Today, starting a business is less about money and much more about people. The web and the way in which social media has changed people’s habits has made marketing a business and building a user base/audience much easier, largely removing the significant cost of gaining traction for a new market entry.
One thing that hasn’t changed is the importance businesses should place on people. Smart, talented people will make a bad product great. Bad people will kill your business.
And so, here are some thoughts on people and why they are the second most important asset your company will ever have, especially as a start-up.
One of the biggest challenges a start-up founder faces is finding people who live it with you. As a founder, working long hours, weekends and bank holidays is a given and not something we think about. We just do it. That’s because it’s our business; it’s our passion; it’s our baby and hopefully, if we ever exit the business, it will make us wealthy.
But what’s in it for employees? Why should they put in the same level of commitment as you? You need people that work outside the rigid 9-5, Monday to Friday week, people who are consumed by making the product great, people who buy into your vision and passionately want to be part of its success. If you don’t have this, the business will struggle to scale quickly and get things done, which as a start-up can really hold you back.
In my experience, people that have worked in a corporate environment, within large teams, are not suited to working for a start-up.
I have formed this opinion from making hires from big companies and the two biggest issues I had were:
1. The lack of understanding that a start-up has minimal resources/budget and everyone has a much broader remit, chipping in to help in lots of other areas that may not form part of their core role.
2. The lack of expert leadership. This is really important. In a large business, most employees have a hierarchical management structure they report into. One of the biggest advantages of this is being given direction and expert leadership. In a start-up, this is almost never the case and employees are expected to contribute to strategy and find ways of making things work, without having someone above them with specific experience.
I have also allocated 5% of my company’s ordinary stock for founding employees, to ensure that if the business achieves a successful exit, those that have stuck by me and helped the business grow will be rewarded well for it.
Wanting to be the smartest, most experienced person in your company is a mistake many founders make.
Having people that are more experienced and often smarter than you working within the business will define how your company grows.
Lose your ego and understand that as the founder you need to build the strongest possible team around you. Look for people who bring complementary skill-sets to the business and know more than you in particular areas.
When interviewing, establish a process that includes potential candidates meeting your team, including those they may be managing.
Getting different opinions and feedback, plus acceptance from your existing team, will help solidify your opinion and will almost always help to integrate new people into your teams.
So if people are the second most important asset to a business, what’s the first? How you empower them.
It is all very well hiring talented, smart people, but without the autonomy and responsibility to get on with their role, take risks and make decisions, you lose 99% of their power.
As founder, your role is providing the vision and strategic direction the business is heading in. When a start-up, it is your job to oversee all core areas of the business and to ensure everyone understands the role they are in and the deliverables associated with it. It is their job to execute and deliver the strategy, so empower them to do it.
Finally, encourage the team to collaborate with each other. You’ll find that as a team, a lot more gets done.