Hiring for Lean Startups: The First Few Hires

Editor’s note: This is a cross post from Flow Ventures written by Raymond Luk (LinkedIn, @rayluk). Follow him on Twitter @rayluk. This post was originally published in January 12, 2012 on Flow Ventures.

CC-BY  Some rights reserved by Maximus_W
Attribution Some rights reserved by Maximus_W

I was having coffee with a founder the other day and we started talking about his hiring plans. Since he’s a non-technical founder (which Ben Yoskovitz claims is a dead-end to begin with) he had several top coders in mind, all of whom were earning big bucks with larger companies.

“I’m paying them a little bit of money but they’ll join full time once I can raise money,” said the founder. It’s something I hear a lot, especially from non-techie founders.

I went back to review some blog posts on Lean hiring, and I came across Eric’s post “Lean Hiring Tips” and Mark MacLeod’s “Fat Hiring for Lean Startups“. Both are worth your time. But I think they’re also written for startups that are already up and running and need to expand. I’m interested in very early stage hiring, e.g. when you’re one person looking for a co-founder or you’re two people looking for your core team.

Companies always take on the characteristics of their founders and in the rush to scale, I find many startups don’t stop to consider how they’re establishing the DNA of their company. The first few hires are the most important ones you’ll make.

  • Hire for an experimental mindset – Look for people who enjoy encountering problems, designing ways to solve them, and finding proof of success or failure. Skill at building, whether it’s software or a marketing plan or a sales funnel, is irrelevant at this point. You need people who will volunteer to scrap their plans, not fight you when you want to change course.

How? Join a hackathon, Lean Machine or just create your own (laptop + Starbucks = hackathon). Give your (potential) team a crazy challenge and see who exhibits the right behaviours.

  • Hire generalists – A lot of people will disagree with this advice. If you can find the best Python developer in the country go for it. But only if she’s also willing to cold call customers, crank out some Web site copy and help you whiteboard the business model. Your #1 focus is to find a business model that works. The latent technical talent on your bench won’t help you unless you graduate from this first phase

How? Again, hackathons are great practical tests. No matter what their skillset, look for passion about your business model and solving customer problems.

  • Prioritize UX over development – This is easier said than done since there’s a shortage of UX talent. But it’s better to have a kick-ass UX person and a mediocre developer than the other way around. UX will help you find your business model and most (good) UX people already have an experimental mindset and generalist attitude

How? Actively seek out UX people, not just developers. You may need to work at a distance if you can’t find local talent. Consider working with less experienced people if they can prove themselves through testing.

  • Get skin in the game – Leaving a six figure job to join your startup for a paycut is not skin in the game, or not enough in my books. Hire those people later when you’ve found your business model, have money in the bank, and need to scale. Skin in the game means working full time, just like you are. It means putting their reputation on the line, raising Ramen funding from friends/family/spouses and saying “I’m going to see this through until we fail.”

How? Stop feeling like you’re a poor startup that can’t afford to pay top salaries. Those aren’t the droids you’re looking for. Think of finding your co-founders like raising your first round. You need to get them excited to invest in your business.

I know this advice seems to apply better to “Web” startups than general technology startups, which is a common criticism of Lean startups in general. But I think it applies more broadly. If you hire for the right attitude, you not only solve the critical product-market fit problem, but you set the DNA of your business right from the start. I guess I haven’t seen too many examples of startups failing because they lacked a specific technical skill. They probably think they failed because of it though.

In the end, I guess “hiring” is the wrong word to begin with. You’re looking for people to co-found a business with you. You aren’t buying their skills, you’re asking them to invest in helping you shape the course of your business from the very beginning. Maybe not all of them (including yourself) will be able to scale up with the business. That’s a problem for another day.

Editor’s note: This is a cross post from Flow Ventures written by Raymond Luk (LinkedIn, @rayluk). Follow him on Twitter @rayluk. This post was originally published in January 12, 2012 on Flow Ventures.

Founders and Funders Toronto – February 16th, 2012

The last Founders and Funders dinner in Toronto was almost exactly two years ago. A lot has happened in that time and we thought it was time to sit down and break bread together again.

The Founders and Funders dinners are a series of invitation-only dinners that are held across Canada several times a year. They are a sort of summit on the state of each community and we do our best to make sure that the best startups possible have a chance to meet the most respected and active investors who are doing deals in those cities. There is always a mix of locals and people who come in for the event as a way to get connected.

We believe that if you cannot sit down and have dinner with someone, then you probably shouldn’t invest in or take investment from them. This is a great chance to apply a social filter to the dealflow in any one place.

