Ways to skip the startup struggle

The Rorschach Test

Look at the image below. What comes to mind

Ignoring the fact that Forbes seems to have a fetish for psychopaths, whether it’s Sam Bankman-Fried or Elizabeth Holmes, with their writers consistently falling in love with hucksters, I think we can agree that these are two very different people pictured. The trouble is, if you’re a founder, and you’re presented with the task of hiring your team, how can you tell the difference between the people who will make your idea soar and the ones who will ultimately make your life a living hell?

The decision on who to hire and when is the most important factor in determining whether your startup with die, barely survive, or absolutely thrive. Yet most founders end up hiring their friends, folks recommended by their boards, or the promising “kid” favored by their mentors. More often than not, these relationships bring more trouble than they’re worth, causing startups that would otherwise succeed to fail.

That’s partly why we created our remote psychological mindset technology—to remove randomness from the hiring process and ensure a startup has the ability to achieve product-market fit, rather than get in its own way simply because it hired the wrong people.

Here’s what we have discovered in the process.

Part One: Never hire one kind of mindset

While the EU’s motto of “United in Diversity” has turned out to be a complete sham, in the startup world you actually do need a diverse array of mindsets in order to achieve your goals. It’s not about what school someone went to, the color of their skin, or their extroverted connections that matter most. Instead, it’s how they think that matters.

Here’s an example of mindset diversity at play:

Here we have (from left to right), an Opportunistic mindset in sales, and Expert in product development, a Disciplined type as CFO, a Results thinker at the helm, a Systems, or big-picture thinker, as CTO, an Empathetic thinker as head of customer support, and a Holistic thinker in charge of the brand and its core values.

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This particular C-suite would lead to strong results built on a solid foundation that doesn’t ignore the human component, but leans into why this company matters for actual people. That in turn leads to brand loyalty and much stronger financial returns while systematically acquiring market share. This would be the ideal.

Unfortunately, many startups look like this:

While Zig Ziglar might be iconic in the sales world, if an entire company is made up of his mindset, then the startup will “cook in the squat,” never fully reaching its true potential. That’s why it’s better to keep an Opportunistic mindset in its proper place within an organization. You don’t want a sales bro running UX/UI, or serving as CFO.

Similarly, you don’t want other mindsets to be in wrong positions either, like so:

Keep in mind: your mindset is tied to your purpose. If a Holistic mindset has the purpose of tying everything together into one beautiful symphony of action that resonates on an emotional level with your target audience, then they will be extremely frustrated focused on the minutiae of backend product development.

Likewise, if Clayton Christensen, the father of disruptive innovation, had to work in a call center addressing customer complaints day-in-and-day-out, forced to follow a script, he’d go insane. And you’d never put a police chief in charge of innovation—that will go nowhere fast, or downhill even faster.

You need to match the mental capacity and natural talents of an individual to their appropriate role. Get that right and the company shines; get it wrong, and everyone is burned out and miserable, drinking too much, and ensuring the company limps along without ever making true progress.

So what does success look like? Here’s an example:

There’s an old saying about buying a horse: the most important things are its brain and its heart—the two things you can’t see. The same is true when hiring. Before Stealth Dog Labs, the subconscious motivations of an individual were invisible. Their mindset and “action-logic” were intangible. However, using our technology, we make these key aspects of the individual measurable—remotely.

Now, we can see clearly why an organization like Amazon, pictured above, has been wildly successful. Their C-Suite is heavy on Results-Systems Thinkers. That means they focus on two things: the big picture and outcome. That should be the gold standard for any startup—not process, rule-making, or making social change. Any startup worth the effort should be focused on getting the right people in the room and in their proper chairs first. That’s part one.

Part Two: Always hire better

Now, take that model and do what Amazon has done for years: always hire better. Always raise the bar. Always set a higher standard for your company.

Because what works today won’t always work tomorrow.

You have to keep hiring a higher mental capacity for a stronger financial outcome.

Let’s turn to this example from JP Morgan Chase:

Even when you hire, for example, a Results-Oriented thinker, you still must take into account their mindset capacity, or the strength of that Results-Orientation. Just because they’re Results-driven doesn’t mean that all Results-thinkers are created equal. There are levels.

In the chart above, we’re looking at net income and the mindset capacity of Results-driven leadership at JP Morgan Chase versus time (pre-COVID). The lower the mindset capacity of leadership, the lower the future financial returns. What happened here was that, especially in 2013, JP Morgan lost some of its shining stars in the brains department. But the effects of these loses weren’t felt right away. In fact, it took about a year for the financial hit to appear on the books. And even once the company started re-hiring superstars, it then took about another year before the financial returns came in.

Looking at this chart, it took about a decade for JP Morgan to rebuild their mental capacity after it plummeting in 2013. As a startup, the one thing you can’t buy is time—it’s working against you every second. So what you should take from this chart is that, by hiring high capacity individuals, you don’t have to learn the painful lesson exhibited here by JP Morgan Chase. Imagine if they had never lost that capacity to begin with! Start at the top and stay at the top, and keep climbing higher.

