Recently I came across this interesting article highlighting tips from 8 Silicone Valley big shots at Y Combinator’s Startup School 2013. The advice has been turned into some artsy infographics you can have a look at here. From the advice given I was immediately drawn to the bits that related to hiring, nurturing and understanding founders and employees particularly a quote from Ron Conway, “hire fast, fire fast”. Ron is a Silicone Valley Angel investor.
His advice stuck in my head.
Before I go ahead, a disclaimer, I am no expert. The following lessons and advice are derived from some of my own personal experiences, assumptions and musings; this is not law and does not necessarily reflect my position on those issues or any of my current life struggles. This advice mainly relates to situations where you choose your co-founders. If you start a startup with other people it’s different. As I learn more or read your comments, my position on these matters may change.
Now that that’s out of the way here we go.
It’s all about you
This seems selfish at first, because it is. After you have found a startup you will quickly realize that the success of that startup is mostly on your shoulders. You are ultimately responsible for the success of that vision, and you will have to endure a lot of the pressures, sacrifice and risk of failure that translate to many sleepless nights and bad health. In that sense, you should realize that it’s all about you and the vision. When you scout for co-founders and talent, the point is to make your journey towards the vision easier, clearer and more productive. You are looking for people who compliment your weaknesses, do you hear that? ’Your’ weaknesses not anyone else’s. Earlier on I was naïve to believe that it is too selfish to make your vision all about you, I quickly learnt that one can risk wasting people’s time by pretending not to care too much about themselves and their vision only to aggressively start trying to regain control and influence later.
Don’t be forced to change
When you hire a co-founder or new talent make sure that they accept your personality, culture, beliefs and traits as they are. Be up front and open about your weaknesses, peculiar habits and maniacal tendencies. It is very important that the people you bring onto your bandwagon can handle the ride when it gets bumpy and patience is stretched. Your team members should quickly realize that your personality will generally stay as they found it. You don’t have too much time to spend trying to justify your each and every action, you don’t need to spend countless hours arguing about leadership styles and lifestyle choices with your co-founders either. Once you appear uncomfortable with your own weaknesses people will prey on them and blame your personality for a lot of the things that they may want to get away with. All this is not to say that you shouldn’t strive to be a better more flexible person, please do, but at your own pace and for reasons that you understand. Try to avoid an experience with your new co-founders that is characterized by a relentless attempt to constantly alter your personality so that you appease everyone else. Instead, find people who can tolerate or even thrive under your style of leadership as it is, finding them is easier than trying to change your nature. Define a style and perfect it.
It’s ok to be incompatible
Some business relationships will go sour, it’s fairly normal. When you fall out with a co-founder or an employee it’s not always a bad reflection of any or all of the people involved, it doesn’t have to be. Often I’ve heard stories of boardroom fallouts narrated within a context of villains, heroes, victims and incompetence. I have found this to not always be the case. Frequently, fallouts are a result of incompatible personalities, divergent visions, wrong timing or the right people taking on the wrong roles. When any of the above happens, parting ways maybe unavoidable, in fact, it could be critical. Being the founder of your startup, when you reach this point it means only one thing; it’s time to fire someone. It’s not easy but the sooner it happens the more respect and friendship can be salvaged from the aftermath and the quicker you can be back on course. Consider firing someone a human resource pivot. Pivot smoothly and as frequently as necessary. Always remember to do it respectfully; every relationship you can save is worth it.
Talk is cheap
I’ve spent most of my time thinking and dreaming about a number of ideas, when I’m not thinking about these ideas, you’ll find me talking about them. As a founder you’ll eventually come across someone who will listen intently and respond very positively to your vision, they can perhaps even share their own secret intent to do something similar. This could be a very talented programmer or a skilled expert. You may spend the rest of the conversation agreeing on everything and before you know it, you are talking percentages.
Don’t! Never ever commit to giving anyone a stake in your company based on what they say or promise.
Exercise discipline
When you have found the right candidate to be your co-founder or employee try not to let them know immediately; keep your cards close to your chest so that you have room to change your mind after you consult with people about the person behind the talk. Always consult with other people about a person’s credentials whenever you can. If you rush and promise someone equity upfront then later realize that they are not the right partner for you, it will count as dishonesty or betrayal on your part. I’ve had to back track on my own promises before, it’s not fair to do that. Be on the look out for any personality traits, beliefs or behavior that you know will cause problems later, time and time again you’ll hear Silicon Valley types talk about how important maintaining an organisational culture is, I can imagine this is part of what they mean. Take time to learn about yourself so that you know what to look out for in people that will compliment you and reinforce the culture you want.
Do you want to build a team that is characterized by a youthful, instinctive, enthusiasm or one that is mature and professional, be clear in your mind and start building deliberately building a dream team that anyone you choose will want to be a part of. With time and experience it seems you will be able to gauge people quickly just by spending a few minutes with them, Richard Branson for example says he only needs a few seconds, I on the other hand need months sometimes.
