One of the many challenges entrepreneurs experience when starting a new business is building their first team. It can seem overwhelming at first, but upon understanding that a C-Suite lineup of executive-level managers is not necessary at the validation stage, the stress dissipates. At the beginning of a company’s journey, workers are needed more than leaders, so why pay extra money for a CTO or CFO when you don’t need them?
It helps to think of your business as a house: You need to have a strong foundation or else the building will crumble. To build those foundations, you need people who are ready to put boots on the ground: people who understand the vision of your business and are willing to get their hands dirty. Only when you have the solid structure of the house down can you begin to think of the long-term leadership of the business. Executive leadership will come, but first focus on the doers.
As your company grows, the necessary skills will change
During the validation stage of a startup, an entrepreneur typically refines the original idea of the business, prototypes the product or service, and starts to find their first customers. Through this very first stage, you need people who simply work hard to finish their respective tasks in a timely manner.
Employees working at this stage need a skill set that mixes creativity, resilience and productivity. But the required skills will organically shift once you arrive at the second validation stage in which you will need to focus on processes like finding new customers and managing the company’s operations. At this time, you will need to expand your initial team to one that has more experience fulfilling this goal. Enter the C-Suite.
Because required skills change as the company grows, employing a C-Suite from the beginning can be a misguided decision. Imagine you choose a CTO from your founding team during this first stage of your startup, but this person doesn’t have the ability to code. In the long run, when the company starts to grow, it is essential for the CTO to know how to code, and therefore you will have to change this position. This shift on your staff can hurt the work you have accomplished so far, resulting in a waste of time when you will have to devote resources into training a different person on your business values. Not to mention the effect it will have on the person being demoted.
In the same way, choosing a CEO at first can seem natural, but it’s best not to force someone into the role if they don’t fit the long-term outlook of the company. The responsibilities of the CEO change drastically from the initial stage to later stages in a company’s growth. The result is the CEO that seemed so natural will need to shift into a VP role because their skill set is much more operational than strategic.
You are wasting cash
Simply put, when you rush into hiring top-level employees, you are wasting precious money. During the validation stage of your startup, you need people who are committed to the hustle that comes with it. You need workers that can respond to multiple tasks while simultaneously building the foundations of the house – you don’t need leaders quite yet.
To save cash, companies need to start with a small team of workers and only later move into higher level hires once they overcome the validation stage.
Take the example of Bulb, the fastest growing startup in the U.K. When Geraldine de Boisse was hired as product officer at Bulb, the company had a team of 20 people, but in only six months, the company grew to 200 employees. After establishing a solid foundation, C-Suite employees from multiple departments grew their team with careful training and long-term sustainability in mind.
Hiring with accuracy
Building your first team is like building a football team that will play in the national finals: You want every player to have the required talent to accomplish the common goal of winning. This is exactly what happens with your first team, where each worker needs to have a specific skill set that, in combination with the other workers’ talent, will play a role in your company’s success.
In order to build your perfect first squad, think first in terms of the skill set that you need rather than the title. If you focus on the skills required for a particular job, you can make the person fit into that position, rather than fitting a position to a skill set.
When you choose someone to fit your team based on a title, the person will most likely join your team with previous leadership experience while not necessarily fitting into the current requirements your company needs.
Starting a company can feel like jumping into the void. It certainly is risky. You have to think about product business validation, consumer validation, how to deal with demand, scaling and more. Building the perfect team is a challenge, but you want to be able to rely fully on your teammates, so choosing correctly is paramount.
Growing your team carefully––and staying away from C-Suite positions early on––is one of the keys to making your company sustainable over time.