A strong product ecosystem can take your startup to the next level of business. Product ecosystems are suites of interconnected, complementary solutions that businesses offer their consumers. The point is to offer a range of products that can address various consumer needs in connection with the [...]
By Joe Ori
They say no man is an island, and this holds especially true when it comes to starting a business. You can definitely start your own company solo, but if you’re building a startup – or when your business takes off and servicing your customers alone is no longer practical – a savvy entrepreneur has to begin the critical process of assembling the right team.
This is not something to take lightly. Securing the right team members can elevate your business more quickly and more efficiently, and can help you avoid a lot of problems. Hire the wrong people and your business’ survival could hang in the balance. If something seems off with your startup team’s chemistry, it could mean that you’ve made one of these three mistakes while hiring.
You sourced too close to the well
As the leader of a scrappy startup, an entrepreneur’s first instinct might be to tap their immediate network for help, and that instinct is not wrong. Your network will be critical at different stages of business growth. But it’s not always the best idea to work with friends, family, or people you know.
Free labor is not always free if it costs you time, aggravation, and money to correct mistakes that an inexperienced but well-meaning connection made. Further, when you get entwined with family or friends, and things go bad, personal relationships can sour as well.
You must have heard how ‘familiarity breeds contempt.’ And who can be more contemptuous – in a lighted-hearted, loving way – than your friends and family?
Everyone knows everyone else’s issues because there’s history there. Hire friends you’ve known for years, and all of a sudden, when you ask them to do something for the business, they might say, ‘Oh, you think you’re big time now, huh? You know more than me?’ Instant headache and aggravation.
Many a startup has lost leadership because of a rift between the founders. In the end, it may boil down to saying, “I love you, but we can’t work together.” And by that time, you may have lost too much.
You fell for the talent hype
Most of the time one of your founding partners will take on key positions as dictated by their particular skill sets. But sometimes a startup may need to source talent externally. In doing so, it’s important to not fall for the idea that you have to overpay to hire the best.
There are all kinds of “best” when it comes to talent, and there’s no need to spend exorbitant amounts of money to secure it. Draining your resources to pay for top notch talent is not the ideal business strategy and will do your startup more harm than good.
Rather than tapping a rising talent, you might find great value in someone who has a lot of experience, or might even retire soon. For instance, you can recruit an executive in the twilight of their career, and say, “Hey, you’re newly retired. Would you be interested in coming to work for this startup for free, and take a chunk of the company as immediate compensation?”
That gives them skin in the game and the incentive to make things work. You want them to say, “Yes. This is compelling. I’ve got enough savings to jump in and take this ride for the possibility that there’s a pot of gold at the end of the rainbow.”
The cherry on top is if new recruits want to invest money. It solidifies their loyalty and commitment to the business. Without loyalty and commitment from your team, you will face problems.
While your immediate network may not be the best place to start hiring, your extended business network can be a powerful asset when sourcing talent. The bigger it is, the more options you’ll be able to tap. Search for like-minded people who are open-minded, forward-thinking, and progressive. It also helps if they’re flexible, have high-level soft skills like communication and emotional intelligence, and are willing to pivot and adapt quickly to change.
Of course, the people you hire must have talent in an area that the company needs. But they also have to believe in your mission or product. After all, there may not be much money, if any, when you’re first starting out. You may have to use equity in the company as a lure to recruit, motivate and encourage your team if things get rough.
You found a bad apple – and ate it
You will make hiring mistakes. Even the most well researched, objectively vetted talent can be the wrong fit and ultimately end up a total disaster within the company. That’s not the problem. The problem is when you fail to address the problem, and that individual continues to damage and disrupt your leadership and your company culture, and test the patience of you and your team.
It’s best to go into any recruiting situation behaving like a world-class chess player – project all of the possible moves in advance. What could go wrong? Where are the vulnerabilities in your existing team, and in the new members you’re considering bringing on board? How could those vulnerabilities impact the business, for good or for bad? What are your contingency plans?
If you do hire the wrong person, fix it as fast as possible. It can be tough, especially if it’s a friend or a family member. Just make sure that HR processes are in place to minimize any fallout, and end the relationship professionally. Do your best to preserve the other person’s dignity, despite any bad feelings that may surround the situation.
It can also be difficult to let someone go, but it’s important to keep in mind that removing the individual isn’t personal. It’s business, more livelihoods are at stake than just yours, and you want to minimize potential harm to the business as well as to the company’s overall reputation.
At the end of the day, things will go wrong. Hiring is not an exact science, no matter how careful you are. Own any mistakes, then move on. With your team behind you, you can recover.
About the Author
Joe is the Co-founder of Michigan-based cannabis company Six Labs. He can be reached at: [email protected]