Economic Calendar: April 16-April 20
You have the mother of all ideas, and investors have handed you a couple of trunks full of cash. That’s all great, but now you have to hire people.
I have run 20 start-ups, and I can tell you that, outside of raising capital, the part I enjoy the least is hiring people. Most entrepreneurs want to just start working on their idea. But unfortunately, unless you are a consultant, doctor, lawyer or some other professional that doesn’t need a team, you’ve got to put one together.
Assembling your first team is like putting together an expansion franchise in the NBA. In the first year, some employees will quit or be fired. Few will survive over five years.
But don’t worry about it. Companies go through life cycles. The skills needed to start a company are different than those required to grow and maintain a business.
When starting your company, avoid hiring friends and family. If it doesn’t work out, you will lose your support network. What you need to do first is develop a profile of the positions you plan to fill.
Here are the steps I take:
- Step One: Make a list of all the positions the company needs to fill in the first year, which should be in your business plan.
- Step Two: Develop a list of duties and responsibilities for each new employee and the title of the worker’s supervisor. Describe the type of experience each position requires. Include a salary range and description of the benefits.
- Step Three: Send a description of the positions to family, friends and business colleagues. This is a good group to consult, because they know your personality and business style. They also will be careful not to send you a dud. Ask them to email you biographies and resumes of prospective employees.
- Step Four: Follow up with telephone interviews for interesting candidates. After narrowing the list, ask the best of them to meet you in person. If possible, have someone you trust sit in on the interviews to give you an honest appraisal of the prospective employees.
Most people are poor interviewers because they don’t ask questions that let job candidates express themselves in a substantive way. Try to ask questions that require some unrehearsed thought so you can see how people think on their feet.
Here are the 10 questions I start with when interviewing potential employees:
- What intrigued you about the company? Creating something should make them salivate.
- Have you ever worked for a start-up before? If they haven’t, it isn’t a deal killer. But what you should want to hear is that large companies stifled their creativity and performance. Their words need to grab you by the collar and say they need to be in a start-up because they like adventure.
- What did you think of the experience? Potential employees who have worked for a start-up and liked it usually recall the camaraderie and the excitement of the launch.
- What did you like least? Usually they didn’t like when processes and reporting lines were put in place and they started needing an appointment to see the CEO.
- Describe the best boss you ever had. A person who needs specific direction may have a problem with an entrepreneur whose mind is racing like a Formula One race car.
- What type of work environment do you like? If they say structured, they probably aren’t a good fit, because a lot of what goes on in a start-up is organized chaos. Things are happening rapidly and change is a constant.
- What is your work regimen? I know people who refuse to work more than 40 hours. You want workaholics. People who are so driven by success that their Blackberry also functions as their alarm clock and is placed on their night stand.
- How do you handle problems? As a start-up guy, I don’t want people coming to me every time they have a problem. I want problem solvers who don’t panic. I ask candidates what their processes are for solving problems.
- What if you think I am wrong? What do you do? I have had candidates tell me that I am the boss and my word is law. Wrong answer. Push the ejector button. You want people to challenge your decisions with logic, when warranted.
- What is your communication style? It isn’t all about good writing and speaking skills. I want to know if they are direct communicators or politicians. In a start-up, you don’t have time for people who worry about saying the right thing.
The first team you build will determine your success. Avoid a person whose first question is about salary and benefits, even if they are sales people who are motivated by money. Take your time and do it right. Select people with high energy, a strong work ethic, good interpersonal skills, loyalty, strong family values and integrity.