011. Why startups should adapt a cultivation, not acquisition, strategy for talent – and why most founders won’t

Welcome to Safe For Work – a weekly newsletter on startup hiring and the human side of org building. Today’s post is about how while founders intellectually understand that Org work is important, alongside Product and Growth – but unlike with Product and Growth, most founders haven’t yet deeply explored and internalized why Org work matters. And therein lies our opportunity.?

Last week, I was talking to a founder – one of Workflow’s clients – about some key qualities that make for great startup team members. Being resilient, comfortable with ambiguity, and mission-driven are three of the most essential qualities for an effective early-stage team. Then he asked an interesting question: “Do you think this is something that people can be trained on, or this something that we should be hiring for?”

I’ll give the short answer now, but I encourage you to stick through the rest of the post for the in-depth exploration:

• The answer is yes and no.?
• On one hand – Not everyone is fit for a startup. You should look for people with these innate qualities. But the work doesn’t stop there.
• Founders tend to vastly underestimate the impact of a strong culture. Culture, especially at the early stages, is what allows you to unlock the full potential of your team.
• In other words, the “startup factor” is a product of both the existing personalities of the employees, and the environment they’re operating in. But a strong culture doesn’t happen on its own – the commitment to build it must come from the founder themselves.?

The “Startup Factor”?

The first employees at a startup are often personal connections of the founders, and their profiles – risk tolerance, mission driven, etc – often are similar to the founders as well. Where founders really need to start thinking about this is as hiring gets broader. Most founders I talk to understand that employee #5 will be different than employee #500. So, what is reasonable to expect for everything in-between??

To be explicit, no, not everyone can succeed at a startup, and founders do need to select for those who can thrive in the ambiguity and rapid rate of change. The fact that not everyone is a fit for early-stage is not a moral failing, as the work is just challenging in a very specific way.

But not even pedigree is a guarantee for success in a startup role, and the aforementioned resilience, tolerance for ambiguity, and commitment to the mission are just part of what makes someone great in a startup environment. Let's call the sum of these traits “The Startup Factor.”?

The good news: The Startup Factor is the product of both innate qualities and culture. In early stage teams, Leadership can drive culture through transparent and regular communication, openness to feedback, and creating space at the table for early employees to take ownership. Employees who naturally have these essential startup qualities will thrive, and those who’d been on the edges will also flourish. Together, this is the team that will lend their commitment to building your dream – and perhaps, adopt it as their dreams as well.???

Commitment is built, not bought?

A significant milestone in a venture-backed founder’s journey, post Product-Market Fit, is reaching the Org Scaling phase. Building an effective organization is how impact is actually achieved at that scale – not by founder heroics. And with it, comes the need to accept the contrasting motivations between themselves and the hundreds, (perhaps thousands) of people they need to hire. Founders are, it goes without saying, all-in – fully committed to both the upside and the downside, an unreasonable expectation for most employees.?

In fact, the act of fundraising is a self-brainwashing exercise, though I don’t mean that pejoratively. The typical process involves grinding for months on something that doesn’t come naturally to builders – flattering VCs’ egos and convincing them to sign big checks. Playing this game means evangelizing the mission, projecting full confidence, and convincing yourself of the world-shaking potential of a nascent venture.

Assuming that hurdle is cleared and a war chest has been secured, the focus shifts back to the internal – to employees, who need an altogether different type of convincing and demonstration of leadership.

To state the obvious-but-little-understood dynamic: winning over talent is a different game than winning over VCs. Investors bet on multiple companies (usually not even their own money), hoping to land on the next Facebook. The VC model factors in most companies going to 0. But employees have only one career to place bets with, and it is always an intensely personal decision – No hardworking, ambitious person approaches their career casually.?

In-demand talent will always have other options, and they will need to see a continuous demonstration of progress and investment into the Organization, not just Product and Growth. Employees care about career growth and work environment, not just a chance at an outsized outcome – and this doesn’t necessarily make them “less committed” workers. In fact, this is entirely a rational perspective to take, rather than optimizing for "lottery tickets.” Founders who understand position themselves for a massive competitive advantage in assembling a team of high performers.

