Writing for Business Advice, CEO and co-founder of Crowdcube, Darren Westlake looks at the recruitment considerations startups need to make to build a strong and productive team of staff.
Last year was something of a year of milestones for Crowdcube, but none more so than the additions we made to our team. We welcomed 38 new employees to the company last year, some of whom came from transformational and cutting edge brands like Google and Facebook, as well as more established and traditional financial employers like Goldman Sachs and CitiGroup.
When we started, it was just Luke Lang and myself, as it is with so many small businesses, taking over the spare room, or in our case camping out in a less than salubrious office in downtown Exeter! Every company has to start somewhere.
But in those early days we often don’t think about what sort of team we want to put together, or necessarily how that team will shape the future of the company. Now five years on, Crowdcube has grown to a staff of 77, so perhaps it’s worth sharing some of our own experiences and offering advice from some of our funded businesses on how to build a team to take you from startup to growth.
The first thing is to look at your business and evaluate what the core two or three skills are that you absolutely need to make your company a success. For us it was technology, fundraising and marketing. You then have to make sure that someone in your founding team has those particular skills or areas of expertise – either you, your co-founder or your first hire.
If you’re a sole trader, you need to think about what your skillset is and build your team accordingly. If you’re looking for another co-founder to help grow the business, find someone with complementary skills to yours and that are core to the business.
Tony Pearce at gamesGRABR, who last year raised almost half a million pounds on Crowdcube, which included investment from the London Co-Investment Fund, agrees that you should hire people that reflect the type of company you want to be. He believed you should not rush to hire, but think about the expertise you need and also your budget. “As a startup you want to find the best people out there, but this comes with a price, so think about offering shares for key new members instead of a big salary. If they share in the vision and passion, then most people will except this,” he said.
Andrew Cox, founder of Clear Water Revival, another Crowdcube success story, also advised recruiting people with what he calls “true entrepreneurial spirit”. He believes that while you might have a great candidate on paper, they might not possess qualities essential to a great team, such as self-reliance, optimism, being able to make connections and spot or capitalise on opportunities, and assess risks. These qualities are just as important to a startup than being “good on paper”.
Once the business and team is growing, you want to keep a close eye on where you are paying out substantial fees to professional services suppliers, like accountants, consultants, designers, lawyers, etc and regularly evaluate whether it’s worth diverting these costs to hiring full time people into those roles. This usually works out to be extremely cost effective if you can find someone to do the equivalent quality of work, as they end up being more productive than a supplier.
With all these early hires you need to think carefully about how to reward and remunerate people who will become key to the company as it grows. Often startups cannot afford to pay market rate for these positions so, as Pearce at gamesGRABR suggested, you can offer options (shares which they get at regular intervals as the company grows) to early hires to help incentivise them and help you retain valuable staff.
But before you start offering incentives like shares, you need to get them on board, and to do that you need to sell the hell out of your company. In an interview process it’s not just you evaluating them, they will be doing the same of you and your company, so really sell your vision for the company, what incredible potential it has, how it’s going to change the world and how they can be a part of that.
Laurence Kemball-Cook, founder of a pioneering clean–tech company Pavegen, which raised almost £2m on Crowdcube, also believes you need to find the balance between growth and stability. This can be challenging for small startups, especially if you have to predict product demand over the course of the year and allow your business growth to accommodate.
Kemball-Cook, who now employees 43 staff in the UK and around the world, adds: “You have to grow the business at a steady level, without expanding overheads. With Pavegen, the emphasis is on understanding project demands, as well as hiring a dedicated team that can identify and relate to the ethos of the business.”
Once you have your team, the challenge is to keep them and continue to build the business using the talent that best meets your business needs. As Cox at Clear Water Revival says: “Motivation comes in many forms, and surprisingly it’s mostly not pay related. Make sure people know when they have done a good job and are performing well.”
So in summary, our advice is to consider early what core skills you need for the business now and in the future, recruit wisely, offer incentives like shares in the business (not just big salaries) and continue to motivate your team.
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