10 Optimal Staffing Strategies for Early Stage Startups

Embarking on the journey of early-stage startup development can be a labyrinth of decisions, especially when it comes to hiring. In this insightful article, Adriana Hurduc, Strategic Talent Acquisition Manager at Cavalry Ventures, unfolds ten indispensable strategies. Her emphasis on tailored guidance, timely hires, and dispelling common myths becomes a compass for startups navigating the complex terrain of talent acquisition. From the critical roles of a Founder's Associate and People's Department to addressing challenges like remote work, Adriana's insights provide a roadmap for startups aiming at successful and sustainable growth.

1. Identify your unique hiring needs

Because the first hires can be crucial for a startup, it’s utterly important to make correct decisions at that stage. At that point getting guidance from a Talent Partner can be very helpful.?

Adriana Hurduc, who works with mainly pre-seed and seed startups getting to series A, emphasizes the tailored nature of such guidance, recognizing that there's no one-size-fits-all strategy:?

“There is no really just one way of doing things in the end. It really depends on every single company, on the founders’ knowledge, who they are and what experience they’ve gained until that point in their career.” According to her, the key lies in understanding the unique identity of each company, considering factors such as product trajectory and target customer base.??

She collaborates closely with founders from the early stages, delving into their plans, expertise, and scaling strategies. Regular sessions, starting sometimes even before funding is secured, keep the communication channels open. Adriana's involvement extends to talent acquisition, offering insights on interviewing, securing offers, and enhancing retention strategies.?

But generally she collaborates closely with founders from the early stages - from the moment they invest in those companies or sometimes even before they sign the terms and conditions. “I initially just try to understand what their plans are, as well as the knowledge and the approach that they're trying to implement,” Adriana notes.?

Following this, they have biweekly sessions during which she guides them on the next steps like attracting talent, how to interview and extend offers, how to make sure that those are being accepted, etc.?

“And then we focus on retention quite a bit and then hexagon planning, delving into their plans, expertise, and scaling strategies,” she concludes.?

This kind of cooperation helps founders to hire the right people based on the company's real needs and retain them for as long as possible.??

2. Determine the key positions and start hiring?

To determine the key roles, it’s utterly important to keep track of the next funding round and understand the upcoming needs.?

To do this, Adriana always keeps in touch with the investment team: “I work closely with the Investment Team and I know when the portfolio companies will start preparation for the next fundraising round. And then I get in touch with the founders to understand what their plan is. I always ask them: “If you get, let's say, five million for the next funding round, what do you plan to do with that?”

Based on this discussion they determine the next steps and find the key positions to hire.

“And then almost immediately I ask them to start building talent pools for the defined key positions. They should already start hiring for those positions the moment they are midway with the fundraising so that the moment money hits the bank, the key positions are close to / already onboarding and ready to hit the ground running as soon as possible.”

According to Adriana, starting to hire very late and without even defining the roles is one of the main problems of the startups.?

“I try to explain to the Founders in our portfolio that it is important to start mapping out the market for the key roles early on, as this will help them to bring good quality candidates in the pipeline when they are ready to hire,” she adds.?

Determining the key roles early on plays an important role into avoiding loss of runway, which is already relatively short in the early stages of your business. Always keep in mind that for many startups, most of the funding until Series A goes into the salaries.

3. Learn from other founders?

When facing the initial hiring challenge, getting in touch with other founders and asking them about their experience can be a great help.?

“What we are trying to do is to connect the founding team with founders from different companies that went through the same processes. It's always much easier for them to actually listen to the advice and the learnings from different people that actually went through the process rather than from us, no matter how many years of experience we have.” Adriana notes.?

Connecting with companies with similar experience and learning the benefits of hiring in an early stage, helps founders make right hiring decisions with confidence and without any fear.?

4. Don't aim for candidates from big companies

According to Adriana, an industry veteran, one of the most common hiring mistakes early-stage startups make is hunting for candidates from large companies like FAMGA.?

“This is such a typical behavior that it’s incredible that this is still happening. Probably 8 out of 10 companies I work with would like to hire a tech team with people from Amazon, or Google, or Uber.”

Although these companies hold a high level of brand equity and it’s only natural to look up to them, it’s important to realize that their profile is not fit for early-stage environments.?

5. Look for people with background in startups

Referring to the traits and backgrounds that are ideal for early stage startups, Adriana has one piece of advice - aim for candidates that have a background either in startups, or those that worked in large companies before but also dipped their toes in the startup world. ?

