Big advantages of small teams
If you asked us, we’d say that our intention is to stay a small company for as long as possible. Why? Because being small has huge benefits. And also because hiring small team and operating it even when you grow into a multi-million dollar money-making machine is easier and not as delusional as it might seem.
One of everyone’s favorite businesses to point at when talking the big small is Basecamp. AKA the company behind Ruby on Rails, New York Times bestseller Remote (and three other awesome books), and, of course, their flagman product that’s made task management easier for millions of people worldwide — Basecamp.
They’ve been around for twenty years, they’ve brought so much value to tech and creative industries and even secured their company evaluation at $100 billion dollars (not really). All this while employing how many people? As of early 2019 — 54.
The idea behind keeping your team as small as it gets is bound to break the intuitive stereotype that makes us think that the more people we hire the better the business is going. Because, in reality what matters is how much value your team makes, and how much revenue per person you get.
But even if remaining small isn’t your intentional business goal, you’re still going through the stage of hiring your first 10 employees whether you want it or not.
How to hire startup team
Hiring for small teams is very different from hiring for big companies. The main difference is that every hire you make is unique, and, as a new business, you don’t have to worry about following a specific well-designed process, but rather focus on hiring the best talent you can possibly get at this point, while maintaining a great company image and reputation.
You might have heard a lot about recruiting routine at corporations like Google or The Big Four, where they spend months before making a job offer for a junior position to their perfect candidate with Ivy League education. These scalable processes that go exactly by the script to ensure the best possible outcome every time hold the big corps together.
But small company recruitment is not the same. And unless your business model is outstaffing for the same or similar roles, and you need to constantly hire people with the same skillsets, every recruit for a small team is going to be not like the others. And here’s what we’ve learned on how to handle hiring for a small business in the past two years.
First 10 hires
When to start hiring
Rule number 1 of a small business is to remain a one-person show for as long as possible.
Not to mention the opportunity to cut down the operational costs (the fragile spot of every new business), doing everything on your own will teach you to prioritize and optimize. When you can only do so little, you will have to choose the most important things to work on.
The first weeks, sometimes months, of your business is when you have to learn how it’s done by hand, think of the way how to do things better and faster, and then pass the framework on to someone else.
And only when you can’t take care of all the work that’s coming at ya, then it’s time to make your first hire.
What position to fill in first
Judging by our own experience, the first position you fill is likely not to have a name at all.
Instead, you should be looking for the person who could take not a position, but a part in your company. And it’s best if they understand from the very beginning, that with time, their role may, and, most probably, will change.
In the end, there are only two cases in which you should hire:
- You need to scale what’s already working. That implies, that you are absolutely certain that you’ve found something that helps your business grow. Here’s a real-life example: we’ve been struggling for a while to find a lead-generating source for acquiring new clients. We’ve spent thousands of dollars on Google Ads that brought zero clients, we’ve paid freelance authors to write for our blog and hired an SEO agency to tell us what to do, but none of those things worked. Until we tried creating content on Quora, and our first non-referral customers fled to us. We repeated experiments and saw that the more we did — the more leads we got. We learned everything we could, found the ways to optimize content, and started looking for the person who could take it from there.
- You need to take care of the things that bring you down. When you’re just starting out with your business, you do everything on your own. Chances are, you will be focused on sales, marketing and polishing your business model and operations — something you can’t scale or pass on to an employee in the early days. But there will also be a category of tasks that are essential but easy to delegate. Like warehouse operations or delivery, or cold messaging. Our very first hire at Lemon.io was actually the person that was all about customer support and problem-solving for existing clients and contractors, allowing the founders to focus on sales and strategic decisions.
After all, our main advice for hiring first employees is to hire for repeatable operations only. If you need to do something that you don’t know how to scale at the moment, do it yourself first or outsource to a freelancer.
How to hire startup teams: your first employees
The worst part of hiring awesome talent for a new business is that no one knows you, and no one cares. You don’t yet have a name, reputation or yummy corporate bonuses that make people want to work for you.
That’s why your best shot will be to find the first employees in your network.
Your priorities should be looking among people you know and those who they refer to.
If you’re hiring for a position you know nothing about, e.g. you’re a tech founder hiring for marketing, or vice versa, ask the most experienced in that field person from your network to help you with screening the candidates.
And, unless they are your best friend ever, think of a way to pay them back for the hustle. It doesn’t have to be money, think of the best value you can give them. A shoutout on your super-popular social media account, or helping them with their personal website CRO can be a much better way to thank someone.
As we’ve already mentioned, you can’t consider following a big corp recruiting routine to be the best fit for smaller companies. First of all, you are not going to hire the same people.