Okay, let’s look at the collapse of mindset capacity.

Unisys has lost their purpose. They’re trying to get it back through process; but the more they focus on process, the worse it gets. Instead of hiring Results-driven leaders like Jamie Dimon, with high mental capacity, they keep hiring Discipline Mike Pence types with lower mental capacities who are focused on following the rules all the way to the bottom of this chart.

So, for a startup, if you’re adding process on too early—before achieving Product-Market Fit—you’re clouding what will actually bring success. In fact, you’re ultimately killing the very thing that you need: innovation, systems thinking, and results. You’re also turning your process into the product, or even worse, a commodity, which is a race to the bottom and a sign of lower level thinking. Don’t be like Unisys today. Be like Unisys back in 1959 when it brought magnetic ink to the market.

Part Three: When do you hire who

This all might be overwhelming to a new founder who suddenly finds themselves desperate to fill seats at their young company and get the show on the road. But the good news is, you don’t need to hire everyone at once. Instead, if you time things correctly, you can build out your team similar to the movements of a clock.

Midnight starts with your core values, which demands a Holistic/Systems thinker. You need the big thinkers early on. If you don’t get this raison d’être correct from the very beginning, you’ll be operating from the back foot, so to speak. These are the big picture thinkers who can transform your idea into a comprehensive plan, highlighting aspects of your idea you might have missed while actively showing you the business you’re actually in.

More importantly, they can help you understand who your customers are, how to speak to them, and where to focus your efforts. In the process, they can envision the brand as a whole, articulate a winning message, and set the rest of your team up for success. This is the foundation of the house you’re ultimately building. It starts with the big thinkers & architects, not the sales team. They come next.Unisys has lost their purpose. They’re trying to get it back through process; but the more they focus on process, the worse it gets. Instead of hiring Results-driven leaders like Jamie Dimon, with high mental capacity, they keep hiring Discipline Mike Pence types with lower mental capacities who are focused on following the rules all the way to the bottom of this chart.

So, for a startup, if you’re adding process on too early—before achieving Product-Market Fit—you’re clouding what will actually bring success. In fact, you’re ultimately killing the very thing that you need: innovation, systems thinking, and results. You’re also turning your process into the product, or even worse, a commodity, which is a race to the bottom and a sign of lower level thinking. Don’t be like Unisys today. Be like Unisys back in 1959 when it brought magnetic ink to the market.

Part Three: When do you hire who

This all might be overwhelming to a new founder who suddenly finds themselves desperate to fill seats at their young company and get the show on the road. But the good news is, you don’t need to hire everyone at once. Instead, if you time things correctly, you can build out your team similar to the movements of a clock.

Midnight starts with your core values, which demands a Holistic/Systems thinker. You need the big thinkers early on. If you don’t get this raison d’être correct from the very beginning, you’ll be operating from the back foot, so to speak. These are the big picture thinkers who can transform your idea into a comprehensive plan, highlighting aspects of your idea you might have missed while actively showing you the business you’re actually in.

More importantly, they can help you understand who your customers are, how to speak to them, and where to focus your efforts. In the process, they can envision the brand as a whole, articulate a winning message, and set the rest of your team up for success. This is the foundation of the house you’re ultimately building. It starts with the big thinkers & architects, not the sales team. They come next.

From 3-6, in the Mid-Stage, you need your Opportunistic thinkers and Experts. Now that you have a solid foundation to build on, you set out to find your sales team and product experts. These people are responsible for selling the vision then building it based on customer feedback and interactions. That then leads to critical adjustments that fill in the gaps of the holistic vision, limit scope, and generate traction fast. By the end of this phase, you should have an actual house standing on that theoretical foundation.

Then, from 6-8, we are in our “Empathetic Stage,” which is all about decorating that house to make it a home. This is all about taking everything we’ve learned so far then studying the deep psychological triggers that compel people to purchase. This is about seeing the product, business, and brand through the lens of your best customers, determining what separates the A+ customer from the F customer, and then finding more A+ simply by being empathetic to their plight. This is also when you hire your Marketing Team, as well as Customer Service and Support. This is where the rubber meets the road; when you determine what’s working and what’s not. Adjust accordingly.

Now it’s time to cash in. We’re ready to scale and achieve efficiency. That’s when you hire Discipline to bring in process—not before. They will kill innovation in its crib; and, ironically, these are the individuals who are most threatened by the rise of A.I. But they will bring in a specific process for cutting fat, trimming edges, and sharpening distribution. Find the highest capacity ones you can; but don’t sacrifice your company on the altar on “rules” either. These are the types of people who took the chicken out of Campbell’s Chicken Noodle Soup to cut costs—so use their talents wisely, but not at the expense of the good. We are now living in this house, and they’re responsible for the thermostat. We’re not asking them to host a dinner party.

In Closing

Always hire higher capacity, put people in the right seat, and do it in order. If you can pull this off, you’ll be part of an elite group of businesses (about 6%). We see this every day: great businesses respect the mindset of their people. If you do that, you’ll skip the struggles most startups face and have a higher chance of success. Of course, we can help you do this faster too. You just have to give us a call.