Hiring is notoriously difficult for early-stage startups. Limited budgets — and a lack of established processes and proof of market fit — can make a fledgling operation a tough proposition for the best candidates. However, getting the right people through the door is crucial to growth.
For Glen Waters, head of early-stage practice EMEA at Silicon Valley Bank UK, team quality is the “single biggest predictor of success”.
“Getting the right people makes everything else easier,” says Waters. “Hiring and putting in the right foundations is the hardest thing to get right and often doesn’t get the attention it deserves. Getting it wrong can really slow down your startup and even kill it.”
This is how — and who — to hire as an early-stage startup.
The right attitude goes far
Founders should prioritise looking for traits and behaviours in their early hiring efforts, says Waters. He cites a passion for the company’s mission, adaptability, relentlessness, a proactive attitude and above all else, a growth mindset as the most important characteristics in the pre-seed stage.
Mindset and having the right attitude are the most important things — skills can be taught but mindset can’t
“Mindset and having the right attitude are the most important things — skills can be taught but mindset can’t,” he tells Sifted. “You need a growth mindset and to be able to cope with all the challenges of being in a startup with its ever-changing decisions and directions.”
For example, payments curation platform Paytrix adhered to this school of thought when it first started hiring, and continues to prioritise traits over skills as it grows. The business has raised $5m of funding in its recent pre-seed round, and now has 25 employees based across Europe.
Eddie Harrison, Paytrix’s cofounder and chief product officer, says there is no set profile of candidate that his team are looking to engage, but they instead hire for employees who possess intuition and are analytically minded — something he says hiring managers often find applicants lack in combination.
“We value people who can make a decision when there is a lack of information, but also those that can see patterns and make informed decisions well,” says Harrison. “We want people who don’t just want, but need to make an impact — what we are doing isn't incremental, so we need people to be comfortable making big swings.”
Who should you hire first?
Waters says the first hire will typically be in one of four roles:
- An operations manager, who becomes a hybrid chief operating officer/general manager position that can “make the business tick”;
- A salesperson that is willing to get their “hands dirty to hunt down and close deals”;
- A marketing all-rounder who can “wear multiple hats across web design, SEO and email”;
- A product manager which is “essential for tech-focussed businesses”.
But this is by no means a hard and fast list all startups should follow. Passionfruit, a platform that matches companies with freelance marketing specialists, has recently secured $4.3m in seed funding and has grown to 15 employees, already had a lot of these skills in place with their founding team. They instead prioritised hiring a customer success lead.
“For us, there is nothing more important than retention and we wanted to ensure that companies that work with Passionfruit specialists have the best possible experience,” says Raffi Salama, Passionfruit’s cofounder.
Build a structure as you grow
Out of necessity, the hiring process of most early-stage startups will likely be conducted by the founding team, with no real set process or methodology. But as funding is secured and the business begins to scale, the pace of hiring will accelerate.
Hiring fast is common in competitive labour markets, especially when you have money burning a hole in your pocket from funding
“Hiring fast is common in competitive labour markets, especially when you have money burning a hole in your pocket from funding,” says Waters. “You want to be seen to be implementing your business plan, but the ‘hire fast’ mentality can create all sorts of problems including a toxic culture. Impulsive and poor hires could also damage market reputation.”
Therefore, it’s better to implement a hiring strategy as quickly as possible, formalising processes to avoid rash decisions that can stunt growth.
Carolina Mem Correa, Paytrix’s head of product, says the company implements a consistent approach.
“The process has become more formalised,” she says. “What started off as a couple of founders’ calls has now become a first-stage interview, followed by a technical stage, and finally a call with one of the founding team. We have put in place a framework so that the process is as consistent as possible across all interviews, so all candidates get a fair opportunity.”
Mischa Collins, Passionfruit’s marketing manager, reports a similar formalisation of the process. While the essence of the process hasn’t changed, “there are more people involved other than our two founders — which means more interview stages in the process”.
Hire diversely from the start
Both startups also stress the importance of hiring diversely as quickly as possible. Salama says hiring people from different backgrounds and with various viewpoints is “the smart thing to do” as “the greater the diversity of perspective within a team, the better the bottom-line business outcome”.
At Paytrix, the team leveraged the expertise of one of its investors, VC firm Better Tomorrow Ventures, to help build its diversity protocols. The firm has a member of their team tasked with supporting portfolio companies with their hiring strategy, auditing job specifications and postings to make sure that they are as inclusive as possible.
VCs can play a key role in talent acquisition: They can actively open up their network of contacts as well as providing advice on team structures
“We’re building solutions that will be touched by consumers all over the world, so we need a global and inclusive approach to building a product, and that starts with the people who are doing the building,” says Aran Brown, Paytrix’s cofounder and CEO.
“We’d definitely recommend adopting policies around diversity from the start. In all things, you have to put your best foot forward (and first),” he continues. “The longer you wait to implement these policies, the harder they become to imbed.”
Waters says the best investors will provide hiring support for their portfolios — filling gaps in knowledge and easing expansion.
“VCs can play a key role in talent acquisition: They can actively open up their network of contacts as well as providing advice on team structures,” he says. “Some VCs are also seeing that there is a gap and have a talent function to help their portfolio’s scale.”