I often hear from startup founders that hiring is one of the most challenging things they do. Regardless of company size, maturity, industry, or problems being solved, hiring a great team is a common denominator. Everyone knows that great people build great companies.
When my company, Techstars, reviews accelerator applications, we look at six main themes: team, team, team, market, progress, and idea. Just as we focus on the people in the selection process, hiring a bad apple could seriously affect the outcome of a company, even one with an amazing idea.
So why is everyone still writing about how to hire for startups? Because it's that difficult.
There are always new founders, leaders and managers that haven't been through the process and need guidance. Startup founder teams are always working fast and trying to figure out how to be faster. We teach our accelerator companies how to fail fast, but more importantly how to fail at the small issues, not the big ones.
Hiring doesn't fall into the fail fast category for a few reasons. It's extremely time consuming in a world that is full of to-do's. While hiring is one of the--if not the--most important thing you'll do, it sucks up precious time.
With lost time, comes lost money. The time it takes to vet, train and onboard a new employee is costing your early-stage, angel-backed company some serious cash. Hiring someone who isn't a fit--talk about a serious time and money suck.
The one thing that most founders don't know is that hiring a diverse team opens the door for increased revenue and profit. A McKinsey study found that earnings rise about 0.8 percent for every ten percent increase in racial and ethnic diversity in a company.
Founders, stop looking for duplicates, and start looking for differents.
Here are three things that I tell startup founders, new leaders, new managers, and even experienced entrepreneurs about hiring skilled, diverse performers while building a business:
1. Build a foundation.
The hiring process shouldn't start with recruiting. It needs to start internally. Having an understanding of what it's like to work as a team is important.
Make sure you know "this is how we do things here" or "here is how we approach leading our people." This sets the foundation for who you want to hire and helps candidates understand whether they are a fit.
This step is critical because you create a foundation for your values and the bond that holds the core team together. It can take the form of setting your company's values and defining core competencies or characteristics that you are looking for in all of your employees.
2. Take it slow.
When your business first begins to grow, it's tempting to use that fail fast method and move quickly. Instead, move precisely. I'm not saying move slowly. Rather, be more focused.
Where do you need the talent? What should be the next (or the next after that) hire? Where are the gaps? Take the time to assess what you really need--is it a utility player or a specialty player?
If you don't take the time to answer these questions, your next hire could be your first mis-hire.
3. Opposites attract.
Or, I should say, complements attract. I've found that while starting businesses, people unconsciously build teams that are like minded. It's natural to find people similar to yourself. It's easier to gel with people that are like you and have similar experiences.
A lack of diversity within a team doesn't enable innovation to reach its fullest potential. A survey of about 700 startups found that diversity was important to their company, but few founders thought a diverse team made an impact on their bottom line. As the McKinsey study and many others have shown, nothing could be further from the truth.
A workforce of all relatively similar people, may be creative and smart, but it'll likely lack varying perspectives and experiences and can all too quickly create groupthink. Resist this natural tendency and move beyond that unconscious bias. Embrace the uncomfortable!