Building a team is the biggest underestimated challenge that a tech startup faces in its early days. Because it’s not just about building any team and start working on a product. It’s about THE best team you can come up with, to support your vision while not neglecting their own individual goals. In this piece (built on the insights shared in a meeting at TechHub Bucharest) four successful startup founders & executives express their ideas and experience about the long-term effects of starting with the right people beside you when you’re an early-stage, even first-time entrepreneur.
Let’s put things into context: tell us some general things about the teams you have built around your current startup.
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We’re currently at a stage in which, although we have grown from 10 to 53 people in recent times, we are thinking about how to expand further. This significant team growth comes along with a need to re-think our company culture. When you grow fast, you have to be careful about whom and how you recruit further on.
The marketing team at 123ContactForm is made of 10 people, which was the same number of people I had on the team when I joined the company (editor’s note: Irina joined the company in October 2015). The most significant shift we’ve made lately is not in team size, but in the mechanics of working together. Initially, we were not a team, from a mindset point-of-view. Now, after one year, we are sharing the same vision and working towards the same goals.
Robert Knapp, Founder & CEO Cyberghost
We are currently a team of 44 people spread between Bucharest and Berlin. We are aiming to grow with another 15 to 25 people in the near future. But only two people of the initial founding team are still with Cyberghost. In my opinion, it’s a mistake when you reach a point where you have to redefine the company culture. You have to be good at it from the beginning. Also, bear in mind it’s also complicated to add people into an existing culture.
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We have been really mindful on how fast we grow our team. Since starting the company, we have grown to having 13 people in the team and, although we’re constantly looking to hire, we are careful about how the speed of our team growth can influence our development as a company.
You’re the founder, and you’re in a position to make those first hires. How do you decide whom to hire, what positions to fill up first?
GreenHorse Games: Before hiring the first employees, don’t ignore the actual first hires or collaborations you make:those with your co-founders. When you’re in your early days, you usually try to convince people without having money as the incentive, since budget is very limited most of the time and your runway (absent any financing you may have raised) is usually 6 to 12 months. As a result, you have to be careful on the employee expenses you take on board, and also on the responsibility that you take on. People come to work with you because they trust something about your story. You can’t think of them as disposable after 2-3 months. All in all, when hiring, always have a realistic plan about your possibility to sustain these new expenses.
Cyberghost: Ask yourself this simple question: can you pay the people you are looking to hire? If not, you’re not looking for employees – you’re looking for co-founders. The right results for your hiring process also relates to what kind of people are you looking to hire. Do you want people with experience? Those people are looking for money. Are you ok with hiring juniors? Then your expenses with them will be lower, and you may be able to find them easier.
I apply a certain strategy when deciding who to hire when I have to build a new department. I ask myself if the people I am interviewing or discussing with share the same values as myself. Do we have the same spark when discussing about a certain thing? Is there a chemistry that can be discerned from the way we interact? In addition, I try to look for people which come from or are recommended from my direct close network, in order to maximise positive results.
In the startup world, there’s this talk about whether it’s acceptable to ask or receive equity as part of the employee benefits package, especially for people receiving low salaries. What’s your take on this?
Omniconvert: In my experience, people are not that aware of how equity in an early-stage startup actually works. In our startup, we have an equity plan in place. However, to be able to think about asking for equity, you have to feel comfortable with your skills and have a good level of self-esteem. As a side note: apart from equity, try to influence people in understanding that the best thing an early-stage startup can give them is the energy of building something that can be used by people all around the world. It’s rare that they will be able to find the same type of energy in a corporation.
GreenHorse Games: People should not join an early-stage startup for equity. They should be connected to the company’s vision and values. In our case, it happened that we were the best solution at a given time for the people that applied for our positions, and we were recommended as a good fit by a third-party. Taking this into account, it is a good idea that your initial hires be people that you know well.
Cyberghost: Equity, stock option plans, any discussion around these topics is useless. It’s useless for a startup that is not generating recurring and growing revenue. Your early-stage startup is worth nothing! When somebody starts to buy something from you, or your company becomes attractive to a potential acquisition, then that equity might mean something. For a startup, that usually happens in 5 to 7 years after you found it.
What is the biggest challenge you have come across while building your team?
Cyberghost: It has to be building your core team – your wolfpack. It’s complicated to do that in an environment where you fight for the best founders and employees not only with other startups but also with established companies that have a lot of the leverage that you do not have.
GreenHorse Games: The adversity of the first months or even years of founding a startup is tough to handle. You have to say to yourself that there will be better times, that you will find the people you are looking for. If you’re a high achiever – which you have to be in order to be successful as a startup – it’s complicated to meet compatible people.
123ContactForm: Be patient. It might be a long time before you find who you are looking for, but it’s better to make no hire than the wrong hire.
Omniconvert: When an important member of our team lost her life. It was then we realised we had not looked enough into each other’s eyes, past our day-to-day professional activities. Working in a startup means also being part of a big family where emotions should be shared.
How do you manage people that underperform?
123Contactform: You have to ask yourself why they started to underperform, after you have given them a couple of chances to regain their focus. You always need to link cause and effect.
Omniconvert: It may not be the fault of the underperformer. Maybe the KPIs you have set yourself are not good, or maybe they are not properly set. Have private meetings with the underperformer, as well as other key people in the company. Try and see what the cause of underperformance is. Maybe it’s something in the direction of the company that is causing this. Also, having underperformers may be a question of your own mindset. You cannot have excellent performers on all the positions. You also need people who are good at keeping the team together and linking the “superstars” together.
Cyberghost: A good question to ask yourself is whether the person is underperforming momentarily or she is an underperformer by nature. You cannot evaluate that from the beginning, so you have to adapt yourself on the go. Try to put them in another position. Or, on the other side, re-evaluate your KPIs and see whether they are not insanely impossible to attain. There are cases in which, regardless of how great things are going in the company, some people may find themselves displaced. At the same time, there are some people that you can’t fire because they bring the team together.
GreenHorse Games: Does underperformance come along with a lousy attitude, or not getting involved enough? Then your decision is simple. If other personal problems intervene, it’s your duty to try to be supportive. Be careful about the decent employees. They may be doing their job, and at the same time not push towards helping other people in the company and sharing the vision.
These being said, we can all agree that building an A-star startup team… it’s not easy! Even in the biggest, most stable corporations, putting together a performing team can be a tough process. All in all, the main takeaway from here it’s pretty simple: invest in long-lasting relations with your team members. Keep them inspired and focused, and you’ll always have a dream team working together with you.