A very common fallacy that comes with a start-up getting funding particularly at the seed stage is to ramp up the hiring quickly and scale the company quickly. The reason why the fallacy came about is because the investor expects that you are scaling the company with the business model that is expected to work. In honest truth, all startups at the seed stage have not figured out the business model.
The typical mentality is to “hire fast, fire fast”. To be honest, learning from the past lessons, I prefer to hire slow & fire fast. Some people says that you edit or pivot the product to help the business to grow. Another essential element is to edit the team. If you want to avoid the hassles of friendship being messed up or hiring the wrong person, you need to get rid of the pre-conceived notion that you should hire fast to scale. The key is to hire slow and really slowly.
Please remember this rule with the following advice:
1. Don’t hire fast because you need to scale fast, because if you hire the wrong person, you will not scale and send yourself crashing. You should hire slowly and take your time to decide why you should hire the person.
2. Don’t hire fast because the person agrees with you and seemed to tick correctly on your checklist. It’s likely that you miss out the parts where this person can totally not align with you.
3. Don’t hire fast because the person seemed to have a background that you might think that will work for your startup even if he’s from a top notched company. In most cases, the person might have chalked up the CV to provide the mirage to make him or her to look correct on your radar screen.
4. Don’t hire fast because you are under the pressure to scale up the company. The pressure to scale up the company will lead you to increase the burn rate so quickly that you might collapse and die without realising it.
5. Don’t hire fast because you feel that your competitors are gaining on you.
6. Don’t hire fast because everyone wants this guy and you need to pay an arm and a leg for it. You should only hire this person because his or her skill set match what you need to build or improve the function or system which you have built. You should give a fair compensation and not be dictated by the terms which you are being forced to accept.
My advice is to do it totally the opposite way: hire slowly and really slowly. If you have received seed stage funding, don’t start spending money for the wrong reasons.
That comes to my point for the future startup I want to build. Should I get venture money, I don’t intend to move quickly, but I want to figure out the system from sales to business development. If only the founding team members can do sales with the system and gain 10x revenues by ourselves, then we hire a sales person. Till date, I have not seen any sales or business person who can really deliver in Southeast Asia market.
For every person you want to hire for any function, do a 10x first on that particular function before you delegate it to the next person because you already have a system that works.
You only hire fast if you have an outstanding working relationship with this person in previous stints such that you knows not just his or her strengths but weaknesses as well. Otherwise, for everyone else, do it slowly, fairly and deliberately.