“Generally, when you're trying to hire people from large companies, they're very good at optimizing the processes and just being more creative, strategic. But they're not really the best candidates to build the machinery and that is totally fine. There's always going to be people that are going to be suitable for different stages of the business. And, most probably, the people that you're going to hire in Pre-seed, Seed stage will no longer be the right talent that you need when you're at Series A or Series B,” ?Adriana notes.?

She also points out that the main problem with candidates from big corporations is that they might often struggle in the chaotic, high-stress, and unstructured nature of early-stage startups.?

Adriana advises against hiring juniors in pre-seed stages and underscores the importance of finding candidates tailored to different stages of a business. She shares anecdotes of companies hiring individuals from large corporations who couldn't cope with the startup pace, leaving within months. The discussion stresses the significance of aligning candidate profiles with the unique demands of each startup stage.

“We actually had companies that hired people with backgrounds from larger companies and they couldn't handle it: they left after six to eight months because it was just too much for them to cover everything on their own. They're used to having teams, support. They are used to processes being a bit more slow. In the startup you can just work like a maniac for a month on a thing and then the next day, you can just crash that off and start from scratch,” she concludes.?

6. Don’t hire juniors too early

According to Adriana, another mistake startups often make is hiring junior or mid-level employees during the pre-seed stage.?

She advises against this common mistake, noting that while it may seem like a cost-saving measure, it often results in seniors having to invest valuable time in training. Time which a company in the pre-seed stage does not have. Another problem with juniors is that in the uncertain environment they may excel in execution but their effectiveness is limited when the startup is still shaping its direction.?

“It's difficult to train someone when you also don't really know what the product is going to look like, what is going to happen next - you need to adapt fast and fast equals experience. There are a lot of questions that even experienced people would have in mind that the juniors would not be able to solve,” she notes.?

Nevertheless, Adriana recommends hiring juniors in a more mature stage, when the company moves towards late Seed, Series A. But even in this case there should always be a balance within the team: “There should always be a balance. For example, in the engineering team, you should always have at least two seniors, one mid, and one junior.”

Before hiring juniors, it’s also important to make the founders aware that they should also train them. “Because in the end, everyone only wants to hire the best out of the best, but no one is willing to put in the time to actually train the juniors.”?

This kind of approach underscores the significance of strategic hiring aligned with the specific needs of each startup phase.

7. Don’t underpay your employees

Still another important consideration for startups is the compensation. It’s a widespread practice among startups to underpay their staff because the company is still very young. Yet Adriana strongly recommends against doing this:

“One of my aims as an individual is to make sure that the companies in our portfolio do not underpay. I want them to pay market salaries because in the end even if you're in a startup, these people are going to work very hard for you. And if you want good quality talent, you need to pay.? [Also], you as an individual shouldn’t earn way less just because you have decided to join a startup,” stresses Adriana.?

In this context, she advocates for realistic market salaries, steering clear of inflated figures from tech giants like Google or Amazon. According to her, while there might be a slight fluctuation in salaries, it should not result in significant underpayment.

Adopting this strategy in the early stages can help startups ensure better results and higher retention.

8. Hire Key Roles on Time

Referring to some overlooked roles, Adriana mentions two of them - the Founder’s Associate and a role in the People's Department.?

Founder’s Associate

According to Adriana, the role of a founder's associate is critical in startup teams, and thus it’s important to hire for this position in a timely manner.?

“That position is quite crucial for the founding team as what they have to cover day-to-day can immediately become overwhelming! Once you become a founder, your main focus should be first of all making sure you have money in the bank account - which means that you have to fundraise almost continuously - and hire the right team for that challenge: you cannot do that without the funding and you cannot build the product without a good team,” Adriana notes.?

According to her, in the preseed and seed stages, where founders wear multiple hats and do all of the hiring, a founder's associate can handle tasks like interview coordination, onboarding, etc. and provide support in various areas such as finance and operations.?

Referring to the ideal profile for a founder's associate, Adriana notes that that might vary based on the business type and product, with potential candidates coming from backgrounds in consultancy, investment banking, or startups.?

“In some cases I think that an ideal founder’s associate could be someone that comes from consultancy or investment banking. But, it can also be someone having worked in startups before, maybe in business development or younger people who graduated two-three years ago, have some startup experience and are super hard-working because this is what you need,” she notes.?

