Building a high-growth business stage one: Hire the best people.
London’s growing importance as a dynamic business hub was reinforced last week as news emerged that the number of entrepreneurs entering the UK on the government’s entrepreneurs’ visa scheme doubled last year.
And, despite a relatively gloomy economic outlook in general, a report from the Boston Consulting Group also showed that the UK has the highest ranking globally when it comes to the internet as a percentage of GDP. We are clearly blazing a (largely unacknowledged) trail in the internet economy, and the opportunity to capitalize on the growth potential is now.
Entrepreneurs have recognized the benefits of building a business in the UK: a central location geographically, access to some of the brightest technology brains in the world, and a growing ecosystem of incubators and funding partners. But with all of the building blocks in place, the key to building a high-growth business still relies on a few basic business principles. The ability to hire the best talent, to grow beyond your home market and to partner with much bigger businesses are three key areas that these entrepreneurs must have on their radar as they go for growth. In this article, I’ll be touching on the first one: hiring the best talent.
Even with the most innovative technology in the world, a business that gets the talent balance wrong will only have limited success. Therein lies the challenge: how does a relatively small business, with limited funds, attract the very best people, often from much bigger businesses, offering lower short-term financial rewards?
The smartest early-stage companies understand the skills gaps they need to fill, and are unemotional about bringing in talent from outside the company to supplement the experience of the founding team. It is critical that founding teams recognise the benefit of identifying and attracting the talent that the company needs to grow. Although start-ups cannot necessarily match incumbent businesses in security or salary, they can offer something much more powerful to talented executives: the chance to build something meaningful.
George Coelho’s three-part guide to mentoring entrepreneurs:
Founding teams need to understand what world class talent looks like in every business discipline, not just in technology. The difference between good and great is all the difference in the world for a start-up and talking to other founders, investors and advisers can help a founding team understand how to find the latter and avoid the former. Great product managers, marketers, finance professionals are every bit as important to a company’s success as brilliant developers or star salespeople.
Possibly the most important role the founding team has is in convincing the new stars to join. This is where the passion for the business, and the potential for growth can trump the safety of a job in a big business. Founders are always selling the dream, to investors, to customers, to partners; use that strength to pitch the business to those people who you most want to join you, and help turn the dream into reality.
Here are my top tips for scouting and hiring the best talent you can find:
Never stop looking:
The most successful businesses identify the future superstars they want to have in the business long before they hire them. Watch what other businesses are doing, and try to spot the real drivers in the business
Avoid tunnel vision:
Although your natural instinct might be to look for outstanding candidates within your competitors, consider looking at completely different, but complementary, industries.
Use your network first:
By far the best way to connect to top talent is to work your network as hard as you can. Approach people who understand you, and your business, and ask them for their own recommendations. Don’t be afraid to tap into the networks of customers, suppliers and investors.
Be crystal clear about what you need:
Once you have identified the skills gaps, define the person you are looking for in as much detail as possible. And include overall, measurable objectives on the job spec.
Finding great people takes time and a lot of hard work. Even if you are tempted to go with someone who ticks nine out of ten boxes don’t do it. If you are truly determined to build a great business, you need to be prepared to go through the pain of getting there.
Particularly for people considering a jump from a much bigger business, the potential risks need to be mitigated right up front. In addition to selling the dream, don’t forget to reinforce the financial backing the company has, and use the positive track record of investors to support your own credibility.
Look for people who want to change the world:
Functional expertise is a good reason to hire someone. But what you ultimately need is people who will buy into your dream of changing the world – and who will then help you get there.
The second part of Davor Hebel’s three-part look at building a high-growth business will be out on 17 April.