The Difference Between Your First, Second and Third Wave of Hires

You have two candidates in front of you for an open role. One has ten years of relevant experience. They worked for one of your competitors and one of your clients. They have a very specialized skill and know the tools and technology you use.

The second candidate is right out of school. They have some good internships, a broad based education and can do a little bit of everything.

Both were referred to you by people you trust.

Who do you hire?

Like just about everything else in life, it depends. 

As your company grows, the type of team member you hire will also change. Sticking to core values, hiring highly talented people, and looking for people who elevate your culture never change. But everything else is up in the air.

YouTube started as a dating site. Groupon started as social media for nonprofits and activist groups. Shopify was a snowboarding site. Futurety was founded as a startup incubator and fund, then became a health tech consulting firm, a telemedicine company, an innovation consulting firm before finally figuring out that data analytics and marketing is our thing.

The most adaptable startups win because they understand how important it is to adapt quickly, hire slowly, and hire right. 

Pre Business Hires

If you’re truly being scrappy and building your company out of your own checkbook your first employees will probably be you, a co-founder, your significant other, contractors, and interns. At this point there really is no company. It’s you. You’re out there selling. You’re delivering the service. You’re writing code. You’re invoicing. 

You want to hire for specific projects and tasks. It’s the approach of go sell something, hire a 1099 contractor to make that something and see if the market cares. If they do, sell more. Make it better and repeat. Once the market starts validating you, you’ve earned the right to move to being a business.

First Wave Hires

When you’re ready to make those first 10 or so full time hires, look for smart generalists. These are individuals who are likely recent graduates and early in their careers. 

There are a lot of good things about these hires. They are still in the mindset of learning. Every semester everything they do changes, so the frenetic pace and frequent shifts of a startup won’t seem that odd. 

By hiring a team with general skills, you can still adapt rapidly to the market. I’ve heard these first hires described as Swiss Army knives. They are just good at a lot of stuff and as projects and new clients come in, these team members are able to fulfill multiple and varied roles. 

These team members also haven’t picked up bad habits and with good mentorship and guidance can help shape your company culture. 

Second Wave Hires

Somewhere between 10 and 25 employees, what you need starts to change. The market has validated you. You’ve had big wins so you know what you do well. You’ve had spectacular failures so you know what you don’t do well.

You are winning bigger and more sophisticated accounts that focus on what you do well. This often means the level you need to fulfill those demands changes.

Now you are hiring more experienced people with more specialized experience. They may be less flexible than your first hires, and these individuals bring more targeted skills. They also have more years of work and life experience. They can challenge you with an outside perspective. They are more likely to have been through marriages, divorces, raising families, and experiencing loss. They’re tough and probably not going to get upset over a difficult client or constructive feedback. They do the long hours. They tend to stay with the company for years and look to make a career with you.

Seismic Shifts

When companies hit a wall in growth, founders are often told “what got you here, won’t get you there.” This is a nice way of saying your team may be a victim of their own success. The skills it took to be a great developer, accountant, consultant, or sales rep at a $5 million dollar company are very different from the skills it takes to do that same job as a $50 million dollar company. I’ve been through two of these shifts in my career, where nearly an entire company was turned over in a very short period of time. It’s hard, it hurts, but it happens.

As a founder, you aren't immune from this. If you track companies from startup to IPO, less than 25% of founders make it all the way through. Even after the IPO, the founder is often replaced. In my experience, when companies don’t go public, the board and investors still replace the founder when the requirements of the job outpace the founders’ growth.

This cycle is hard, emotional and not for the faint of heart. The ups and downs are exhausting. 

Ultimately you can build a great culture, be a launching pad for some team members, being a long term career for others and earn a reputation as someone who builds and develops great teams through all these stages.