Also, you have to realize that in most cases with big-name companies, there is always a final boss who decides to hire or not to hire. The decision makers are usually the busiest people, and complicated hiring processes reflect exactly that. In other words, their frameworks exist to eliminate everyone who isn’t the best fit from the first glance and narrow down the pool of candidates.
But with a small business, you don’t have to make your own life harder. You are the one behind the final call anyway, so if you know you want to work with the person, there is really no need to make them go the extra mile neither of you needs.
In the very beginning, with our first couple hires, we didn’t have any framework at all.
As time went by, we realized it wasn’t the best tactic of all, but we still think it was really a great place to start because the process we’ve developed and continued to follow is based entirely on dos and don’ts we’ve faced in real life, not some imaginary restrictions.
And while we have built a framework we try to follow, there are also the rules we stick to when in every case, even if we feel like breaking the usual pattern:
- No love from the first sight. The first impression still counts, and it’s still unlikely you change your mind dramatically about someone you didn’t like at your first meeting. But, unfortunately, it works the other way: as you grow to know someone better, you may discover something you won’t be comfortable with.
- At least 5 emails. Written communication is important, and tells a lot about the person and their style. Sooner or later, anyone you hire is going to communicate with others on behalf of your company, so if you don’t like their emails, maybe your clients or partners won’t like them too.
- No price negotiations. Don’t get us wrong, just like any other business we do have budget restrictions for hiring people. But that just means we wouldn’t hire someone we couldn’t afford working with instead of talking them into working with us for less than they think they are worth. Otherwise…well, you just end up with someone who isn’t satisfied with their paycheck from the start.
- Paid test tasks. Our test task policy is to ask our candidates to solve a real-life problem they’ll have to face if we decide to work together. It helps us to understand whether they are a good fit for the position (obviously), and it helps them to see if that’s what they want to be doing and if they’re actually good at this. Makes sense, right? The tricky part is that their completed test task could later be used by you regardless of whether you hire them or not. That may put your potential employees at risk of not getting paid for the work they’ve done. No one wants it. The easy solution is to pay for every test task and agree on your rights to use the completed task for your business purposes, regardless of the end result and final decision. Such tactics will not only eliminate all the risks for the person you’re interviewing but will also make your test task stand out among the rest. We pay everyone who submits their projects on time. They tell us how much time they’ve spent on the task, and then these hours are multiplied by their hourly rate. And if you’re worried about spending the fortune on test tasks, just make them the last step of your framework.
- Informal meetings too. We usually have two or three meetings before we hire someone. We usually do the intro call with everyone who applies for the position where we tell them about Lemon.io, what we do, and who we are looking for. Then we meet in person to discuss all the details about work and position. And our final meetings before the job offer are usually informal. We take people out for lunch or dinner, or it can be as simple as grabbing coffee or falafel together. We do these informal meetings to see whether we are comfortable with a person and whether they are someone who we trust to influence our company culture. Like it or not, the people you hire first are the ones who define the future of your business baby. So why not take a look at who they really are.
This, and also the following roadmap, greatly simplifies and enhances the whole “recruit startup talent” routine.
So, the roadmap:
- Background check. We always look people up online. A basic search and a look through the social media accounts are really helpful. Of course, you can’t judge the book by its cover, but if their Facebook feed is all about hate speech and voting for someone you can’t stand it’s best to know it from the start.
- Intro-call. To speed things up, we usually ask for a 20-minute call to make a short introduction and see if the first impressions are nice for both parties.
- Reference. The next step is always to ask for at least 2 contacts from their previous jobs and call them. If they have some sorts of reference letters — great! But call anyways. It doesn’t have to be their boss, a coworker, a friend, a person from another department who they didn’t really know but who still agreed to give them a reference are all fine. We believe that anyone who we’d want to work with would have made at least a couple friends in places they’ve worked before.
- Meeting in person. Your chance to get each other better. Ask and tell everything you find important.
- Paid test task. Remember, real tasks only.
- Informal meetings. AKA a formal reason to get another one of da best kebabs in town.
Perfect candidate portrait
If you were looking for the most contradictory advice ever, you’re in the right place.
Because when it comes to hiring your first employees, there are only two things we want to say:
- Don’t settle for less
- Lower your expectations
First people you hire will shape the overall look of your company. That’s why you need to hire the best talent you can reach. They have to be smart, skilled, professional, hardworking, and you have to like them. It’s best if they are great at several things and eager to learn and do new things.
Once you grow into a stage when your company structure can’t be flat any longer, your first 10 hires will become your personal ambassadors. In other words, the best quote that comes to mind: A’s hire A’s, and B’s hire C’s.