In this context, Adriana emphasizes such qualities as eagerness to learn, deep dive and explore a lot. According to her, in any case the candidate for this role shouldn’t have more than seven or eight years of experience.?

Overall, founder’s associate is an often overlooked position and yet can significantly optimize a founder's time and ensure startup success.

A Role in People’s Department

Another common oversight in seed-stage startups, according to Adriana, is neglecting to hire someone in the People Department.?

“They just think that this is a topic that can be introduced at a later stage. And I think that is a mistake. You should have someone in the People Department when you are in the Seed stage. That can be a generalist. It doesn't have to be someone that works Monday to Friday, but it should be someone who has expertise in the field to support you to slowly start introducing structure and processes within the organisation” she notes.?

Adriana stresses the importance of implementing HR and ATS feedback processes from the early stages and believes having a People team member can make a significant difference.?

“These are the basics that you have to cover and then it's always good to have someone who knows what they're doing. You'll not go bankrupt if you hire someone in the People team in the Seed stage. And this is going to make a huge difference. We have seen this in our portfolio companies: They have improved so much not only on the quality of the people that they are hiring, but also on retention, which actually saves a lot of money for the company. So this comes with lots of benefits,” she notes.?

Nevertheless, Adriana also points out that there are situations where hiring someone in that role wouldn’t make sense: “There are also companies that maybe do a seed round but barely add any new people to the team. In that case, it doesn't really make sense to have someone full-time.”?

But in general, a dedicated People team member can have a critical impact on building a strong team, ensuring product development, and handling retention, acknowledging the substantial cost associated with managing people effectively.

9. Avoid giving fancy titles

When it comes to bestowing fancy titles too early, Adriana cautions against that as, at a later stage, it will allow hiring externals on top of the current team that bring significant experience for the actual needs of the business.?

She emphasizes the importance of assessing employees' growth within the business before assigning elevated titles, suggesting that startups should refrain from using titles like Head of or VP until a genuine need arises.?

“For example, we have some companies that have hired people who could potentially be considered Heads of but they were just hired as seniors and that's it. And everyone in the team is just being kept as a senior. No one has the title of Head of, VP or whatever, because then you would be able to assess if that person is really growing with the business or you need to actually get someone external to support. And then you can basically play with the titles and different profiles and also bring new people on board,” she adds.?

She acknowledges that as startups progress to late Series A or Series B, it becomes challenging for individuals to grow into the company.?

“It's very few of them that can actually grow with the challenge, realistically. It's a different challenge. And it's not for everyone. And that's totally fine. People consider this as bad. No, it's not bad. It’s just that not everyone is going to be good for every single stage of a business. You might be amazing to grow in the company until Series A but you might not be able to actually strategically support from Series B onwards.”

Thus, Adriana encourages a realistic understanding that certain talents excel in specific phases, and it's essential for startups to adapt their teams accordingly for sustained growth.

10. Choose the work policy that works for everyone

Although there is no one correct option for the work arrangement policies, Adriana underscored the effectiveness of in-person collaboration in early stage startups.?

“When you're just really building the product and you're trying to find product market fit, it's much better and more effective when the team is together in the office because you can easily just talk with each other. You don't have to schedule a meeting, you can just go to the person and ask for a moment to talk” she notes.?

But at the same time finding talent who would like to work from the office has turned into a real challenge for companies. “It's difficult to find the talent, and it's going to be even more and more difficult to find engineers that are willing to go to the office,” she adds.?

While recognizing the current trend toward remote work, Adriana expresses uncertainty about the optimal approach, emphasizing that the decision often rests with the founders.?

Overall, in the condition of the lack of comprehensive data on the impact of remote work on performance and employee satisfaction, many companies mainly base their decision on gut feeling.

Final Thoughts

In the intricate world of early-stage startups, strategic hiring emerges as a linchpin for success. Adriana Hurduc's wisdom has illuminated the often murky path of early-stage hiring. From decoding the Founder's Associate role to the critical impact of People's Department, her insights reshape how startups navigate the hiring landscape. Learn why timing is everything, fancy titles are a cautionary tale, and remote work's allure meets real challenges. It's a strategic dance, and Adriana's playbook ensures you lead with confidence. As you carve your startup destiny, remember: the right hires aren't just employees; they're the architects of your success.

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