Why you shouldn’t (always) hire that Stanford Engineer

So you’ve raised some money, and now it’s time to make your first hire or two.  This is where a lot of entrepreneurs make their biggest mistakes.  Your first couple of hires solidify your company culture, which sets the tone of the rest of your company.  Most entrepreneurs tend to look at candidates purely based on skill.  But looking at a person based on just one axis is a huge fallacy.

People aren’t drones — their skills are affected by all kinds of things: happiness, friendships, and camaraderie at work; independence and autonomy; the job itself; growth potential; etc.  The people with the best skills for the job can be your worst performers if the environment isn’t a good fit for them.

When I started LaunchBit, I made the mistake in the beginning of dismissing things like setting your company’s mission statement and values, from which company culture and hiring culture develops.  It was only a few years later, after my co-founder Jennifer coaxed me into taking a meeting with a potential startup coach, that I started looking at culture.  It was probably one of the best meetings I’ve had in my life, but it was much too late for our company to be only starting to look at that.

Setting your company culture consciously from day 1 is probably the most important thing you can do for your business and hiring.  What do you value?  What sort of employees reflect those values?  If teamwork is one of your values, it doesn’t make sense to hire someone who is very strong technically but isn’t a team player.

This isn’t a post about setting your mission statement or your team values,  but before you make your first hires, you should come up with a rough outline of that mission statement and those values.  Then, take a first crack at writing down what your employee persona should look like.  We all do this with our customers all the time — we write down what a typical customer looks like, but we don’t do this for our own companies.  Aren’t your employees just as important as your customers?  At some companies, employees are considered even more important!

Here’s a quick persona of what I’m looking for in all of my team members at 500 Startups:

  • Open minded
  • Brings diverse backgrounds, perspectives, and ideas to the team
  • Good sense of humor; doesn’t take himself/herself too seriously
  • Efficient; able to build processes to scale activities
  • Competent skills
  • Decent organizational skills
  • Eager and quick to experiment and try new ideas to solve problems
  • Able to prioritize
  • Not afraid to articulate ideas

Basically a team that looks like this:

image credit: Peppermint Soda

Once you have a list, it’s important to think about the ramifications of bringing onboard a new employee to your team and impact on that team as well as your ability to hire going forward.  My friend and former colleague Andrea Barrica wrote a great piece on diversity debt – namely, if you have too many of the same kind of person at your company, it will hinder your ability to hire other types of people going forward.  In this post, she focuses more on race, gender, and sexual orientation, but this also applies loosely to other areas as well.  For example,  if you have too many extroverts, they may drown out any new introvert hires from being heard.  It’s important to keep this in mind.

Beyond this, it’s also important to visualize how your employees will work.  Will they be remote?  Do you expect them to stay really late?  Will they work all the time?  Do you expect them to socialize with each other?  Do you expect them to be like family?  Or just colleagues you see in the office?  Will you offer awesome compensation?  Or do you see your group as a learning environment?

All of this is an exercise that’s worthwhile for every hiring manager to do — not just startup founders — because this really sets the tone for how your group or company will congeal and work together.  This is something that took a long time for me to figure out and that I wish I’d paid attention to several years ago.

We’ll be talking more about this at 500′s Unity and Inclusion Summit in LA in a couple of weeks.

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