The Startup Dilemma: Who Should Be Your First Hires

Problem

Early-stage startups, typically, face many dilemmas. After raising venture money and doing a fair share of research and development, you feel like you are ready to conquer the world. All you need is the right people to help you materialize your dream. This will give rise to one of the startup dilemmas -- who should be your first hires. When you have decided on the roles, get yourself well-prepared for the hiring process.

Actions taken

• Project your growth for the next 12 months. If you expect your company to grow fast on the engineering side, your first hire should be either a SDM (Software Development Manager) or a Director of Engineering.
• Set your priorities taking into consideration your dual capacity as a co-founder and a CTO. If you will focus fairly on fundraising, you will be away for a considerable time and your engineers will be left without any supervision and guidance.
• Your every hiring decision should reflect your principal focus on leadership and not management.
• When in doubt who to hire, a Product Manager (PM) or an Engineering Manager (EM) always choose a PM. Even though Product Managers are not exceptionally good at managing people while an EM can manage people well. To compensate for not having an EM, make some senior developers responsible for code reviews, approvals, etc. The most senior developer can also serve as an architect for the product.
• Do not consider hiring an EM unless there are at least 30 engineers around. If nevertheless, you decide to hire an EM externally, you will have to promote someone from your team simultaneously. External Engineering Managers are notorious for wanting to change the product and you will need someone to protect the original product and product vision.
• Don't rush with a QA team. Instead, look across the industry for innovative approaches. There is a company that dedicates an hour monthly to testing with all the business teams. Every employee does the testing -- not only that each of them provides service to the organization but moreover, it is an opportunity for employees to familiarize themselves with the product.
• During an interview, focus on chemistry and try to feel if team members will echo each other. Distinguish between collaboration and communication when hiring: before, I put more emphasis on the communication while neglecting the collaborative potential of a new team member. In the meantime, I became a huge advocate of collaboration and you will be able, after conducting a few interviews, to instantly spot a good collaborator.

Lessons learned

• Take your time to think through organizational questions. It is important to anticipate on which side and how much your company will grow in the next 12 months and plan the prospective hires accordingly. The ideal ratio of engineers to a PM is 7:1 but that number can differ due to type/number of the product(s), relevant experience of a PM and the current organizational stage (startups vs. bigger companies).
• EMs are not unavoidable at the early stages and hiring them pays off only if you have at least 50 engineers. However, hiring someone who is between a leader and a manager would be the most preferred option.
• Lack of EMs can be filled by putting more emphasis on collaboration and teamwork, while senior engineers can be driving the quality of things.
• It is recommendable to give priority to leadership over management at the early-stage startup. Leaders inspire, they drive the team in the right direction. Managers raise a bar, they push the team, but they don't inspire.

"Your every hiring decision should reflect your principal focus on leadership and not management."

"It is recommendable to give priority to leadership over management at the early-stage startup."