As a journalist who has reported on startups and investors…
When I joined my first job in April 2009, it was a team of four members. For some reason or the other, all of them quit within a span of three months and I was the only one left handling an online news website as a single member. I managed it end-to-end from collecting news, posting articles to managing the backend of the website. I stuck to my job in that lean period and I am glad I did. Now when I look back, I think that phase made me realise the importance of actually getting the first team member and knowing what value can another person add. Just because I handled everything myself, I knew what the next person in the team could bring in. In the last eight years of my career, I have twice joined organisations as a first member of a team, and then have built bigger teams from there. At times, even had seniors who managed me when they joined later. But I can tell you something from experience, being the first member of any organisation or a team has a charm that I treasure and cherish. Hence, as a startup, when you hire your first full-time employee, remember that it has to be someone who treasures the job and will help you build the team further.
It is important to realise that the person who is joining you is taking an equal risk as you are in making your first hire. I have also witnessed that most successful companies always remember their first employees. Vineet Gupta, Founder, Jamboree, an Indian education company says, “At our company, some of the first employees are still there. There are about 300 people and I think there are about 15 people who may be 15 years since the start of the company in the year 2000-2001.” Founders always value the first few employees and they are the ones which set the foundation of the company. So, how do you go about hiring them and when? Here are a few considerations you might want to keep in mind before hiring.
What skills to look for?
Most people will suggest that you hire employees who impact your revenue stream, which is logical. For instance, Salespeople and Business Development professionals are the ones who directly impact the topline. However, in my view, the best bet is to hire your first employee in an area where you don’t have any expertise. When Mark Zuckerberg hired Sheryl Sandberg, he pointed out that, to be effective leaders, founders, and CEOs need to learn to set aside their egos and hire people they admire. Zuckerberg took his time with hiring Sandberg. “There are all of these things, for example, that Sheryl is much stronger than me at, and that makes me better and makes Facebook better. I am not afraid or threatened by that. I value that.”
Hence, if you are an expert in Finance and Accounting, hire someone who knows Marketing and Advertising. If you know Business Development, hire someone in Sales. Chetan Vinchhi, Founder, Lifetape followed the same rule while hiring the first employee, “After the initial ideation and product identification, we realized immediately that we needed a team to build it. Since none of the founders were hands-on programmers, this was in fact an urgent need. Our first hire was in Product Engineering and joined us three months after the founders came together.”
The first employee should either help in saving your time so that you get more business or should get you business rather, so that you can focus on day-to-day tasks to be finished.
Nikita Rana, Founder, Spotlight Consulting shares that for the first four months, she was a one person company. Once clients started increasing and work quadrupled, she realised that she was spending too much time on finance, admin and tech aspects where her core expertise did not lie. “It was then that I figured that if I spent my time in getting more business and hired someone to do the tasks that were routine, I’d be able to increase revenues and spend my time doing tasks I like,” she says.
Part-time employees or Full-time employees?
Scouting for talent is an ongoing problem for startups, but the first recruits are the most crucial. They are the ones who would refer other individuals to join, and also build a strong team. Startups often start working with part-time employees and eventually switch to full-time. So, how to really decide that you need a full-time employee? Chetan has an interesting tip to share, “Part-time employees are fine. Ideally they should convert into full-time engagement when appropriate. So, they should be people you would hire as full-timers (and conversely, they should be willing to join for full-time employment once you have the resources). It is important for part-timers to be motivated and productive. You need to have a framework to clearly articulate the expectations. You can motivate part-timers with equity, with appropriate vesting schedules.”
There are entrepreneurs who have had success with both the models as they are careful while hiring part-timers. Manu Srikumar, Founder, Denture Capital says, “ I always check for two things after I hire. One is ambition and the other is humility. We also ensure that we treat our part-time folks just the way we treat full-time employees. Also, before we hire someone full-time, we generally work on projects together.”
However, entrepreneurs like Nikita have had a bad experience while hiring part-time employees. She says that her learning is that when you’re starting out it is better to get someone full-time and in the same location as you. While she loves the idea of working remotely, it doesn’t work well for everyone. “I personally, had a hard time getting my team to work from other locations. There were many instances where I was left to handle entire projects by myself because the individuals I hired didn’t deliver. And if someone’s working remotely and they decide not to answer the phone and reply to emails, what are you going to do before a critical deadline?,” she mentions. Hence, it is important to have passionate employees as part-timers. We wrote a previous blog on how to hire effectively and you find some interesting tips there to scout for passion in prospective employees.
An office is not necessary before you hire full-time employees
If someone does not join you because they can’t work without an office, that person is not fit to work in a startup. You do not need to be established with an office, coffee machine and cafeteria, before getting employees to work. The person who joins you should be flexible. Manu from Denture Capital shares his experience, “We did not have an office and were working from my living room. People work because they enjoy the work they get to do and they also get to work with amazing people. Those are I guess the biggest motivations. Our first hire did not need a lot of convincing. When he had to choose between a regular 9 to 5 and a very exciting startup, he chose the latter.”
While hiring rules could differ depending on your startup requirements, here is a common tip by Abhishek Tiwari, Fellow, KStart Capital that one could keep in mind in the process of your first hire,“Entrepreneurs when hiring should bring credibility to the conversation– talk about last work experience, why did they start this company. If possible, get your mentors/advisors to join you who share your vision for the company. I got my dad who is a seasoned professional to the meeting- who could lend his insights on the business and add additional credibility.”