Scaling up successfully is critical for a startup and so we thought it would be a great time to get some advice from people who’ve been there and got the T-shirt. So for this new mini-series I’ve sat down with Dan Medlock, Aarish Shah, Will Brown and Simon Cole – all of whom have great first-hand finance experience of scaling up a tech business. This week we look at “When and how do you hire to scale up?”
Dan Medlock, Finance Director at Streetbees‘
When’ is a really difficult question. At a large corporate you are ideally planning your requirements very accurately and hiring early. At a startup what tends to happen is something becomes enough of a problem that you realise you need to hire for it. For example, I was the only employee in finance for Streetbees for a while and you just have to knuckle down and handle everything until it then reaches the point where you realise you need to bring someone in. Resource constraints mean you can’t hire early. In terms of ‘How’, I tend to over-index for mindset vs. skills. If someone is coming in with 70/80% of the skills and experience that you think you need but they have 120% of the drive and willingness to learn and get stuck in, that’s a great candidate as you know they’ll grow to be 150% of the skills and experience needed in time.
Aarish Shah, Managing Director at EmergeOne
Finance in a startup is very interesting. Almost all ventures that I come across need some sort of finance skill-set in different quantities. What I tend to find is that you don’t really need anyone too strategic, full time until you’re at Series A or B. You’ll then have quite a significant chunk of funding, your business model is growing revenue and you now need to start thinking about how to go from here to super scale. In terms of general hiring, the way I look at it is in a startup you have a small collection of people who are doing lots of different roles. You start hiring full time specialists in those roles when the time it’s taking you to fulfil the role that you may not be the expert in is greater than the value you’re adding. There is no one size fits all to hiring, you’ve got to find the right people at the right time for your business. On the flip side to this, the other question is when to fire. From my perspective, you need to ensure that you hire slow and fire quick. When you have someone in the business and you start seeing toxicity and a lack of fit to the culture or vision of the business, you need to make those changes quickly. That’s actually where I see many startups fail, they hang on to the wrong people for too long.
Will Brown, CFO at Cloud.IQ
If we’re staying on the startup theme, when to hire is usually when the company can afford it and when you or someone else in the existing team is spending so much time doing a role which they’re not particularly well suited to and it’s impacting the business. This a great opportunity to get someone in that knows more than you do and will do it better and of course free you up to focus in other areas. When you’re balancing budgets and growth etc., it’s important to understand which hires will really help you turn the dial for the business and which areas are ‘good enough’ for the time being and can be improved later on without too much impact. How to hire I don’t feel qualified to answer but I’ll share some thoughts; getting the process right is hugely important to make sure you have the right people who are up for the challenge and have shared values. It’s not just about getting it right for the Company, it’s also important to get it right for the individual’s sake. When looking for a type of person, I once heard someone say, imagine you are in a half-built plane being pushed off a cliff and the passengers are your employees. You will have two types of passenger. Those who will sit and wait for you to build the plane, hopefully before it hits the ground, and those that will proactively help you build the plane. How you hire will determine what type of people you will end up with.
Simon Cole, Partner at Molewood Consulting
I learnt this from a previous business I worked in where I thought the owners’ ethos on when you recruit was very sound – If you show the business is there, I’ll get you the staff – this was the mantra. A lot of companies in the startup space think that when they get nail their funding, they need a raft of specialist roles and big guns immediately – even if the work isn’t necessarily there yet, basically they just recruit as they think it’s what they should probably do. If you’re clever and get your staff stretched, then you start to recruit when it’s clear that you need the expertise, as there is more business coming in and the headcount and granularity of experience becomes warranted.
Topic #3 coming this time next week!