When Episode 1 invests in a startup, we’re investing in people. People who have a vision and who are seriously driven and passionate to make their vision come to life.
At the stage that we invest, sometimes there is a product, sometimes there are customers, but there is always a phenomenal idea espoused by solving a particular problem and there is always a team.
Investment enables a startup to grow and adding new people to that fledgling founding team is a huge but essential step (albeit not the only one). Many of the founders that come to us are from technical backgrounds, so while they relish tech and engineering challenges, dealing with a team and being a ‘boss’ is usually outside their comfort zone.
Many of the founders we invest in have never managed people at all – meaning that understanding exactly how hard it can be to do so, is not yet apparent.
Get it right, and the chances of success that your business has increases exponentially. Assembling and leading a winning team are two of the biggest factors for success on the journey from seed to Series A.
I’ve identified three key challenges that all startups face. Solving them should lay the foundations for a winning people strategy.
1) Attracting the best talent – right people, right time, right role
Unless you have a big brand, attracting and recruiting the best talent is tricky, very tricky (and that is still putting it lightly). And why would you want the best talent rather than just people who can do the work?
Well, success in an early stage startup, isn’t just about hitting milestones. It is also about how you hit them (oh and of course, they have to be the right milestones to aim for in the first place).
What you do at the beginning of your business’s journey will fundamentally set you up for down the line.
Having secured venture investment, what follows is such a crucial time for your business. The first hires you make have a disproportionate ability to impact the success of the business – ideally this is a positive impact, but it can very well be negative too. And when there are only a few of you this can be disastrous – on your team, your product, and your clients.
The problem is, it’s tough to attract high calibre talent as a new kid on the block, with no brand, no reputation and (seemingly) a whole lot of risk. In addition, hiring for fit is CRITICAL and you may not really know what fit looks like yet let alone how to codify it, to hire for it, without being discriminatory!
Not only that (crikey!) it’s likely that your first target hires will be engineers who are in massive demand and short supply – you’ll need to out-do the competition!
Ultimately, people want to work with great people and solve interesting and challenging problems where they can truly have impact. When money isn’t the prime motivator (as in you are earning enough to pay your bills) the best talent wants autonomy, the ability to have mastery and feel a sense of purpose (thanks Daniel Pink).
As such, it is important for founders to turn the vision that drives them into a culture that can attract and inspire others too.
2) Super productive & high performing teams.
Getting the best people in the door is only part of the challenge. Once you have them, onboarding (that is integrating) them into the business to enable them to have meaningful impact as soon as possible and ultimately return on the investment is critical.
Onboarding is often seen as a necessary chore, a checklist of basic introductions, company policies and setting up all the workplace tech. That approach misses a huge opportunity.Done well, onboarding gets a new team member up to speed quickly, integrates them into the business and sets them (and as a direct result, you) up for success by setting out the stall that engenders high performance.
This is better for all involved – they feel like they’re beginning to make a valued contribution quickly and you see a more productive individual that is performing to the high standards that you and they expect. Having a strong and engaging onboarding process also dramatically improves the chances of retaining talent you worked so hard to get in the first place.
I dive deeper into onboarding in this post.
High performing teams, aren’t just about high performing individuals. I often use rowing teams as an analogy to explain just this. Imagine a rowing team of 8 people plus the Cox, all 8 people would need to be individually extremely powerful and superior performers.
The Cox (or the manager in the analogy) is responsible for steering the boat and coordinating the power and rhythm of the rowers (team members) in order to deliver a superior team performance. Regardless of the power of each individual, if the manager doesn’t coordinate the delivery ‘the boat will sink’.
It is brilliant to have a group of highly talented individuals but if they can’t coordinate their ‘delivery’; power, timing, strengths, stroke length… you know where I am going with this.
This leads perfectly to the third main challenge:
3) Going from a ‘do-er’ to a leader
This represents a significant personal shift for entrepreneurs who, until this point, have probably enjoyed getting their hands dirty coding and developing their core product.
As your business scales you will need to hire people to do the hands-on building and it will become your job not just to manage them as individuals but to lead the business as a whole.
This means managing people and teams when you might not be sure what good management looks like yourself. This can be “triply” tough, when as a founder not only do you actually have important things to do, but you also have to manage people that you hire so that they can be the best that they can be AND you are expected to be a leader of the business – exciting, enticing and visionary.
For more detail on Leaders v Manager – take a quick read here.
I’m a big fan of the ‘fail fast’ philosophy, of learning from mistakes and moving on. However… when it comes to putting together a team, it can mean failing on the backs of other people.
You might learn something, but you’re also having an impact on someone else’s life. It’s not the same as writing a piece of code that doesn’t quite work – you can fix that.
As such, it’s important to learn the right skills or, wherever possible, to learn from someone else who has made those mistakes so you can avoid them.
People often use the term ‘soft skills’ here but getting people ‘stuff’ right is actually hard, very hard. This is not least because each time you use what you have learned (your newly formed skills) the outcome will vary, as every individual is different.
The way people receive feedback (and give feedback for that matter), what motivates people, what risk appetite people have, and so on, varies hugely from person to person. Input doesn’t equal output!
People are the greatest asset for pretty much any company and this is especially true of a startup. Everyone is directly involved in building the business.
Salaries are where most of the money goes and as such, each member of the team needs to make a direct contribution to success. The time spent early doors by founders in nailing their people strategy, principles & infrastructure, and by creating their culture (not having it be created around them) will pay dividends.
I help all our new portfolio companies navigate the challenges of attracting people when you don’t have a brand, ensuring that their ‘newbies’ are highly productive and highly engaged, and support founder evolution from that of ‘do-ers’ to leaders.
And I love every second of it!!