job Interview

A first time entrepreneur just raised capital, and their quest for resources turns toward hiring.

Investors make referrals, they post specs on job boards and go to networking events.

After reading a few blogs about startup interviews, they hire the “best” person that applied.

They’ve just made a terrible, possibly catastrophic mistake. In all likelihood they just hired an above-average, good person. And good people are cancer for start-ups.

10x people exist in every position

“I have no trouble imagining that one person could be 100 times as productive as another” Paul Graham

Outstanding people can produce amazing amounts of impactful work. They’re generally self motivated, self-improving and behave like owners.

They don’t complain about picking up trash off the floor and don’t watch the clock at 6:30. They demonstrate action bias and take pride in the value they create.

When given the appropriate context and resources, these people can outperform the other top 5% of the population by a multiple 10.

The multiplier isn’t limited to super-transparent functions like programming or sales. You can find 10x designers, copywriters, office managers, etc.

Outstanding teams create outstanding outcomes

“Ideas are easy, execution is everything, and in anything worth doing, it takes a team to win”John Doerr

The description above should read like a job spec for a start-up. Hours are hard, there are no support functions like HR or IT, and execution expectations border on the ridiculous. There’s a lot of room for learning, in fact, for many the startup fire hose will be their best opportunity for professional development.

But you don’t have time or resources to train the qualities I mentioned above. The expectations are just too high.

Outstanding teams have a multiplier impact, particularly at early stages. These teams will get good product out to market sooner, iterate faster, power through storms and attract more great people. These teams are more likely to hit the bimodal outcome that doesn’t involve lighting stock certificates on fire.

The best people won’t find you

 “Of all the things startups need to do, finding exceptionally talented people that are a good ‘fit’ is likely the hardest”Dharmesh Shah

Great people are undervalued, but it’s not like their work goes without recognition. Employers love them and will fight for them (albeit not hard enough) if they threaten to leave. Former colleagues poach them for new endeavours. If they do leave without a fulltime position, it’s likely because they’re starting their own company. Job boards are like dating sites; they attract an audience that doesn’t have other good options.

At Signpost we reach out to an average of 400 people for every open position. We look to platforms like LinkedIn Pro to scale our outreach and target companies, specialties and schools where think we’ll find top performers. We generally don’t hire people that are unemployed or found us on a job board.

Closing the right person will be competitive

“50 no’s and a yes… means yes” –James Bond (Family Guy)

If you’ve done your job, you’re at the table with someone who is sceptical about leaving a good opportunity to work long hours in your closet-of-an-office.

Like any sale, success is determined by a combination of hustle and the attractiveness of your underlying product, or in this case the position itself. My company is continuously refining this value proposition. We pay our people more than our competitors (and our CEO).  

We make the work environment attractive by valuing impact not face time, giving great people freedom to operate independently, and not taking ourselves too seriously. We believe in a vision that takes share from a snake-tailed empire that’s pocketed $1B from small businesses.

We’ve also learned not to be discouraged by a “no.” Over half of our current team either declined my initial invitation or the offer itself.

So invest in hiring right, and cut quickly when you don’t

“Most people have the will to win, few have the will to prepare to win.” – Bob Knight

Human capital is an amazing resource, one that drives outcomes for companies across life cycle stages. In the startup world, where most companies fail, founders should fight tooth and nail for a team that will outperform their competitors. This is a lesson I thought I didn’t need to learn but did anyway; I didn’t double down on hiring until we had to let two good people go. We now keep all seats empty until we find people that we believe are outstanding.

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