One of the things that is totally underestimated by startups is hiring. Hiring is a total pain in the ass. However, it’s a skill that will make or break the business. Interestingly, in Chicago there are a lot of startups that concentrate on one or more pain points of the hiring process. A lot of big time recruiting firms are headquartered in Chicago so it makes sense. A very good friend of mine, Professor Michael Gibbs, teaches a course at Chicago Booth about HR. He and his co-author Professor Edward Lazear came up with the concept of The Risky Hire which I wrote about here.
It’s often said that seed investors bet on teams. They do. But, venture investors bet on teams too. This is why your first ten hires are very critical to the success of the company.
Look at a company that was wildly successful like Apple or Facebook. Sure, we all know the headliners. Steve Jobs and Mark Zuckerberg. But, we don’t know who the hell they are without the people they put around them. Most of those people went on to do some pretty cool stuff after they left their company. They were talented-they didn’t luck into their position. Sure, certain things might have fallen their way but they earned it.
This week, Donald Trump became the presumptive nominee of the Republican Party. Pretty incredible since no one gave him a shot at it back in August. I didn’t think he would stand the test of time myself. All of a sudden the pundits are turning from, “Will he win?” to “Who’s going to be his running mate?”
As a business executive, Trump clearly understands hiring and firing. He made “You’re fired” a household phrase. One of the things it’s important to do in a startup is fire quickly. If someone isn’t working out, they can’t hang around. There is just too much to do. If a team has constant turnover and it seems no one is sticking, then it’s a cause for concern. As businesses grow, some employees can grow with the company and learn the skillsets they need for a larger company. Others can’t. Others don’t want to. I know people that like to work for companies from seed to 100 employees-then they hate it. Others hate startups, but loving working for larger companies. There is no right or wrong when it comes to personal preferences. But, there is right or wrong when it comes to communication, feedback, and expectations for roles. Plenty of people have written a lot on workforce management.
Great executives know how to hire A+ teams. It will be interesting to see who Trump gets on his team. The President’s cabinet has 15 Secretaries that run the bureaucracy, 1 VP, a chief of staff, and a UN Ambassador. He sold himself to the Republican electorate. Now he has to sell himself to executives to get them to work for him. My guess is most of the pundits will be wrong on their prognostications about who will be on the team.