Hiring for a Startup – Part 1

hiring for startupsHiring is an important part of scaling your business. You, or your small team of founders, cannot do it all alone: perhaps because you do not have the expertise, or perhaps it would take you too long to gain the expertise, or simply because your bandwidth is already exhausted.

Hiring for Startups differs quiet a bit from the hiring large corporations do. We all learn in college so more you know, and so higher your education, and so harder you work, so more desirable you become for an employer. This is not necessarily the case for large corporations.

Large corporations budget for headcount. Headcount is connected to power of individual executives hence there is always the desire to accelerate hiring – unless there is an incentive plan out there to cut headcount of course. Positions are more often described within a planning framework, perhaps directed by policies, than by the hiring manager who needs help.

Big corporations hire people for various reasons which we call market demand. Those reasons may or may not overlap with talent, education, or effectiveness to do the job. The person who gets the job is somebody who understands the specific market need. The market depends on the state of the economy, the culture of the industry and that specific employer, as well any goals of the hiring manager and his bosses. In addition, you need to make that credible, usually through a convincing storyline you back up with a resume.

This other universe is important to understand. You as a Startup think very differently. Any person you hire needs to bring you closer to growing revenue and profits, or at least traction, and raising more capital down the road.  The position you are opening as well as that individual need to fill that requirement. One wrong hire can break your neck because you might not have funds to hire a better fit or because that person leads other team members into the wrong direction.

For such reasons, a lot of Startups shy away to hire people coming from large corporations. Having worked with Fortune 500s for the last decade as a consultant, I can clearly see why. But this is generally a false and pretentious approach. Not every corporate employee is running around with a mug, wasting time in useless meetings all day long, and likewise not every corporate executive just is looking out for his bonus and making that media meeting or keynote. Likewise, not every government employee is ineffectively hiding behind red tape.

People who work for large corporations usually also understand how to scale a business, how do the things big, very big, and they also understand how to sell to other big businesses which are the people who have the money. It is like playing with a model rocket, or building a real one flying into orbit. Only people having worked for large corporations have experience how to run a business in scale and win significant market penetration – and how to pull it off.

Read part 2, how to find the right guy or gal. (SB)

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