There has never been a more exciting time to be an entrepreneur. In fact, being an entrepreneur has moved from the status of ‘mad scientist’ to officially cool, thanks, largely to a string of explosive entrepreneurial success stories that now dominate the media, many of which now hold lofty positions in the Fortune 500. Banks, angel investors, venture capitalists, celebrities, TV personalities, TV shows—and everyday folk who have accumulated wealth during the recent boom years—now queue up to seed fund the next powerful start-up. In the US, SMEs now account for nearly half of GDP and 85 percent of the jobs created in the EU between 2002 and 2010 came from SMEs.
But, the entrepreneurial dream does have a dark underbelly. Startup failure rates are, of course, high, with reports suggesting UK three-year failure rates to be around 30 percent, and in the U.S., these three-year failure rates are at 44 percent.
So, entrepreneurs have a lot of things to get right when starting and managing their business idea to ensure success, one area of which is the hiring of top talent, which can be a key differentiator in those critical early years.
But, it’s not just about finding top talent, it’s about finding people that are culturally suited to that unique, energetic, random, chaotic, post crash, generation 2 startup environment where there is now a more cultivated expectation of real success as opposed to just overinflated valuations and futures that never arrive. In today’s startup environment, talent must have more than just ideas, passion and energy; it also needs commercial thinking, calculated risk taking and an unswerving focus on delivering tangible results against an agreed business plan.
To help employers and recruiters who may be staffing up for a startup, I have set out a list of six ideal qualities you should be looking for in your startup recruits to help maximize your chances of realizing your dreams.
There may be a lack of established processes and procedure in a startup and the environment can become chaotic as you turn left, then right and then left to respond to customer’s needs and a changing marketplace, which you may be acutely sensitive too at these early stages. Change will be constant in a startup environment and employees who are not flexible and adaptable will struggle to be effective in a startup; so, always hire candidates who are open to change.
2. Customer and interpersonal skills
We live in a world of mass customization; customers are more sophisticated and fussy and want products and services that are more tailored to their preferences. This means organizations are having to become more customer focused and become better at communicating with customers and understanding their needs. If smaller firms are to compete with bigger firms in these area, they need all hands on deck, meaning all employees must be able to effectively engage with customers. There’s no hiding place in small companies. Always hire employees who understand the customer and who you can take or even send to see a client if need be.
Loyalty takes on a disproportionately large significance in a smaller company. If a company of 50 loses one person in a year, it loses 2 percent of its workforce. Yet, a company of five loses 20 percent of its workforce, seriously eroding its ability to deliver against client commitments. Loyalty is one of the most important qualities to look for in a new startup recruit.
In a startup environment, there will be very few established procedures and you’ll be facing many internal and customer problems for the first time. You’ll need employees who are used to solving problems and coming up with original solutions and, they must be capable of doing so with limited resources. Problem solving and creativity are key skills that you should screen for.
5. Passion for what they/you do
In a startup environment, you might not have all the correct HR procedures in place to motivate your staff, yet you’ll need them to be completely driven. Try and hire people who are borderline obsessive about what they do, that is they spend their days and nights thinking/doing it, and then all you really need to do is channel it. This kind of raw passion can be the engine of startups. I have seen it myself.
6. Can be channeled and is commercially focused
I have seen this happen too. The quickest way to burn through your seed funding without return is intense, uncontrolled creativity without any short, medium or long term focus. This, of course, works for a while but can’t go on for ever. And there is much less patience for it in this post-crash generation 2 startup world. So, while it is important to hire passionate and creative people, also make sure they are, to some degree, commercially minded and understand the value of delivering a usable, customer-focused end product at some discernible point in the near future. You must find enthusiastic talent, which can be channeled.
I understand that you can’t get the perfect balance of each of these qualities in an individual person, but at the very least you should be able to generate a balance of these qualities across the entire team.