16 Hiring Mistakes Leaders in Startups, that Sink Make – Part 1

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The draft contains few hiring errors we feel startups should avoid while choosing their nascent team. While these tips do apply to almost any company in relevant contexts, startup or not, committing the recruiting mistakes mentioned can especially endanger startup survival and success.

Transcript of 16 Hiring Mistakes Leaders in Startups, that Sink Make – Part 1

  • http://www.ihiringonline.com abhimanyu@talentbridge.co.in 16 Hiring Mistakes Leaders in Startups, that Sink Make Part 1 Post by Abhimanyu Jha 03 June 2014 Startup founders and early leaders need to hire efficiently to progress to the next level. If they do that remarkably well, they have won half the battle; a great team can turn even a bad start/strategy/product around and take the baby organization towards a successful adulthood. If they do it badly, they have lost eighty percent of the battle; as any seed stage/angel investor worth his/her salt will tell you, startup = its team. Ideas come dime a dozen, its the team that matters. Sample what Mark Suster, the former entrepreneur and now prominent angel investor has to say without mincing any words: Individuals dont build great companies, teams do. Startup founders and leaders hire primarily for three reasons. One, recruiting top performers to work under them in domains the founders have expertise in, e.g. technologist entrepreneurs wants the best technologists to work under them for product development. Two, hiring leaders to deliver in areas the founders dont possess expertise in e.g. a marketing founder may hire a technologist as a CTO or a technologist founder may hire a CFO to handle finance. And three, do clever talent acquisition to delegate less valuable work that the entrepreneurs themselves were doing to begin with for example recruiting a person to manage the nitty-gritties of human resources or hiring an executive assistant to do everyday communication so they can focus on more value-adding business.
  • http://www.ihiringonline.com abhimanyu@talentbridge.co.in Despite the availability of plethora of advice telling them to how to hire, startups often face challenges in recruiting due to their limited available resources; and its a far bigger challenge as compared to HR in established companies. At least in the early days of a startup, resources could be stretched, HR/hiring managers could be too costly to employ, and the founders and the early team-members may have to search in the talent pool for their desired choices themselves. Following are the few hiring errors we feel startups should avoid while choosing their nascent team. While these tips do apply to almost any company in relevant contexts, startup or not, committing the recruiting mistakes mentioned below can especially endanger startup survival and success. Hiring Mistake One: Seeking only a specialist and NOT a problem solver Startup organizations require frequent problem solving. Many challenges that startups face dont have precedents these problems have never been solved before. Unlike established companies that often face age-old problems and therefore can benefit a lot from specialists who have deep historical knowledge of the domain and can simply follow established solutions or copy strategies/tactics developed by competitors (and therefore need not be problem solvers), startups inevitably require people that in addition to domain knowledge have a problem-solving attitude and competency; only having deep domain knowledge is not sufficient for a startup scenario. For example, according to an article in Harvard Business Review, A problem solving attitude led to LinkedIn early employee Jonathan Goldman helping LinkedIn achieve in 2005 a 30% higher CTR than usual and increase its page views by millions. LinkedIn was facing the problem that users werent seeking out connections with the people who were already on the site at the rate LinkedIn had predicted. After doing plenty of data analysis, Goldman decided that LinkedIn users would feel helped if LinkedIn figured out their networks for them capitalizing on the data they had already provided LinkedIn. Though some in the company were skeptical, LinkedIns then CEO (and co-founder) Reid Hoffman recognized the value in Goldmans prognosis and backed him. He gave Goldman a way to circumvent the traditional product release cycle by publishing small modules in the form of ads on the sites most popular pages. Goldman started testing his ideas and the result was soon there for all to see: 30% higher CTR when compared to any other method and millions of more page views! Today LinkedIn is the most successful professional networking company in the world with no other competitor within miles. And not only this, Goldmans success in solving the problem helped create a job description that never existed before: a data scientist!1 Its clear: startups need Jonathan Goldman kind of problem solvers cum specialists backed by Reid Hoffman like leaders because presence or absence of such employees and leaders decide whether the startup will be a success or a failure! Do you have any doubt now that as a startup leader, you should definitely seek problem solving skills in a potential employee?
