When you think of the world’s most successful entrepreneurs, what comes to mind? You might think of people with innovative, outside-the-box ideas, coupled with that perfect combination of grit, charisma and idealism – the ones who are committed to making their visions a reality.
In practice, however, there’s much more to a successful entrepreneur than big dreams and a persistent attitude. The very best entrepreneurs, who build the most lucrative companies, are those who surround themselves with the most capable and enterprising teams who can execute and bring their ideas to fruition.
Of course, like so many aspects of building a business, finding the right people to round out your leadership team and staff is much easier said than done. That’s why we recently sat down with Peter Petrella and Carl Kutsmode with TalentRise, an Aleron company focused on executive search for emerging, high-growth companies, to talk about why and when startups should prioritize hiring as they start to secure more funding – and how to do it in the most effective way possible.
At what point should startup founders start to build out their leadership teams?
Some founders are thinking about their eventual workforce from day one, even before their product or service is fully realized. This isn’t all that surprising, since it’s not only a desire to build something from the ground up that motivates so many entrepreneurs; many are also inspired by the idea of creating jobs and elevating other talented individuals within their communities.
“As a best practice, founders should really start to build out their leadership teams once they’ve completed their series A or initial round of funding,” Petrella advises. “At this point, it’s time to start putting your big plans into action, and realistically, that’s going to require the efforts and brainpower of more than one or two visionaries.”
It’s during this critical time, when your first round of funding is hitting the bank, that founders should be especially careful about stretching themselves too thin or operating too far outside of their wheelhouse.
“Good leaders often wear many hats, but they’re also self-aware. Founders need to be cognizant of their own shortcomings and where additional leadership team members with complimentary skills are needed most,” Petrella adds.
To ensure you’re hiring the best person for the job, Kutsmode cautions against hiring close friends and family into key leadership roles without exploring a range of other qualified candidate options for comparison.
“At this crucial stage of the business, hiring a family member or friend who could potentially do the job, but may not work out, could unfortunately end that relationship both professionally and personally. These complications could make the eventual decision to part ways extremely difficult, even if it’s the best thing for the business long-term,” he says.
Why should founders focus on rounding out their leadership team before hiring individual contributors?
“Strong, competent leadership is the bedrock of any successful business, and startups are no exception,” Kutsmode says. “Leaders who are working to get early-stage companies up and running are doing a lot. They’re constantly shifting gears. There’s less time and bandwidth for hand-holding, delegating, and managing. Anyone you bring on at this stage should be a proven self-starter and understand what needs to be done to get from point A to point B. That’s what will keep things moving on the right trajectory.”
And when the time comes to hire people for those individual contributor roles, having this foundation – a team of multifaceted but specialized leaders – will give your team a better grasp of what to look for and how to manage your growing workforce.
For example, a chief product officer should be able to offer expertise when building out the software development team, while a vice president of marketing can offer insights into what the social media manager’s job description should look like to set up your digital marketing efforts for success.
“As your company grows, it’s critical to have leaders working with you who can hire, manage, and scale high performance teams,” Kutsmode adds. “That means thinking longer-term and identifying people who will bring value not just in the early stages of growth but also as your business really starts to take off.”
Where and how should founders start their hiring process?
Your leadership team should consist of people who can help you meet your investors’ expectations. To that end, founders should seek out peers who bring a wide range of experience and expertise. While you’ll all share the same vision, diversity of thought is critical to startup success, which might require you to look beyond your go-to contacts and existing network.
“Founders often default to their own personal connections – former colleagues, classmates, etc. – when they begin to build out their teams,” Petrella explains. “In some cases, your existing network may be a great place to start. But you should also actively look for people outside of that circle to ensure you’re finding the best possible candidates.”
And in terms of timing, building out your leadership team is certainly a top priority. But that doesn’t mean it should be done so quickly that quality is lost in the process.
“Rushing to hire can be a bad move for any business, but this is especially true in the startup environment when resources are limited and you may only have one shot at doing it right,” Kutsmode adds.
You can also always reach out to the team at Viaduct to help you find the right individuals at any level to grow your startup.