How to Make Smart Hires on a Tight Budget
Growing a team is an important (and intimidating) step for a startup. And when money is tight, the pressure is on to get every hire right.
Ray Dalio, the founder of Bridgewater Associates, who’s known as the king of hedge funds, is famous for saying, “Hire right, because the penalties of hiring wrong are huge.”
These are obvious words from a brilliant man. But the problem is, there’s no script for hiring “right” when you’re in startup mode. You have a hundred different needs but can afford only a handful of positions to do the work. So before you begin, do yourself a favor and lower your expectations. You don’t need to make many hires all at once, and you don’t have to fill hyperspecific roles in your company. Rather, you just need to find the right types of people who will best support early growth.
What are the right types? To find the answer, look at your own biggest weaknesses. Where are your blind spots? What is your Achilles’ heel, the thing that could have a crippling effect on early-stage growth? When you know the answer, you’ll know your hiring initiatives.
In my experience, startup founders tend to be weakest in storytelling, industry expertise, and product development. If that’s the case for you, you’ll want to focus on hiring at least one of the following people: a visionary to drive your marketing, an industry leader whose knowledge will help you accelerate, and a technical wunderkind who can transform your product. Don’t worry about roles and responsibilities; at this stage, you’re focusing on creating a well-rounded team … even if it’s you and one or two other people.
Now that you’ve identified the type of person you need to hire, you’ll need to filter for who’s the best fit. Keep in mind that the survival and ultimate growth of your business depends much more on values than skills. Early-stage companies need a shared vision, mission, and purpose. You don’t need everyone to agree, but you do need trust and alignment. Ask early candidates why they value the business, and -- most important -- how they would contribute to and further improve the culture. This way, you can avoid groupthink or too much homogeneity, both of which hinder startups.
If you can’t afford to fill all the gaps, you can also get creative with your resources. Despite what many people believe, successful growth is not dependent on building a big team filled with skilled employees. It’s entirely possible to find quality contractors who are both readily available and adaptable to almost any business. It’s a benefit I’ve seen work time and time again for startups.
Here’s how I approached it: When I was building Pen Name Consulting, where we blend strategy and content with analytics, user experience, and data to grow our clients’ businesses, I knew I needed help with the analytics and user optimization part of the business. Those were my weak points. So for my first hire, I pried my brother Jordan away from his data-driven life at Deloitte and brought him aboard at Pen Name. He had the skills I didn’t, and I trusted him to share my vision. For two years, we were the only full-time staff. We outsourced the rest of the work until we had enough growth to add to our team.
What’s next for you … and, for that matter, for us? Don’t worry about it now. You’re not hiring the team that will necessarily be in place in five years. The staff that gets you from zero to $1 million likely won’t be the same staff that takes you to $50 million -- and that’s OK. A long-term vision is important, but short-term focus is what you need to survive and advance.