  • http://www.ihiringonline.com abhimanyu@talentbridge.co.in Hiring Error Two: Hiring someone without evaluating their capacity to learn and change, especially with regard to new technologies Alvin Toffler, the former editor of the Fortune magazine said that the illiterates of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. This is nowhere else truer than in startups. Only those who can learn, unlearn, and relearn at a rapid pace can cope up with the mindboggling rate of change 21st century startups face. Unless startups can find enough number of such people, they face great danger. This is because startups, unlike established companies, dont have the capacity to absorb the shocks that the forces of change generate; the smaller the organization, the lesser the capacity. Establish companies can still get by, even do well, despite changing only when forced by the crises caused by the changing circumstances. In contrast, startups must anticipate and embrace change for if they wait till a critical situation is breathing hot on their necks, they will likely die. Stephanie Chai of travel-site Luxe Nomad, the odd woman out in the world of male dominated tech startups, was able to accomplish the feat of raising funds from VCs though they are often reluctant to invest in solo founders. Add to that her background she was no tech whizkid but a former Eurasian model since she was eighteen - and its a double whammy. This is what Stephanie, one of the most glamorous tech founders around, had to say about her being a former model, an entrepreneur and changing with the times:
  • http://www.ihiringonline.com abhimanyu@talentbridge.co.in Did modeling help? Definitely. Living in different countries while not knowing anyone teaches you to be adaptable. And that quality is crucial in a startup environment; you better learn to move on with the times and fast3 . We are sure this precisely is the attitude that helped Stephanie accomplish what she did. And as a startup this is the attitude you need in your employees too: be adaptable, learn and change with the times, and fast, no matter where they come from. Reid Hoffman, the founder of LinkedIn, takes the advice further with these following words: The fastest way to change yourself is to hang out with people who are already the way you want them to be. Building on Hoffman, the best way for a startup to become a change embracing organization is to learn how to hire people who are already change embracing; in other words, who are already learning, unlearning and relearning. Hiring Mistake Three: Taking in someone who may NOT be comfortable with ambiguity Startups should pick talent that can work under supervised and can create system by themselves. The employees should not be dependent on the entrepreneur always for guidance or processes. As Lee Hong Minh, founder of another tech startup Vietnamese internet company VNG said: You dont really have a clear answer only directions4 . People who cant handle ambiguity and look for clear-cut answers before they can proceed can feel confused and paralyzed in a fast-changing startup environment. So in your talent acquisition process, include assessments to sieve out such people unless you want your startup to become paralyzed too. Hiring Error Four Recruiting people who do NOT lead by example Someone I know said that Mahatma Gandhi would have been a great entrepreneur; I replied that he already was. The Indian freedom movement was perhaps the most successful startup of the twentieth century! The man who roused millions to fight against the British was a great marketer too: successfully pushing out from the Indian market British mills made cloth and promoting Indian handspun khadi instead.
  • http://www.ihiringonline.com abhimanyu@talentbridge.co.in One of the key reasons that Gandhi succeeded, as he himself acknowledged, lies in this saying of his: Be the change you want to see. For startup leaders, not only the founders but others in leading roles as well, this advice is crucial if the startup has to succeed. This is because like in Gandhis freedom movement, being a part of startup often requires sacrifices not needed in established companies. Startups are risky to join, dont provide the recognition that established brands do, and the work is often quite demanding. Of course the risk may pay out later, but till it does, employees may have to work in a crucible in the hope that cornucopia beckons just around the next bend. Employees will be ready to do that only if they see their leaders too making the sacrifices expected of them. If you expect them to work long hours, work long hours; if you expect them to work on weekends, work weekends; if you expect them to work for lower pay for the time-being, work for a lower pay for the time-being. O