"How to Build a Great Company" Series (8/18): STAFF TEMPORARILY (Stage 2)

In the first sub-stage of the LAUNCH stage, “Staff Temporarily”, there are two currents at work:

1. Launchpad employees jump in temporarily as venture employees to get the new venture ready for launch
2. Gradually, the venture replaces all temporary venture employees with permanent venture employees

Note: “Launchpad” refers to the structure that is supporting the building of new ventures (i.e. accelerator, incubator, venture studio, company builder).

To explain both currents, let’s briefly summarize each task in this sub-stage.

Task 29: Bring in Core Team

First, the launchpad staffs some of its own people on the venture. The initial group of people that should be there on Day 1 of the LAUNCH stage is called the core team. The core team consists of EIRs (entrepreneurs-in-residence). These are fast, scrappy, and experienced venture builders whose objective is to rapidly build up the venture until someone is hired onto the venture’s payroll to replace them. 

That core team consists of a product lead, a tech lead, engineers, business developers, and someone managing HR and accounting. Sometimes the venture MDs are a part of this core team (and start off with a launchpad contract), other times they join later (once the venture has a legal entity that can provide them with employment contracts).

Task 30: Define Target Organizational Chart

In this task, you design the org chart your venture must have when the 100 Tasks are completed (i.e. at the end of the SCALE stage). Make sure you minimize the number of hierarchy levels to maintain a flat, fast, and decisive culture. Also, centralize your team as much as possible in global HQ (i.e. minimize the size of local teams).

 Lastly, customize your org chart according to the following three drivers:

1. the nature of your product (B2B or B2C, industry-specific, extent of tech)
2. your go-to-market strategy (order and pace of expansion to countries/cities, availability of local talent)
3. your operations (this is always highly unique to the business model!)

Task 31: Kick Off Hiring Roadmap

First, turn your target org chart into a prioritized hiring roadmap. That is, ensure your target org chart turns into a list of what position you need to hire in what order (by importance and urgency). 

As mentioned in prior posts, try to hire top-down. That is, positions like Chief Product Officer, Chief Technology Officer, or their equivalents should probably be on the top of your hiring roadmap. Conversely, junior positions at the end of the value chain (and at the end of the order process), such as 2nd level customer care representative, will probably be at the bottom of your hiring roadmap. 

Importantly, the EIRs play a special role in this setup. (The EIRs are staffed on the venture but have launchpad employment contracts.) 

• On the one hand, the EIRs should work closely with HR to hire their permanent replacement. They know better than anyone what is required for their role in the future. 
• On the other hand, the venture MDs should try to incentivize some EIRs to switch from the launchpad contract to a venture contract. The venture MDs can offer the EIRs more responsibility, a better job title, and more long-term commitment to one mission (in some cases also with equity) in order to lure talented EIRs to stay at the venture.

Task 32: Institute HR Independence Dashboard

Your venture should be fully staffed with its own employees (i.e. on its own payroll) by Task 97, Staffed 100% with Permanent Employees. That point is called “HR Independence” because the venture is independent from the launchpad in terms of people. That’s a challenging milestone to achieve because — starting in this sub-stage — the venture has to rapidly hire its own people to replace the interim ones who have launchpad contracts. In a short amount of time, the target org chart (Task 30) has to achieve the goal of being fully staffed with the venture’s own employees.

And the “HR Independence Dashboard” is the main tool to help you track your progress towards meeting that goal. It’s a spreadsheet that condenses information from your prioritized hiring roadmap (Task 31). 

The dashboard provides you with quantitative insights into your hiring progress. For example, it can show you that you’ve hired — for your entire venture — 11 out of 23 employees. In other words, you’re 48% towards your goal. One level deeper, the dashboard can show you a more nuanced picture: Sales & Marketing is at 4 out of 5 hires (i.e. 80% progress) whereas Operations is at 1 out of 4 hires (i.e. 25% progress).

Case: Big Venture Studio with Big Goals

Rachel was one of my previous clients. She was leading one of the biggest corporate venture studios in the US. She asked me to help her with her key challenge: to achieve the goal of building 10 independent ventures per year. For her, “ independent” meant being a self-sufficient venture that has its own employees, culture, and processes.

Together we worked on ways to achieve this audacious goal. 

1. First of all, we ensured that the scope of the business models is as similar as possible
2. Then, we staffed the launchpad with a lean team that consists of people who could run the launchpad and people who could serve as the core team of the ventures. 
3. Lastly but most importantly, we implemented the tasks of this sub-stage for their first few ventures. 

The keys were doing the groundwork for this sub-stage and being strict with getting them to 100% (Task 97) fast.

As a result, Rachel did achieve her goal of bringing 10 ventures to independence within her first year. Rachel was strict about making sure that the launchpad people that form ventures’ core teams were quickly replaced by permanent hires. Aggressive, disciplined, and transparent hiring helped the core teams (i.e. the EIRs) quickly and effectively jump to launch and scale one venture after another. Ultimately, the venture studios’ ventures were able to stand on their own legs early and operated well independently.

Rachel learned that a smart and fast HR strategy, like the one outlined here, is the foundation of successful company-building at scale.