In other words: From the perspective of talent, employee experience is the best proxy for the founders’ capacity for Org Scaling, which in turn, is the best proxy for the chance to build an effective organization suited to achieve its mission at scale.?

The most effective strategy for startup talent is cultivation, not acquisition?

Wouldn’t it be great if hiring worked like grocery stores? Browse the shelves and grab whatever meets your exact requirements, and ooh look at that – this one is on sale, what a deal! But this fantasy assumes 1) you have the funds to pay for talent that someone else has cultivated (pricey) and 2) there is some kind of secret talent factory that manufactures startup-ready employees.

There is no secret talent factory. It is definitely not Stanford, MIT, etc. As anyone who’s been hiring long enough can tell you, pedigree is no guarantee for “The Startup Factor.” And it is certainly not AppAmaGooBookSoft – in fact, talent strategy at Big Tech Co’s relies on startups as a major supplier of their talent needs. And they can afford the high prices, which means any startup going for the same will simply get outcompeted.

So what’s a startup to do? Step one is to forego the fantasy of being able to simply cargo cult Big Tech Co strategies. Step two is to accept that there is no startup talent factory out there, nor could you afford the pre-made goods anyway. The solution is to grow a garden.?

This is the heart of great startup People & Culture work. It’s not just compliance, administration, or frivolous “wellness programs” that’s representative of Traditional HR. Instead, it’s about consistency, care, constant communication – effectively channeling the emotional investment of your team, showing them a path to growth, and sharing in the upside of success.

But startup founders aren’t exactly known for their orientation toward cultivation. The stereotypical founder skill set is about hacks, shortcuts, and hustle – much-needed skills in the very early stages of a company. But this is in direct contrast to core of org building work, which takes listening to employees, iterating, slowing down and getting feedback, iterating some more, rinse and repeat.

This is why the growth stage of an organization is such a big test for founders’ journeys. Often, the first natural reaction in this moment is for founders to look for others exactly like them. But a company can’t reach scale by hiring hundreds of the founders’ clones. It is valid to prioritize “The Startup Factor” – self-starters who are comfortable with ambiguity and mission-driven – but it’s the job of leaders to create them, instead of expecting to drop in our laps fully formed.

(Sidebar: There are of course some specialized roles that will be fulfilled by paying for it – See the Build vs. Buy framework by Melody Koh. But this is not the case for the majority of roles, especially at the early stage. Plus, success as a venture-backed company usually means hiring in the hundreds, if not thousands, which cannot be maintained by a pure “Buy” strategy.)?

Conclusion

Back to the original question – “Do you think resilience and a focus on mission is something that people can be trained on, or this something that we should be hiring for?” Perhaps a layer underneath this question is another question: “Can people change? Can I change them?”?

As the saying goes, we can’t change other people – that’s why hiring is so important. At the same time, we underestimate just how much people can be changed by their environment, and that is absolutely something that founders do have (some) control over.

It’s fascinating to me how widespread this has become – the fact that most founders are not naturally inclined to culture work that cultivates more of “The Startup Factor” – it’s because they’ve never needed it. No one's had to hand-hold them to get to where they are, and thus, founders can be wary at the thought of now having to do it for others. Maybe founders really are a special breed that are born, not made, who knows? But that’s not the relevant question. Instead, it’s about how to hire the best team possible, if we agree that employees don’t work exactly the same way as the founders.

This partly explains why startups typically don’t offer the best employee experience, despite their great potential. I think that’s ok. No one can be great at everything, and that’s why collaboration is so important for us. What makes founders great doesn’t lend itself to culture and org work, but that’s what the Workflow team and I are great at, and keeps us busy ???

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Jennifer Kim is the CEO/Founder of Workflow, an education and consulting company that trains the next generation of startup leaders on all things Recruiting, People Ops, and DEI. Through its flagship program, the HireEd Accelerator, Jen and her team have taught hundreds of startup leaders to make hiring a competitive advantage. Previously, Jen was Head of People at Lever and was Advisor to dozens of top startups. She is also a Venture Partner at Symphonic Capital, and is known for her hot takes on tech industry and culture as @jenistyping.

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