4. Team (32 mins)

1. CO-FOUNDER & FIRST HIRES (3:31)
Find complementary skill sets
-important when looking for a co-founder
Establish co-founder equity
-In order to get the people who start with the company to stay around for awhile you divy up equity in the beginning and provide this equity though a vesting schedule (common ex 1 or 2 year cliff w/4 year vest – after cliff period you’ll get a percentage of your equity and then remaining equity over the vesting period – fully vested after 6 years)
-Important to get founders/employees on vesting schedules as it offers incentives for them to stick around
[6:30 mins] – shares retired / pool
-Typically will find 2 founders of a startup

<10 employees, hire generalists >10 employees, hire specialists
BEGINNING
-All depts founder led
-Not all experts, looking for people that can assist you, tenacity, understands working at a startup, hard working, heads down, little management (SOFT SKILLS)
-Designers/developers specialized but may pick up other tasks/job titles
-As the company gets bigger goes from, 1 person do 5 jobs to 5 people do 5 jobs, do 5 people doing one job (this is a called a department)
GROWING
-over 10 employees
-hiring shifts toward depth of knowledge vs breadth of knowledge
-hiring for diversity and inclusivity (right, ok)
-as the founder when it comes to hiring decisions you need to consider what are you spending 30,40,50% of your time doing that you could create a role for
-what am i spending all of my time on here that i need to offload to someone else so I can focus MY time on the business and growing the business
-level of experience is important when you are growing your team, have 10-30 employees and your really starting to break down your departments, near the series a your really looking for people with 2-5 years experience to hire, when your at the series b looking for 8-10 years experience (funding rounds as example but its really when you grow)
-ability to pay more experienced people increases as you grow
-sometimes more experienced people do not want to join a startup in the early stage but will wait for product market fit/later stages (if i’m gonna go to a company I wanna make sure they have escape velocity)
Remote vs. Office
-what can you afford, what is the pool of employees, are you limited by geography
-dependent on the type of employee and the type of business it is (writers/developers don’t talk to each other and write, sitting at computer all day – in most cases it is a solitary endeavor) working from home may allow them to focus more (if mature enough to manage their time)
-building, conception, around table for product work best when everyone is in the same room
-sales teams can be remote if hiring the right people and setting proper expectations
[17:30 mins]

2. IN-HOUSE VS. OUTSOURCING (18:10)
Determine what is strategic: keep in-house
-anything involving long term vision and strategy (handling customers, customer feedback pre-product market fit) – can do once PMF/series A
-if enterprise keep sales and client success managers in house – if driving growth need to be close to the leadership team
Determine what is administrative and/or repeatable: outsource
-ex accounting (xendu), taxes, legal, HR, payroll
[19:30 mins] -benefit of outsourcing, difference of timezones where the work is getting done while your sleeping
*difference between outsourcing to a company that builds apps vs. building a remote developer team
if you hire 4 developers on your payroll and only customer very different than hiring outsourced company where your 1 of X number of customers where you just have to wait (danger least amount of work possible for the highest amount of pay – how they make a profit) vs. internally you don’t have that issue, you pay once those people are dedicated and not distracted
Utilize SaaS vs. Contractors
-ex) outsource accounting
-zenefits, ripling, gusto
-outsourcing can make the resiliency of a department better (they have to deal with turnover, have multiple people working for them)
-look to utilize tools like Zendesk (helpdesk software) because using this type of software will make you bionic, all the data gets stored in it and the next person you hire starts on 2nd or 3rd base

3. HIRING & HR TOOLS (26:59)
Create structure & a repeatable process
-always want to have a hiring plan and stay ahead
-look 6 months ahead to when you will need people and start the process right away
-can be a 6 month process to hire someone, onboard them, and ultimately get them aclimated into a role and settled into what they are doing
-ex) compared to a computer CPU or GPU you wouldn’t want to burn them at 100% of capacity for too long because they burn out and quit
-Good strategy for growth is to keep everyone at 80% so they have a little extra time or capacity to not be burn out (good for communication redundancy, extra capacity, surplus for special projects, etc)
Be proactive and stay focused
-Proactively reaching out and utilizing tools like LinkedIn Talent solutions vs setting up a job description and being passive about it (if you have the time every day reach out to a few candidates that look like they’d be a good fit for the role) (don’t just set it and forget it)
-Don’t forget about other jobs you might have out there which are getting applications that you’re not responding (bad karma, bad form, bad for your brand, people should get a response in
a day or two, remember, the applicant is taking the time to apply to your job)
-Keep your job board updated, don’t want people applying for jobs that are no longer available
-Use your network!
Utilize HR tools
-BreezyHR (can setup pipelines as you move candidates along) / Treat as a sales process, keep people updated

*Founders should write the job descriptions themselves (most people write job descriptions so dry so if you actually write something personal with some enthusiasm about your doing including the company’s mission – you really want missionaries not mercenaries – you don’t want someone who is just firing out a bunch of resumes – you really want to connect with people during this process
*Infusing personality into a job description can go a long way (ex. density example – the ceo of the company wrote a letter to the new employee – this is what were building and this is why we need you
*Reach out to people, be opportunistic during this process, if talent shows up but they are not an exact fit try and find a role for them, especially important in the early days

4. ORGANIZATIONAL STRUCTURE (31:54)
Establish and communicate ownership
Build a team org chart
Adapt as you grow

5. FIRING (39:57)
Create a performance improvement plan
Document everything
Be graceful and professional
Communicate with the team

6. COMPENSATION (53:30)
“Don’t make compensation a conversation”
Do your homework
Get creative
Set employee stock option plan (ESOP)

7. TOUGH CHOICES (1:07:45)
“The ones that got you here aren’t necessarily the ones to get you there”
Trust your gut
Avoid blurred lines