Hiring Mistakes That Cause Failure

Starting a business is no easy feat, but it can even be harder to keep afloat when mistakes are made in the hiring process. Hiring is one of the most critical steps for any startup, and the decisions made during this stage can have a major impact on the company's success. 

As a successful Toronto-based recruiting firm with a global scope, we have worked with thousands of Founders and CEOs to help them make strategic hires across Product, Design, Marketing, and Sales. Over our 20 years of business, we remember companies that no longer exist. Companies and brands we thought would never fail, but sadly did.

Why Did Some Fail?

Thomas Eisenmann, a Harvard Business School Professor and Author, has written about Why Startups Fail, stemming from years of research. According to Thomas, most VCs will provide a simplified answer to the reason a startup fails - the leadership, or as he puts it the "horse or the jockey."

But after digging deeper, he identified six patterns common to startup failures - one of those failures is poor hiring decisions. 

Today, we will share three key insights that can help you avoid startup business failure due to poor hiring decisions.

Engage a Professional

Of course, you were expecting us to tell you this, but for a good reason. The earlier the stage of a business, seed funded or Series A, the more likely that the hiring process and decisions will get emotional and personal – roadblocking what needs to happen. 

This often happens because of a Founder’s:

  1. Insecurity: leaving them unable to hire more experienced talent
  2. Anxiety: leading to analysis paralysis and stalled hiring
  3. Founder-itis: thinking no one is good enough for the brand
  4. Fantasy: wanting the hire who only exists in their dreams
  5. Vibing: allowing 'culture fit’ to trump skills and abilities

These scenarios are regular occurrences for first-time Founders and often cause them to make bad hiring decisions that cost the business.

Engaging a third-party recruiting partner solves this problem by introducing the Founder to candidates they would not otherwise have access to and working with the Founder on their decision-making, whether encouraging, challenging, or confirming their opinions.

Find the Right Resources

Not all recruiting firms are created equal. A VC and Founder need to identify a partner whose clients are closest to their stage of business. Martyn Bassett Associates stands out from other firms by providing high-touch niche services in an engaged model that ensures commitment to a hire. We deliver a model similar to how our clients build products: small, agile squads who work rapidly to achieve an outcome. 

Our fastest Product Manager search happened over a 3-day weekend, and our fastest VP Product Management search was wrapped up in 33 business days.

But that doesn’t mean we are a fit for every company. Other types of Recruiters found in our industry work through:

  • Contingency models: this "no commitment relationship" goes both ways. You don't owe them money, and they don't owe you a hire.
  • Horizontal executive firms: they focus on C-level hires across all industries: manufacturing, banking, and pharma; they are process driven.
  • Generalists: they partner with tech companies to recruit across all functions and tend to focus on individual contributors as they are not highly specialized.
  • Tech firms: they focus on the engineering side of the organization and the functions that report to the CTO.
  • Offshore recruitment: focus on contractors and volume recruiting of tech resources located in offshore markets.
  • Branded institutions: Adecco, Randstad, Robert Half
  • Individuals: those who, after a career working for a recruiting firm, have hung their shingle and are going it solo. 

If looking for outside help, it is essential to align yourself with a recruitment firm specializing in the current hiring needs of your startup

Place a Premium on the Builder Persona

Whoever you engage to lead your search, or whether you choose to do it in-house, place a premium on builders. A Builder persona will often be flying under the radar, working for companies that are not well-known. 

They are effective at "standing up" a product or business function and comfortable working in risky "can't fail" scenarios. They will be a strategic, hands-on person who likes startups, gets their hands dirty, and understands the relationship necessary between their role and the Founder. They are the persona most likely to flourish in a seed or Series A and generate successful outcomes. 

Hiring is one of the most critical steps for any startup, and the decisions made during the beginning stages will have a never-ending ripple effect on the company's future success.

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