With all the emphasis from venture capital experts and the hallowed halls of prestigious business universities on the importance of conducting a lean startup, where is the fine line between too big a staff and being under-staffed?
Many entrepreneurs are likely to ask this question, but it may not be the best question to ask, especially when you’re too busy with other matters such as the rental of office suites.
Thinking of staffing requirements from a quantitative perspective can easily lead to the kinds of problems such thinking is trying to avoid. A more productive way to address lean startup staffing is to question it qualitatively by building workflow models and experimenting with various technologies and cross-trained staffing options.
If you are tempted to treat this lightly, go back to startup 101 and review one of the major reasons for entrepreneurial failures, viz., scaling up too soon.
The way to turbocharge an entrepreneurial startup is to put a priority on hiring multi-taskers, providing them with advanced technologies, and using outsourcing judiciously.
Startup staffing strategies:
1. Perhaps the most critical and frequently misguided decision in startup entrepreneurships is at the very top of the staffing pyramid. Is it really necessary to have a partner or cofounder? Too often, the answer becomes yes for the emotional and financial security of sharing the stress and uncertainty with a cohort. If you can’t stand the heat, better you should get out of the kitchen because having somebody in there next to you doesn’t eliminate the heat. Especially when you partner-up with somebody from school or the gym that mirrors your capabilities. Whatever else you may have in common, it should not be your skill sets and business strengths if you team up with a founding partner, because cofounder issues are at the heart of many startup failures. If you do feel a justifiable need to work with a cofounder, consider looking outside any narrow parameters of your particular industry because innovative ideas often come from those with a fresh perspective who are not limited by familiarity.
2. An entrepreneur in SE Asia once remarked that he had so many employees because labor was cheap. It took considerable explanation to convince him that over-staffing is counterproductive because everybody thinks somebody else will attend to whatever needs to be done. A more productive staffing model is to under-staff so that employees feel indispensable and productive, contributing to their loyalty to the company and making their days go faster. Nowhere is this more critical than in a startup because ramping up too fast creates unnecessary financial pressure and dilutes productivity at a time when the margin for error is least yielding.
3. Hiring startup staff that come from a fortune 500 environment because of their impressive credentials can be an unmitigated disaster. The perks and predictability of an ivory tower corner office with legions of support staff may have been conducive to the candidate’s job performance but whether that candidate will perform in the frenzied and continually changing atmosphere of a hands-on startup culture can be a longshot. Keep this in mind when recruiting.
4. Snap hiring decisions can lead to unexpected consequences and are not so much decisive as they are taking a path of least resistance. Often, there is pressure to fill a critical startup vacancy that is impeding progress and better judgment and due diligence yield to the prospect of shortening your to-do list. You will never suffer from a decision not to hire someone, but rushing a decision to hire, whilst never wise, can have devastating consequences in a startup environment. The best practice in this situation is to involve others in the startup in the hiring decision.
Too often, founders of startups who are otherwise diligent and creative in pushing forward their entrepreneurial products or services tend to occupy a mental rut when it comes to bringing their visionary energy to the hiring process. The practicality and good judgment of maintaining a lean startup via judicious hiring is fundamental to a successful startup.