When you are starting a business, you want to build a team of highly motivated, creative people who work well together. But there are also questions about which functions to fill positions for -- and when.
Much of the initial hiring effort goes into the product team -- in our case, early on that meant engineers and designers. You are, after all, moving from an idea to bringing a product or service to market, and the faster your team perfects and launches a product, the sooner you can start generating revenue, attracting new investors and growing your business.
In my years in private equity investing and as the founder and CEO of an equity crowdfunding site, I have seen many young, fast-growing companies go through the phase of rapid hiring with mixed results. Often overlooked in the rush to market are several key roles. Here are three hires any entrepreneur should make early and wisely:
1. Product manager. Founders almost always have a product in mind, and they typically designed it or are at least intimately involved in the design and development. This makes perfect sense in the early days and months of a business when it is evolving from just an idea on a napkin to an actual product -- whether that product is an online marketplace dependent on code or an organic ice cream dependent on cacao.
Steve Jobs, Larry Ellison, Mark Zuckerberg -- many of the great CEOs and founders have been consummate product people. But at some point early in a company’s development the founder/CEO has to fire himself/herself as product manager. The founder who remains deeply enmeshed in product management is probably not devoting the necessary time and energy to the many other critical tasks required to build a successful company, such as sales and marketing, regulatory issues, production and distribution and investor relations.
Find a product manager early on who can be the bridge between the CEO’s vision and objectives and the development of the products to reach those goals.
When it comes to the nuts and bolts of recruiting a great product manager, one of the best pieces I’ve seen was from former Google Product Manager and current Google Ventures Partner Ken Norton: How to hire a product manager. (disclosure: Ken is a mentor of mine and GV is an investor in CircleUp). The first step towards hiring a product manager? Firing yourself.
2. Office manager. Many young entrepreneurs underestimate the value of an office manager. They see the role narrowly -- focused on taking phone messages, greeting visitors and ordering lunches. Nothing could be further from the truth.
More than almost anyone else, this employee can set the tone for the office, and create a vibe that cultivates talent and joy. Starting a business involves strategy, product development, hiring, marketing and investor relations on one hand, and on the other executing on the day-to-day tasks required to keep your growing team happy and motivated. What your office manager cannot do will typically fall to you as the founder.
A great office manager makes your company better and more valuable. To put it simply, after reaching 10 to 15 employees, I don’t think you can have a great company without a great office manager.
3. Regulatory lead. Also important, but for very different reasons, is someone to steer your business through the myriad regulatory matters that will invariably crop up. This role is frequently an attorney, either on staff or at an outside firm. A young company may not have the resources for a full-time manager of regulatory affairs, but you should have access to the firepower you need. Browse recent headlines and you quickly realize that regulatory matters can range from federal laws to state regulatory roadblocks, such as Tesla’s battles over laws protecting auto dealerships, to local ordinances, such as cities imposing limits on Uber, Lyft and Sidecar.
Disruptive business models, such as online marketplaces, are prone to attract the attention of politicians and regulators, frequently stirred up by entrenched competitors.
Just as a startup should have a business continuity plan to account for potential disruptions or crises, you should do a genuine evaluation of real and potential regulatory risks that your business could face. From that assessment, you should invest sooner rather than later in the appropriate regulatory resources. If you don’t fill the role of regulatory lead, you could find these matters sucking up internal resources at points when you least expect it.
Every startup is unique, and every growth story has a different trajectory, but from my experience, I would say these roles are three of the most commonly overlooked in the process of building out an effective team. Fill them early and with superstars, and you’ll smooth the day-to-day operations of your business, avoid disruptions in the future and be able to focus more effectively on growing your company.