October 15, 2024

Scaling Your Startup: How to Go About Hiring Your First Key Team Members

Scaling your startup is an exciting – and fragile – time. You’re building the foundation of your team and informing your organization’s future direction. And, on average, if you’re hiring a CEO, you’re parting with anywhere from 6% to 8% of your equity.

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Everything from the timing of when you hire into the C-suite to the types of roles you prioritize will impact your startup for years to come.

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You need to get it right.

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We spoke with two founders – Mark Hirsch of Templer & Hirsch and Richard Mulligan of Bundaberg Park Village – to gain insights into their process of executive recruitment and discovery. When paired with our own insights into executive recruitment, it paints an interesting and surprisingly consistent picture.

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Hirsch and Mulligan work in different industries and live in different worlds: law in the United States and tourism in the Australian outback. Despite this, they found their quests to find the perfect leadership team quite similar.

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The right time to hire

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We hesitate to say when the time is right for a startup to hire – it really depends on the startup. But there will often come a time when you realize that growth is desirable.

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Or even unavoidable.

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At Templer & Hirsch, Hirsch has been steering leadership teams for three decades. He discovered that the natural time to grow his leadership team was when his clientele grew beyond what his current team could support.

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Similarly, at Bundaberg Park Village, Mulligan found that five years into managing his organization, he was still acting as CEO, CFO, and COO. It wasn’t a tenable situation. He had to grow his team while maintaining the operations he had worked so hard to grow.

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Sometimes, an executive recruiter can help. We aren’t just a service that you call to build your team – we are a full-service, comprehensive consulting partner that can help you determine when is the right time to start to build.

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Defining your hiring needs

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“The first thing you need to figure out is whether you’re hiring someone to help search for the business model or to help execute a business model you’ve already found.”

- Steve Blank

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Hirsch needed leaders to support his growing business, but he was also concerned with maintaining his firm’s values. Meanwhile, Mulligan was more concerned with product fit. Bundaberg Park Village isn’t quite a short-term hotel, nor is it a long-term rental – it resides somewhere in between.

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Every startup will come to its executive search from a different position – and your startup’s unique needs will guide your hiring process.

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Like Hirsch, you likely don’t want your startup to lose the essence of what makes you unique, driven, and motivated. However, your particular startup could also need someone to pull you out of your comfort zone. Depending on your goals, an executive recruiter can help you find someone to do either – or balance both.

In many startups, such as Mulligan’s, the organizational structure is fluid, often requiring team members to wear multiple hats and excel in various disciplines. This flexibility, while necessary, can also complicate the search for the “perfect fit.”

Executive recruiters work with you to thoroughly understand your company, product, current goals, short-term strategy, and long-term vision. From there, we can guide you to make the right suggestions – and give you the candidates that best align with your needs.

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Sourcing your next candidate

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The ideal executive for your startup might not be actively seeking new opportunities, but that doesn’t mean they wouldn’t be excited about your organization once properly “sold.”

Often, founders rely on their personal networks or limited talent pools, which can result in attracting candidates with similar backgrounds and perspectives. This lack of diversity can stifle innovation and limit a startup's growth potential.

On the other hand, using unspecialized hiring agencies, job boards, or open calls can overwhelm you with too many candidates, making it difficult to identify the ones who truly stand out. With the number of needed interviews throughout the process also increasingly growing, this is where an executive recruiter becomes invaluable.

A skilled recruiter can tap into personalized networks, leverage partnerships, and utilize advanced sourcing techniques to find top-tier candidates that align with your company’s needs. This not only saves you a ton of time but also ensures that you’re presented with candidates who have the potential to make the most significant impact.

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Getting buy-in from the candidates

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Hiring is a two-way street.

Mulligan had a unique problem: his executive team needed to be in Bundaberg, a location that wasn’t as alluring as Sydney or Melbourne. Buy-in, for him, was exceptionally important: He needed to make sure that the candidate would not only be happy working for his company, but in his location.

It’s not just about finding the right candidate for your startup. An executive recruiter’s role extends beyond simply presenting great candidates — they must also sell your company to the candidates. The more invested an executive is in your company’s mission, vision, and successes, the more likely they are to contribute effectively and remain committed.

Top executive candidates often have multiple options, so they need to be as enthusiastic about joining your team as you are about hiring them.

A seasoned recruiter can discern which candidates are likely to be truly dedicated to your organization and its growth, unlike those who might see it as another stepping stone in their career.

Finding a culture fit is always easier when both parties start the relationship equally excited.

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Evaluating your potential candidates

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An executive recruiter can really shine when identifying the best candidates. Their magic is distilling soft skills, past experiences, and technical abilities – the things that will truly lead to long-term success – into a single cohesive and quantifiable picture.

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Many executives come from extremely broad backgrounds and have impressive (and lengthy) careers. It can be challenging to compare apples to oranges when looking at a wide range of candidates.

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At Bundaberg Park, a three-step process was developed. The first round was a traditional resume and interview process, the second round was an immersive week within their hospitality setting, and the third was a strategy session in which candidates presented their thoughts about the park's future. Understandably, it was taxing and took time.

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To assess their candidates, Templer & Hirsch implemented a similarly comprehensive approach — thorough interviews, assessments based on real-life situations, and in-depth reviews of their previous managerial roles and accomplishments. “This approach allowed us to assess not only their skills but also their moral character,” Hirsch explains.

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Depending on your startup’s needs and process, a candidate may require anywhere from a handful of interviews to a dozen individual touchpoints and meetings. You don’t need to be involved in every step of the evaluation process — only the later, most critical stages. Rather than having to vet each candidate from the start individually, you can have your executive recruiter loop you into the candidates who are the best qualified and the best fit.

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Why should you incorporate diversity?

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Finally, when growing a small team, each new team member has outsized influence. Prioritizing diversity means looking at a wider range of candidates – candidates with skill sets, talents, and backgrounds that can round out your team and benefit your organization.

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At Templer & Hirsch, embracing diversity was always a priority. “A varied leadership team offers different viewpoints that improve our ability to solve problems and connect with a diverse client base. Ensuring inclusivity is not just a matter of concern; it’s a fundamental aspect of our business strategy to create a welcoming and innovative atmosphere.”

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Likewise, Mulligan wanted to be broad in his canvassing: His current c-suite includes those with hospitality and corporate backgrounds, as well as eco-tourism backgrounds. Mulligan realized their customer base was becoming increasingly diverse, and his company needed a leadership team that could cater to a truly international audience.

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Companies that invest in diversity are more profitable and innovative; they solve problems better and deliver value faster. And, of course, as you position your startup to grow into a larger organization, you’ll want to have these seeds in place from the start.

But diversity isn’t as simple as just “being different.” It takes skill to identify cognitive diversity and the types of diversity that will deliver value to you. Diversity and inclusion have the ultimate goal of finding what is best for your organization without any bias or preconceptions—helping you hire competitively within the market and get the most benefit out of every hire. And that means more deeply understanding your organization's strengths and weaknesses.

Now is the time to embed diversity and inclusivity in your organization. It’s much easier to build a diverse team from the ground up early on — don’t wait until you’re a Series D or about to go public just to discover that you have no women on your leadership team.