On the other hand, you have to realize that to hire good employees for a small business, you will have to look in places other than Google campus or third wave coffee shops for rockstar programmers and growth hackers. You will need to look past all of the glam to find the gem. Your best shots are people who are underappreciated or don’t network that much.
How to interview your first hire
We haven’t seen and haven’t come up with anything better than the hiring checklist shared by David Cancel from Drift. The only other questions we ask candidates are the ones that have something to do with our business or position specifically.
But the other important thing about interviews are the things you say.
Be honest about them. We all know that you’d have to sell your soul to pay employees in a small business the same money they’d get working in a big corp. So, don’t promise them that!
Don’t promise anything you know is not going to happen.
When I came in for my first interview with Lemon.io, the first thing Alex and Vasyl (our co-founders) told me was that CodignNinjas is a startup. And with startups things can happen, that there could be a situation when something bad happens and we’re all out of jobs the next day. Did it throw me off? It made we want to work with them so bad, I didn’t want any other job!
I knew from that moment I’d be working with people who are responsible and real about their business. Everyone who works at Lemon.io knows the risks, and that’s what keeps us moving.
Red flags and reasons not to hire
The person only cares about money. You can’t retain employees in a small business by competing with anyone who pays more. It’s important to appreciate the work they do in dollar equivalent, but there has to be more to what they care about. For some, it’s the experience they can only get with you, for others, it’s the chance to grow you’re giving them, and for introverts, a promise to let them work quietly in a dark room with a tiny fridge can make the best offer they ever had.
Bloated ego. They can be the best professional in the field, but if they think too much of themselves, we can’t bring them home. If you absolutely have to work with someone like that, maybe think about a temporary position.
Work meh, party hard. Don’t get us wrong, we love a good party! But there’s also work in work-life balance.
Onboarding in small businesses
Onboarding process is your chance to cause self-inflicted pain on your business.
If you screw this up, the great talent you hired can turn into a pumpkin with irrelevant information and unrealistic ideas about what they really should be doing right now. And even worse, they will pass the wrong information on to people they hire, and next thing you know, your company is a complete mess.
That’s why we start onboarding even before we hire someone.
Here are the save points you can use for onboarding:
- Your first intro-call. Prepare a pitch about your company. It should be short but integral. Strive to cover all the basic info about what you do, who are your clients, what’s your business model, how you operate, hire, manage and pay your employees, and what you’re expecting from them.
- Face-to-face meeting. Repeat, dive into details, answer their questions and make sure they got you right.
- Test task. Giving your candidates a real-life project is also a form of onboarding. In fact, we don’t know a better way to introduce someone to their range of responsibilities.
- Once you make a job offer and they sign it, send them as much information as you can. It can be all the docs on what you’ve done and learned about the things they will take up from you, any references, books or videos they should watch, anything that may concern them and be helpful.
- Ask what tools they’ll need for their work, and arrange their corporate email, accesses, and subscriptions they need to be ready by the time they come in for their first day.
Being small has its ups and downs. The biggest challenge is to compete against the big sharks for the talent. There aren’t as many benefits for small business employees, so don’t expect people to ecstatic by default when you contact them about your position.
But don’t worry there is something you can do about it! You know how you market yourself to your prospect customers? Yeah, do the same for your prospect employees. Being visible and open about your company culture, inner kitchen and in-house expertise will make it much easier for you to hire your 10th employee.
We’ve invested a little time into writing a couple of articles that would make a statement about the expertise of the team members who we supposed would be the first to grow their teams. This also helped us increase awareness about Lemon.io on the market where we source developers for our network. Turning a two weeks work into a double-kill.
Hiring with training wheels
When not sure — hire a freelancer!
We know how it sounds from the people who run a freelance platform, but we promise it has nothing to do with the advice itself.
I’ll tell you more, if we’re not talking about an executive or managing position, before we hire anyone, we delegate our tasks to freelancers first. This approach allows us to check whether we really need an in-house person or not for that position.
Here are just a few ways such experiment can go:
- You outsource some tasks to a freelancer and discover the ideas you had about the outcomes were not true, and you shouldn’t waste your time doing it (happened for us with a few PPC experts in the beginning)
- You hire startup developer who does the job but you realize there wouldn’t be enough work if you hired someone full-time (we still outsource our occasional front-end tasks to a developer from Lemon.io network)
- You find a great freelancer and end up making them an offer for the full-time position (that’s how we found our first CTO)
Hiring a freelancer like any other business decision has its pros and cons. It’s definitely a bad idea to hire a freelancer when what you really need is a manager unless you hire them full-time for a project. But it’s difficult to find a better idea for a small company with unstable workloads. And if you are not certain how to recruit startup talent and what would work best for you, check out our recent article on freelance vs. in-house hiring.