Craft a way out
If you can pay someone for his or her service or if you can get him or her to volunteer, I’d say do that, then offer them equity later. Should things not work out, you want it to be very easy to part ways. Sign an NDA and a contract, no exceptions. In Zimbabwe for example, when someone works for you for 3 months without a contract they automatically become a permanent employee, they must be paid minimum wage and are entitled to receive a severance package should you wish to end their employment.
Explicitly promise equity to your co-founder(s) based on their measurable performance and on the condition that they will exist in your startup to add value and complement you and your vision, it’s about you and your vision which they can be a part of and help shape, let them know that. Layout a clause that clarifies how and why a co-founder can be fired so that when it happens you won’t face needless resistance, yes co-founders can be fired from an executive role, usually by a majority decision. Arrange a share-vesting schedule with a vesting cliff. Cliff vesting is essentially a probation period for a co-founder before they can start earning any equity. There is no reason you wouldn’t want to consider this; it allows you to see how well your co-founder compliments you and your vision before handing over any valuable equity to them. You can learn more here.
Family and friends are taboo
As a general rule I’d say don’t hire family or friends. Making serious decisions where family or a very close friend is involved may seriously undermine your judgment unless you are exceptionally disciplined and skilled enough to navigate any potential pitfalls. Loyalty and obligation can easily start to creep-in when fair but hard decisions need to be made. I can imagine that the worst position anyone can be as a founder is having a member of your team that you can’t replace no mater how bad their performance gets, even when you have to. If family or a friend are going to be involved maybe let it be in a very limited well defined capacity, unless of cause the relationship is solid, if solid means you can fire them at the drop of a hat. It’s important to have loyal co-founders that you are friends with, but I think it is better to let your friendship grow out of a compatible and productive business relationship, the opposite is much harder. So, have your “friends friends” on one side and your “business friends” on the other. These two kinds of friendship should have a clearly different set of boundaries that do not overlap if there is no need to.
Hire fast, fire fast.
“Hire fast, fire fast” as hush as Conway’s advice sounds at first, I think it is to some extent the most valuable piece of advice a founder will ever get. A lot of startups today are destroyed by politics and squabbles that distract the attention of the entire company as it spirals out of control towards its death. I doubt that you have a valid reason to imagine that your relationship with your co-founders is an exception, you will disagree and may part ways at some point, so make sure that when this happens you are ready and you are all clear on how it will happen. I’d love to hear what your own experiences and lessons have been like.
5 comments
Finally someone says it in Zimbabwe! A flexible labour market is the cornerstone of any quick economic recovery model. Not only do I agree with “Hire fast, fire fast”, I would go further and say it is not just for start-ups, but applies to established businesses too – for many reasons. You probably meant “harsh” not “hush” advice. BTW isn’t it harsher to keep an employee who is not performing or a great fit and just lie to them? Rather let them go and they will find somewhere they are better suited and can flourish?
Just to chime in before we open Pandora’s box… businesses also need to have more flexible engagement terms (delete the cliche 3-months notice from contracts someone!). Again Zim businesses need to start paying employees fairly (including severance packages). Normally the reason why labor issues drag on is employer wanting to ditch workers out in the cold and the workers feeling hard done and cheated after 5 or 10years of toiling! I have also seen many a company founders fighting tooth and nail to avoid being booted from their own creations. Noone wants to be done over period.
Noteworthy to also mention at the basis of a “hire fast, fire fast” labor model is a well-organized, well managed Performance Appraisal system (how many Zim companies have those?). Usually these tools don’t exist in Zim mainly because shrewd business owners want to cheat top performers out of bonuses and incentives however this ends up creating a warm, moist environment for bottom-feeders to breed.
Another reason to “hire fast, fire fast” – anyone who thinks they are great at interviewing people or can “spot” talent better think again.
Check out http://www.businessinsider.com/how-google-hires-people-2013-6
To quote from Google (certainly a successful company with many talented individuals, huge databases and heavily reliant on analytics), “Years ago, we did a study to determine whether anyone at Google is particularly good at hiring. We looked at tens of thousands of interviews, and everyone who had done the interviews and what they scored the candidate, and how that person ultimately performed in their job. We found zero relationship.’”
Further, “Academic environments are artificial environments. People who succeed there are sort of finely trained, they’re conditioned to succeed in that environment”
So “hire fast, fire fast” or “fail fast” or “recover quick” – whatever your choice of words for the model, the principle is good – and not just in staffing.
Great article Tafadzwa, I believe no one is indispensable in a start-up, except maybe the visionary. If its not working, don’t you dare waste any more time, just fire and move on.
What happened to managers who resign or cut their own pay when things are going badly under their leadership?