The order of priorities may vary, but building a strong team is essential for the long-term success of any startup. By strategically navigating the product, funding, and team building journey, entrepreneurs can lay a solid foundation for growth. The author takes on this topic next in his ongoing series on business asset management
“I can do it all myself.” This is what some entrepreneurs believe when they begin. Now, while it is true that founders often wear multiple hats in the early stages, building a strong team is crucial for long-term success and growth.
But here’s the catch: When should you really build the team? What comes first? Product, funding, customers, or team?
If you have been following the asset series for a few months now, you already know that quite a few things come before you can think about hiring your very first team member.
So, the first key point here is—for a startup, the team doesn’t come first but much later.
When the time is right…
However, once you are done with those steps, you will reach a point where getting that first team member becomes logical.
But that doesn’t mean you get another version of yourself on board. A common sentiment I hear from startups is that “I should hire people who think like me.” I understand that this thinking comes from an expectation of aligning your vision with each team member. But vision alignment should not drive you to hire replicas of yourself. Rather, hire for diverse perspectives and backgrounds; that is invaluable. These team members will bring fresh ideas, challenge assumptions, and lead to innovative solutions. When you embrace diversity, you significantly enhance your venture’s growth potential, which then obviously leads to increased value.
The same goes for the thought process of hiring for the right skills. While skills are undoubtedly important, building a successful team goes beyond that. Consider factors like cultural fit, shared values, and the ability to collaborate effectively. I understand that when you have just started and hired the first few employees, there is no group, so no culture as such. However, culture is not only about how a group of people behave together. It is also about the principles your business is based on and the values you as a founder want to imbibe in doing business. Ignoring that would likely result in a lack of cohesion, and the team, no matter how small, will struggle to work together.
For early-stage startups, the team plays a significant role. Many investors do recognise that a strong team significantly increases the likelihood of success. Add to that the team’s experience, expertise, and track record. A capable and dedicated team attracts more investment, increases the startup’s valuation, and makes it more appealing to potential acquirers or partners.
Which roles should you hire first?
For a startup, some roles are more important than others, simply because of cash flow reasons and priorities at each stage.
For a technology-driven startup, developers and a back-end team can be crucial for establishing a solid delivery mechanism. However, in certain scenarios, customer-facing roles might be more important, especially when your company might still be in the validation phase. In that case, development can still be outsourced while you get your own customer success managers in place.
Sales and business development will eventually become a necessity but not at the beginning. The same goes for administrative staff, if you are thinking of any.
Operations and support functions will carry more importance if you are building a service-based business.
A biotech startup may prioritize scientific expertise and research capabilities, while a consumer goods startup may prioritise roles related to product design and branding.
The key here is to identify the critical roles that align with the startup’s core objectives, competitive advantage, and market needs.
What to look for?
This point is quite broad, depending on what you are hiring for, at what stage, or what your goal is. Here are some considerations that might come in handy for you.
Depending on your current stage. If you are in the early stages, you are likely focusing on the development of the product. So, technical roles, such as software development or engineering, should take priority. Look for candidates with strong technical skills, problem-solving abilities, and a deep interest in innovation.
However, if the product or service is already validated, then focus on scaling. Look for candidates with a proven track record in generating revenue, building partnerships, and driving customer acquisition. An entrepreneurial mindset, strong communication skills, and adaptability are valuable qualities.
If you are already beyond that, you are essentially looking for people with experience in scaling operations, strategic thinking, and leadership capabilities.
Depending on your business goals. If you are in a position where you are hiring for a specific requirement, for example, if your next logical step is reaching out to the international market, you will need people with global market entry and localisation experience.
However, not every hire should be looked at from an immediate need perspective. Consider the long-term potential of each role and candidate. Evaluate their ability to adapt and grow with your venture as it evolves. And look for people who show a commitment to personal and professional development with a continuous learning mindset.
What’s more important – qualifications or experience?
This answer can be simpler than you think.
Qualifications are easier to assess. Resumes, interviews, skill assessments, or checking references can all help ascertain them. However, this approach is only relevant if you are hiring team members for roles that require specific technical skills, industry-specific knowledge, or compliance with regulatory requirements.
But sometimes hiring only based on qualifications may overlook other valuable qualities, such as problem-solving abilities, adaptability, cultural fit, and the like.
When it comes to experience, we are talking about someone’s past work history, the roles performed, the projects worked on, and the challenges faced.
If you are hiring for roles requiring industry-specific knowledge, leadership skills, or result-driven roles, then this is the way to go. Here you would want to assess their track record and the practical application of their skills in real-world scenarios.
You would want to know their ability to handle complex tasks, their working style in dynamic environments, and their ability to deliver results.
This may potentially overlook candidates who are early in their careers but may have exceptional potential or transferable skills from different industries. But as long as you are aware of this limitation, you can make sure you are covering for it.
I always recommend maintaining a balance between qualifications and experience by considering both factors when assessing candidates accordingly. It just helps identify people who not only have the necessary skills, knowledge, and experience but also have potential, adaptability, and cultural fit.
Build special-purpose teams
When I worked with LG Electronics, we regularly used the concept of Tear Down Reengineering (TDR) teams. These teams functioned much like composite units in the army.
The beauty of special-purpose teams is that they make experimentation feasible. Small, focused project teams with cross-functional members, autonomy, latitude, and access to resources can do wonders.
Having the ability to change directions quickly and reorganise in times of disruption is something you can bet on with this structure. For most startups, adaptability is a crucial trait. Building special-purpose teams significantly increases this trait due to the resizable and modular team structure.
The point is…
I have often heard many people say that having a team is an important factor in startup success. However, the reality is the team doesn’t come first. There are quite a few things that take priority to prove your product or idea, and eventually having a team becomes a necessity. That’s when having a team becomes important. When that happens, there are several ways to approach that aspect. Most of them I have covered in this article.
But until that time comes, focus on building assets that are more important than this.
PS. if you’d like to grab a short checklist of those 15 assets, it’s available here for download.