"Time spent on hiring is time well spent." Some EE Times readers might recognize this quote as the marketing slogan once used by a recruitment company. I chose it because it is true for all companies and critical in the case of a startup. Hiring is a company-defining challenge facing a startup CEO.
Unfortunately, the startup CEO faces the additional challenges that nobody knows his or her company and that financial resources are limited. The former element was made clear to me by one promising hire's explanation: he could brag to his mother-in-law that he worked for IBM (or plug in any other big company name) or try to explain what he was doing working for me at an unknown startup.
That's one potential hire that got away because that's a hard position to counter. Maybe it was for the best because this candidate did not have the required willingness to take on risk -- either facing the ire of his family or enduring the challenges of a startup.
Silicon Valley, of course, thrives on entrepreneurism and startups, so it benefits from a high concentration of risk takers who appreciate the trade-offs of working for an early stage company. For example, most candidates that I interview in Silicon Valley understand the mechanisms and opportunities associated with stock options. Indeed, most residents of Silicon Valley know of someone who has been handsomely rewarded from stock options. This dynamic is less prevalent when hiring in other areas and needs to be considered by the CEO when he or she is establishing new development or support centers overseas.
The first few hires are the most important because there's absolutely no margin for error. The wrong person can wreak havoc on a fragile corporate culture. The magic is finding the right people and that can happen in a variety of ways, starting with leveraging everyone's network, from the CEO and investors to employees and former coworkers. They will all be able to recommend good people with known qualities or someone who may know someone else with equally stellar credentials.
Experience versus youth and high energy is a debate that rages on. From my experience, any startup needs a base of people with experience over a cadre of smart recent college graduates. While the college grads have the enthusiasm and energy to take on any task, they may flail around a bit more than a startup can handle.
It's right about now that EE Times readers are shaking their heads and pointing to the various and wildly successful social networking startups with young, energetic founders and employees. I agree, but the exception does not make a rule and it is also important to differentiate between companies focused on solving a deep, complex problem versus the social innovators.
This is not meant to create a value ranking. Challenges are a part of all startups, but the ideal employee combination should be adapted to these challenges. Typically, the best corporate culture is one that's a mix of seasoned veterans complemented by inexperienced employees to build a motivated, creative team that works and communicates well. The first hires should be independent, self-motivated and project oriented, while the second wave of hires can be task oriented with less experience.
The hiring process is imperfect. It's reasonably easy to do a good job screening the technical abilities of candidates. However, most new hires fail to fit in because of cultural and attitude problems; technical competence is rarely the main issue.
CEOs have to accept that the hiring process is flawed, hence hiring doesn't go without firing. A CEO will know within a short period of time -- two months or so -- whether the new hire is a good fit. If he or she isn't, the employee needs to go. The adage is right: hire slowly, fire quickly. In fact, most startup CEOs I talk to agree that the biggest mistake they made was to wait too long to fix a hiring mistake.
Imperfect as the hiring process may be, it's an important one that should be managed as carefully as product development, especially for a startup.