What is it?: An invitation-only 3 course dinner. Cocktails before, cocktails after….

Who is coming?: The top investment-ready startups and active investors in Canada.

Where is it?: Downtown Toronto

When?: February 16th, 2012 at 6:30pm

How much is it?: Tickets range from $125 (startups) to $500 (service providers)

We are now accepting requests for invitations and the first round of invitations will go out this week.

To apply please use this form >>

We have also decided to include a brief fireside chat with Daniel Debow at this dinner. We rarely do this sort of thing at a Founders and Funders but 2011 was such a great year we thought it would be fun to look back on the ups and downs of Rypple through the years and how they got to their eventual exit, some of which was written about in Forbes this week.

Daniel and Rypple have also been a big part of the Canadian startup community and he has also been an active angel investor recently.

We are excited to hear what he has to say about how we can help build more great Canadian companies and how to build awareness in Silicon Valley when your HQ is back here in Canada.

We hope you will join us as we kick off another great year for the Toronto and Canadian startup community.

We will be announcing Founders and Funders dinners in other cities soon as well.

 

While startup CEOs are scrubbing toilets, CTOs are building things

Editor’s Note: Gavin Uhma is the CTO of GoInstant.com, a Halifax, NS based startup. 


Technical Co-Founders need to find their voice.

I’ve been in the fray of building a startup for over a year now and normally I don’t think to write publicly. I usually feel like I am already too busy communicating with the team, programming, and planning. In that year I’ve come to the realization that there are not many resources out there for technical co-founders.

We are constantly wrestling with make-or-break decisions: What should you be doing at each stage in your company? How do your responsibilities change as the team grows from the founders to the first hires? What about at a team of 10? Of 50? Of 100?

I can’t help with 50 or 100 yet, but I can help you get from the idea to a founding team, to a team of 10, and I will continue to blog at each stage of growth as I learn what I need to do next.

This is my second time growing a team to this size and I know for certain that we’ve created more value this time.

Why are CEOs toilet scrubbers?
Jevon is more qualified to answer that than me, but in the early stages a CEO needs to keep the fridge stocked and the bathroom clean (a job description Jevon reluctantly accepts as true). They create a cool office environment. They are the Janitor, Caterer, Secretary, Executive Assistant, and more. A startup CEO handles PR, HR, product management, recruiting, marketing, investor relations, accounting, and anything else that needs to be done to keep the gears of a startup moving smoothly.

There are plenty of resources out there for early stage Business Co-Founders. Everyone loves and appreciates CEOs already. They are by default, the face of the company.

I’m starting to blog so we can all learn more about the responsibilities of startup CTOs.

Why are CTOs so awesome?
Technical Co-Founders are building the product. We’re pulling late nights so that demos run smoothly the next day. We’re building what will be bought and sold. Investors are attracted to our efforts. Customers find value in what we build. We are the VP Engineering, Project Manager, Product Manager, QA Engineer, DevOps, UX Designer, UI Designer, DB Engineer, Recruiter, etc. We’re responsible for performance, security, stability, front-end, back-end, training, technology roadmaps, patent filings, and more.

How do CTOs create assets?

  1. We solve difficult problems with new technology to fulfill a big vision.
  2. We attract engineers who are better than us to accelerate the roadmap to that vision.
  3. We secure the intellectual property and data of our applications and users.

The end result is an asset of true value – An elegant and novel solution developed by a team who have grown to be absolute experts in the problem domain.

Yin and Yang
The truth is I can’t talk about what our technical team does at GoInstant without constantly being reminded of what Jevon, Dave and Ben do. One side is just not effective without the other.

It’s important to emphasize that none of the assets matter if you never find your customers, investors, partners and potential acquirers. You might build a beautiful technology, but without a product focus and real customers, technology rarely wins. Business Co-Founders, do your thing.

Value
There needs to be substance behind popularity or you’ll wash up quickly. You create value by packaging up and presenting the collection of assets in a meaningful way.

If you want to build a valuable company you need people to care about what you’re doing. You need customers who value your vision, but ultimately there needs to be something impressive under the hood.

There are many startups that are solving incredible technical challenges but without a compelling go to market, they get lost in time. If you’re in this position the best advice I can give you is to find an awesome Business Co-Founder. “Build it and they will come” does not apply.

There are also many startups with popularity and flair but no substance. At the end of the day, if you don’t have a big vision and a technology to back it up you’re going to come off as a poser. Find an awesome Technical Co-Founder. Be an awesome Technical Co-Founder.