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The Long Arc of Startup Teams: How Founders’ Approach to Talent Evolves

Lee Hower
January 5, 2016 · 5  min.

Basketball or football?  I realize sports analogies for startups can feel trite, but as you think about the different phases of team-building in a startup, this one is actually pretty spot on. Your recruiting strategy should be adapted to a few distinct phases just as the approaches to building different kinds of sports teams varies. Below, I take a look at each.

Genesis

At the beginning, a startup team is typically just a couple of co-founders. Titles, responsibilities, and org structure are fluid at best and realistically non-existent in lots of cases … which is fine. What we suggest at this juncture is that founders get acclimated to the tactics of scaling beyond the founding team. Stuff like different interviewing approaches, when to start using an ATS, etc. Even experienced startup execs who have hired and built teams sometimes find there are nuances to learn between building a team within a larger company versus hiring the first dozen folks in a startup. (This is a major reason NextView offers its portfolio startups free sessions with talent specialists — former in-house recruiters with experience at high-growth tech companies who are able to improve a founding team’s hiring process and efficacy early on.)

What to Address During Genesis Team Building:

  • How do we divide and conquer responsibilities as co-founders?
  • What are our respective approaches to interviewing? To people and culture management in general?
  • What are our differing goals and visions for our future team?
  • What did we like/not like about past companies’ approach to hiring and team development?
  • What is our mission, and how do we articulate that consistently and succinctly? (This sounds tangential but is perhaps THE deciding factor for many early-stage employees or execs when joining you — perhaps alongside their insight into your talents as entrepreneurs.)

 

Early Growth (Founding Team to ~20)

The early growth phase is something akin to building a basketball team: The total team size remains fairly small. Additionally, the focus is typically on recruiting the best all-around startup “athletes,” rather than recruiting for highly specialized positions. Pro basketball is gravitating towards multi-dimensional athletes today because it allows for more flexibility. Whereas before, your tallest player would hang near the basket, we’re now seeing the proliferation of bigger players shooting threes and guarding smaller players on defense. Your early growth phase should similarly emphasize flexibility and multi-dimensional players.

This extends beyond functional roles to include the culture of the company too. At this point in a startup’s evolution, good founders often have a clear direction of the startup culture they aspire to build and have laid the groundwork for this both by espousing company vision and values and in finding the right cultural fits as their first few hires. But even still, at this stage one usually can’t just walk into an office and immediately put their finger on the culture of a company. It’s a moving target.

Additionally, when startups of 10-20 people draw up an org chart, it’s typically retrospective rather than prospective. You describe what key personnel do in terms of function or seniority at this moment in time, but it’s more specific to each of those people in the company rather than defining an overall “organizational” structure that could swap out individuals without drastic changes.

Again, this is totally appropriate at this scale. What smart founders often start doing at this point, though, is taking note of a few things…

What to Address During Early Growth Team Building:

  • Where is the company as a whole strong?
  • Where is the company as a whole weak?
  • Which individuals have the capability to scale further? How does that map to rounding out an executive team in the near future? A middle manager layer after that? (And are these even in the bigger picture of your org as the founder?)
  • How does your current team and each individual’s capability map to the overall needs of the company in the next 2-3 years?

 

Scaling Mode (~20 to 100+)

So you’ve got product-market fit, you’ve probably raised a Series A or B at this point, and you’re ready to scale. This phase I describe more like assembling an NFL team. It’s not just that you have a 53-person roster (though that’s likely), it’s that a startup CEO also has to start thinking like an NFL general manager in many ways. This informs how you now approach team growth…

What to Address During Scaling Mode Team Building:

  • Positional recruiting: At this stage, you typically have to think about talent in a more specialized way. Each hire will have narrower responsibilities in a 50-person company than in a 5-person company of course, but you will also start needing to fill certain types of roles that simply don’t exist when a company first launches. As the founder/CEO, you now have both the necessity and the luxury (in terms of resources) to start building depth in each functional area. Just as an NFL team carries 7-9 offensive lineman to fill only 5 starting slots, startups that are reaching the 50+ team size start building depth in product, marketing, and other areas that might have just been 1-2 FTEs earlier on.
  • Multi-year planning: For NFL GMs, this manifests itself as the long-term planning they do around the annual draft or negotiating big long-term contracts for their franchise players. For startup CEOs, this comes somewhat naturally, as greater emphasis is put on annual planning/budgeting. But it also manifests itself in ways unique to building high-growth tech companies. For instance, key early hires may be approaching the latter years of vesting on initial option grants or may have stepped up into much greater responsibilities, so additional grants may be appropriate — or else you should start planning for that contributor or executive’s exit. Additionally, you need to consider that some contributors prefer the challenges of early-stage startups to mid- or later-stage startups, while other types of employees might now be needed at this greater scale (e.g. people managers whose motivations, tangible output, and compensation are all different than those of individual contributors). And somewhere along the way, startups begin college recruiting in earnest as well, which requires anticipating your needs 6-12 months in the future, not just thinking about immediate hires.
  • Org structure: In addition to thinking about talent differently as you build to 50-100 person scale, you also typically shift to thinking about org structure more prospectively. Everybody team member still knows everyone else at this juncture, and you don’t have to move the all-hands meeting out to the parking lot just yet. But org charts are no longer simply a way to draw boxes on a page. At this stage, they become a tool (along with lots of other formal and informal things) to design and deploy the human capital of the entire company in a more deliberate way. (Lest you sleep on the importance of org charts — which, by the way, happen if you plan for them or not, I highly suggest this post from the CEO of Wistia, Chris Savage: Ditching Flat: How Structure Helped Us Move Faster.)

One more important note on org structure: There’s no absolute truth here on hierarchical versus matrix structures, and no two startups will have an identical org chart. But if you don’t take a deliberate approach to organizing 50+ human beings, then at best, your company will be wasteful in harnessing the intellectual and physical capacity of all of these folks, and at worst, a company with the preconditions for apparent success (good product, good market opportunity, etc.) won’t capitalize and will spiral out of control as talent needs go unidentified or unmet, culture erodes, and gaps or failures in leadership metastasize.

startup talent

Infinity and Beyond: A whole other set of opportunities and challenges around talent emerge as companies scale into the hundreds or thousands of employees, but these are really beyond the scope of this post.

Rewinding all the way back to the beginning: Even when your startup is just a couple founders working in that metaphorical garage, it’s worth thinking about how you should approach talent and organizational planning in the coming phases of a company’s growth. Because in your mind, it’s no question: Your team will grow. So the only real question is, when that time comes, will you be ready?

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Author
Lee Hower
Partner

Lee is a co-founder and Partner at NextView Ventures. He has spent his entire career as an entrepreneur and investor in early-stage software and internet startups.