3 startup leadership hiring mistakes to avoid
Founders should focus on hiring leadership that matches the stage and scale of their startup (i.e. revenue scale, headcount volume), and should avoid title inflation. Here are a few examples of what can happen when leadership hiring isn’t aligned with company stage and scale.
Insight into leadership strategy that matches the stage and scale of your startup
Some of the most common mistakes I see early stage startups make are around poor leadership hiring strategy. If you’re pressed for time — here’s the TLDR:
Founders should focus on hiring leadership that matches the stage and scale of their startup (i.e. revenue scale, headcount volume), and should avoid title inflation. As a rule of thumb, I recommend this:
- Seed stage — hire managers and individual contributors with commensurate experience.
- Series A stage — hire Directors/ “Head of” with commensurate experience.
- Series B stage — hire Vice Presidents with commensurate experience.
- Series C stage — hire C level (e.g. Chief Sales Officer) with commensurate experience.
Here are a few examples of what can happen when leadership hiring isn’t aligned with company stage and scale:
Handing out inflated titles causes change management issues as the company scales.
Many people join startups because they want increased responsibilities. Some candidates also want to advance their career goals with a title bump by moving to a smaller company. This “title bump” desire can be misguided, and lead to problems for the company.
Imagine this; you’re a cofounder, and you have someone in your network who is a solid marketing manager at a late stage tech company. They want to join your Seed stage startup. Their experience is commensurate with manager level, but they want a director title. You really need to fill the role, so you hire the manager level candidate and give them a director title. The hire performs well over the next three quarters, but the company does even better- growing at an impressive rate. You now need a marketing leader with even greater experience; you need a proper director level hire. You have 3 options, none of them are ideal:
- you can demote the marketing manager
- you can fire them
- you can hire a director level hire, but give them a VP title; effectively repeating your mistake and putting off the organization structure issues you’ll inevitably have to deal with