Teruel Carrasco, vice president of entrepreneur engagement at Valhalla Private Capital, has details how best to build and expand your startup team. Read more below:
The three most common reasons startups fail are having the wrong product, running out of capital and having the wrong team.
Today, I will focus on building your startup team. How do you attract, build, and expand your team as a startup? How do you keep them engaged, creative, and focused on tasks? How do you keep them from leaving for greener pastures? How do you structure a team to succeed while the startup grows?
The most important decision a founder will make is who will be on the team that executes his vision and mission. It is crucial that the team take as much ownership of the journey as the founder. A well-constituted team is critical as there are no grey areas in building and expanding a team at a startup.
Building a recruitment process that includes your “why” is critical to attracting the right talent. Every organization, regardless of size, understands that attracting and retaining talented individuals is critical to the success of an organization. A startup, however, brings up the “criticalness” factor to a whole new level. A wrong hire can, and does, set back a startup’s progress in ways that can derail it or even kill it outright.
For example, a startup set out to hire a sales director after identifying the position as a key role to fill in the company.
The founders had built a robust SaaS platform in the fintech industry, and the startup had secured a significant capital injection and was ready to expand and grow. They worked to create a fully committed founding team driven to succeed by building a high-engagement culture that fostered creativity, and employees were encouraged to focus on details and champion outcomes. The team was well synced.
After several rounds of interviews, the founders settled on a hire.
Their new hire had been a sales director at several fortune 500 companies and worked as a consultant in the financial services industry. With a stellar reputation in the market, an offer was extended and accepted. Unfortunately, it turned out the hire was not a good fit. He did not understand the unique nature of a startup, did not appreciate the culture and, in fact, wanted to dismantle it and replace it with a more top-down approach. This resulted in delayed growth and the evaporation of the carefully constructed reputation and sizable sales pipeline. The investors began to doubt the viability of their investment and, within a year, the startup shut down. Hire to culture is key; hiring the right fit is critical when contemplating growing your team.
But now that you’ve hired the team, how to you keep them from moving to greener pastures? Once growth momentum starts, it becomes critical that your key hires stay.
It is often the case that highly talented employees at growing startups get lured away by higher salaries, job promotion opportunities, and the perceived view that things are better on the other side of the hedge. One of the commonly used – but not only – tools to retain employees is stock options. No doubt these tools help, trumped only by culture. By building an inclusive culture, you give your employees the opportunity to be stakeholders. Culture inevitably trumps salary. Focus on building a culture that fits your startup and the personality (DNA) of your growing team. Remember that your culture will evolve, but if built on a foundation of inclusivity, open communication and empowerment you will go a long way in retaining your employees.
For example, a startup in Cyber Security wanted to build a culture of inclusivity. It knew that hiring and retaining key employees was necessary for both short-term and long-term success. The founders made a deliberate attempt to build a culture that empowered their employees to speak up in team meetings and make suggestions and that gave them the freedom to implement the suggested changes. This helped build a team where employees felt and acted like owners. and led to accelerated growth.
An often-overlooked detail – once you’ve begun hiring a new team – is the process in which you integrate them into their roles. Fast-growing startups often overlook this process as they’re in hyper-growth mode. But by building in the proper processes and structure before expanding your team ensures your growing team is given the opportunity to “hit the ground running.”
Another example was a startup in the robotics industry. It experienced the growing pains that come from receiving investor capital and new clients. The company was comprised of a small founding team and a few contractors. With the influx of capital and new customers, it needed to hire quickly. It had 20 open roles and began to bring them in as fast as possible. Many of the new hires were experienced software developers lured from “big tech” firms. Upon accepting an offer, they were given a laptop and log–in credentials to the developer portal and were scheduled to attend meetings with the product management team and the leadership team.
As exciting as it felt to be thrown into their role quickly, many were unaccustomed to the unstructured nature of their new environment. As talented as the new team was, it took them months to integrate into their roles. Those delays cost money, time and general morale. Having a structured onboarding process (even in a fast-moving startup) can go a long way to ensure your team actually hits the ground running.
Building and expanding your team the right way is essential for the short- and long-term success of your company. Many books are written about the right way to do it, but the key is to be deliberate. Think about who you want to hire, the culture they’re coming into and, once hired, how they onboard correctly to ensure they make an immediate impact.
A previous version of this article was published by Troy Media.
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