June
16, 2021
6 min read
Opinions expressed by Entrepreneur contributors are their own.
A startup is a company designed to grow fast. Being newly founded does not in itself make a company in its early stage. Nor do you need to work in technology, or accept venture financing, or have some kind of “exit” from the stock market. The only essential thing is growth. Everything we associate with startups stems from growth.
If you want to start one, it is important to understand that. You need to know that what you are looking for is exponential growth. At least 3x or 4x a year in your main indicators, and that, not necessarily, but most likely, is associated with having to grow your team, especially at the beginning, at a similar rate. The good news is that if you get healthy and financially viable growth, everything else tends to fall into place. Which means that you can use growth as a compass to make almost every decision you face.
Part of what involves growing is precisely having more people to help you achieve your vision, if you are really a startup, then you will have to hire a lot of people and fast. Very fast. Some venture capital firms measure growth even weekly and say that healthy, early-stage growth for a startup is 10-15% weekly.
On the other hand, Endeavor considers a step further than startups, these are the scaleups that are those companies that have already consolidated but maintain an annual growth of more than 20% for 3 consecutive years. In terms of the jobs they generate, he found that scaleups grew in human resources close to 80% , while startups reached 20% and traditional companies have a level close to zero percent.
But how do you find the right team in such a short time? How do you know the value that each employee adds to you and how many people will you need to achieve your goals?
It is not easy, especially since you are a new company; Surely you are developing a work area that few people know, you will need specialized people , who will dive with you to an uncertain world such as startups, in addition to the fact that to have the right people you need to match the salaries of other large companies to be competitive in the job market, when you are not necessarily still making a profit.
In my experience as a serial entrepreneur, those key people are the first two or three you hire. They will mark the spirit of the company, they will lead and welcome the rest and if they do not have the shirt on correctly, the objectives will probably not be achieved.
Those fundamental people are the first two or three you hire / Image: Depositphotos.com
Once you have your first circle and trust it, you have to define very well what is needed for each extra position that is hired, what its functions will be and why it is important to continue growing exponentially.
It is also important to generate an analysis according to the marginal revenue curve of the product. Given that hiring more workers generates more income, but also has an additional cost, what is the optimal amount of work to hire?
When you have solved this curve with your business data then you will know what people you need, but time is money and finding the right people generally takes a long time, although today there are tools, such as Artificial Intelligence models that can help you hire more people from larger pools of talent faster. In fact, Hitch, one of the companies in which I am a partner is dedicated to that, precisely because in previous endeavors I realized this problem and wanted, together with my talented partners, to solve this to provide a reliable and effective hiring tool. .
In addition to hiring well and quickly, it is important to do it with people who will be compatible with the business culture you are creating. An important part of this is to have from the beginning a model and bases of work culture that guide you in this process. For example, Netflix is very clear about what it needs from its workers. Here is a sample of his culture manual:
“Entertainment, like friendship, is a fundamental human need; it changes how we feel and gives us common ground. We want to entertain the world. If we succeed, there will be more laughter, more empathy, and more joy.
Like all great companies, we strive to hire the best and value integrity, excellence, respect, inclusion and collaboration. However, what is special about Netflix is how much we:
- Encourage independent decision-making by employees.
- Sharing information openly, broadly and deliberately
- They are extraordinarily sincere with each other
- Keep only our highly effective people
- Avoid the rules
Our fundamental philosophy is that of the people over the process. More specifically, we have great people working together as a dream team. With this approach, we are a more flexible, fun, stimulating, creative, collaborative and successful organization. “
As you can see, they are very clear about the type of people they need, at the same time they seek to reinforce their culture and goals. Also those who want to apply to work in that company will know what is expected of them. That is why I recommend that every startup create its own cultural decalogue. Perhaps as an entrepreneur you are more involved in solving problems, but without a doubt I believe that this is a fundamental part of growing.