10 principles to build the right team
Giammarco Pacifico
Building the right team is one of the highest-leverage activities every founder should focus on from the very beginning.
Talent, not money, is the bottleneck for today's startups.
Even with all the money in the world, the wrong team will inevitably lead the most disruptive idea to the graveyard.
Every result in a startup is a lagging indicator of what the team has worked on in the past so getting the right people is the most critical decision for a startup's success.
Attracting, hiring and retaining the right talent is hard and we believe it’s too often underestimated at the earliest stages of a company so we’ve put together an actionable guide to give every founder a starting playbook to build the right team.
There are 6 parts to this guide:
- Before recruiting
- Recruiting
- Crafting a compelling offer
- Onboarding
- Retaining
But before going deeper into each playbook, here are 10 core principles for building the right team:
- Predictive information of future success lies in current or past performance
Theoretical questions and case studies lead to overthinking or engineered answers. Learning about specific situations during someone's professional experiences will let strengths, weaknesses and patterns emerge.
How someone has behaved in the past is the best indicator of how they are going to perform in your company.
If the person is looking for a new job and you believe they could be a great fit for your company, hire them for 3 months on a contract basis or make the most out of their probation period and you'll get the best information you could ever ask for.
But most great employees already have a full-time job and they'll only leave it if they get another full-time offer.
In this case, the key is to collect information about how they've performed in previous jobs. And the best way to do that is through a series of interviews, including reference interviews.
If you keep this in mind, interviews with the candidate also become a way to collect information about people the candidate has worked with in the past so you can reach out to some of them when doing reference interviews (more details on the different interview types and how to conduct them in the guide).
- Hiring means selling
The best candidates have many options and can work anywhere.
They might also be considering big firms and well-known companies with a strong reputation, not just your direct competitors.
To make sure they’ll work with you, you must build rapport from the beginning.
This will pay dividends even if they don't end up joining your company at the moment.
By making the effort to network with highly relevant top candidates, you are building a valuable long-term pipeline for your business.
Once you have your list of dream talents, make time to stay in touch with them.
Selling your startup to the best talent continues during the onboarding process: your goal is to make people believe at a gut level that your company is so amazing, that they would not work anywhere else.
This attitude does not come from a set of values on the wall but from your example as a founder.
Make sure you take care of every new hire as your startup depends on it … because it actually does.
- Business results are lagging indicators of the work your team has done in the past
Make sure your team is thrilled to keep doing the work.
This will determine present and future metrics.
It's the groundwork required to build great companies and if you focus on this, all other metrics, such as the ones investors care about will take care of themselves.
- Rapidly screening candidates at the very beginning increases your chances of hiring the right talent
Corollary: false negatives are acceptable, false positives are not.
Rejecting top candidates who did not make a great impression during the screening call is not ideal but it has lower costs compared to spending a lot of time and potentially hiring a candidate who turns out to not be a fit.
Great hires show to be star performers from the first interaction.
Mediocre hires leave you with doubts.
Your impulse would be to let them go through the entire recruiting process to answer your questions. Resist that urge and focus on other candidates.
"If you're in doubt, throw them out"
Anna Collins, former Amazon Worldwide GM of Prime Membership
- Changing jobs is rarely a decision taken in isolation
When it comes to co-founders or key early employees who are excited about the idea of working with you, don’t forget that there are usually other people in the equation who do not get the benefit of speaking with you and learning about the company’s potential.
This person might be the candidate's spouse or any significant person in the candidate's life. Maybe accepting your offer means working in a new city, changing habits, or even relocating to a new country.
If they still have any questions or concerns offer to have a call with them and make time to listen to their thoughts while reflecting back on what they are saying.
- Hiring corporate executives externally is a failure of training
Executives are managers of managers. And there is only one set of skills that every manager needs to become a great executive: how to manage well.
In addition, there is a massive benefit from providing this training internally: all of your executives and managers will use a similar management system, and therefore the company as a whole will operate as one unified team, rather than disparate teams tied together by a company name only.
External hires who are given executive positions are almost never a great cultural fit, especially after they've spent decades at a large company.
Ask yourself: which mindset, behavior and objectives allowed this person to succeed and climb the corporate ladder? Probably not the same ones you're looking for.
Before you reach a late go-to-market phase, your job is not to create expensive positions for executives going through mid-life crises.
When promoting internally, keep in mind that the best individual contributor (who has the most in-depth knowledge) is not necessarily the best manager or executive.
How to train internally?
Hire external executives or professional coaches to train the right team members into managers and future executives.
The right executive/coach will rapidly assess the areas of improvement for each individual and make actionable plans together with the team.
Given the abundance of highly paid consultants, startups should also consider compensating the advisor/coach with stock options (vested over time and based on results) or using a hybrid model to align incentives over the long term.
- Sloppy onboarding turns into sloppy culture
Even if you're a young unproven startup and you're super busy, find the time to make sure everything is ready to welcome a new team member and give them a clear plan of where to start.
Otherwise, their first impression will be that you, as a founder, are not to be bothered and you're too busy to give new joiners a good experience. This trend will carry on so you need to set the best possible example from the first hires.
- Equity buys capital: financial capital and human capital
Using equity as leverage can be scary but if you do it wisely, it’s what gives you access to both types of capital.
“The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.”
Steve Jobs
- Always be recruiting
Reaching out to your close network when your company is still unproven is simply a necessity. However, diversify your professional network as soon as you can, and make it a priority to constantly scout for new talent outside your network.
Whether you’re scaling your team or correcting a hiring mistake, already knowing who your next hire might be can make a huge difference.
- Invest time in a structured process to recruit, onboard and retain talent
Building teams is arguably the most important and never-ending responsibility of any company. No matter what happens, you'll always need to deal with this and having a process is key to avoiding unconscious judgments based on our internal biases and beliefs. The sooner you set up a process, even a very simple one to hire the first interns, the sooner you'll spontaneously start iterating on it.
Making it better over time will turn your company into a magnet for great talent.
The secret is starting now.
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Do you agree with these principles? Have you ever experienced any of them?
Share it with us.
Principles are useful to aim in the right direction but execution is what makes the difference.
These guidelines come from a tactical framework that has helped 100+ founders build and scale the right teams, which led them to raise over $350M.
Interested in learning how they did it?
You can now get a 53-page guide with the step-by-step playbooks they followed to hire, onboard and retain the right talent.
