The Sacred Art of Team Building

You are a person, and chances are high that everyone you add to your team will be a person too. Teams are, of course, made of people which makes building them significantly harder than building products. Great teams will help you overcome difficult challenges, and bad teams can fail to capitalize on even the biggest opportunities.

As your company grows, the kinds of people you hire for your team will change as well. Here are some common phases of a company’s lifecycle and what I recommend looking for in the people you hire:

Pre-funding (1-5 people)

When your team is very small, every single person is critical for success. A single bad actor can distract the rest of your team enough to keep you from even getting started. This is not the time to cut corners, every hire should be amazing and make you feel lucky to have them on your team. Follow 5 Rules for Choosing a Cofounder for all of your hires at this stage.

Who you want:

• The best people you can find. Start by making a list of the 10 best people you have ever worked with in your life and try recruiting them. These should not necessarily be your 10 best friends, but the 10 most productive and passionate people.
• People with complementary skills. You don’t want only engineers or only sales people at this stage. You need a mix of people that will help you move in multiple directions at the same time.
• Generalists who can play many different roles, as you have no idea what you will need to ask them to do.
• Self-motivators. You won’t have time to motivate your team at this point, so everyone should be able to motivate themselves to be as productive as possible. Self motivators are easy to spot since they are constantly doing interesting things in their free time and going above and beyond their job description.

Who you don’t want:

• Specialists who only want to perform one task or duty. These people become a drag quickly as the company evolves and the task they want to perform becomes less important or non-existent.
• People not experienced or not ready for the emotional roller coaster. The early days are intense. And if you hire someone who isn’t ready for the extremes, they will not be happy, and that is dangerous. It is hard to be sure if someone is ready without prior experience, so you should try to focus on people you have seen in action.
• If possible, anyone that isn’t living in the same city. Remote teams at this stage can be done, and done well, but it’s a challenge you should not undertake unless absolutely necessary.

Seed Funded (5-20 people)

Your team is growing, and hopefully, your product is coming together. You should be well on your way to Product/Market Fit, and you need to make sure your team is built to get there. At this point, it is important to be sure you can scale your product and lay the foundation for your business.

Who you want:

• People with experience in your industry or with similar products. These people can help you avoid pitfalls and save you valuable time by not having to learn things the hard way.
• Leaders. The people you hire now will become the leaders in your organization as it grows, so choose wisely. Would you trust the people on your team now to build teams of their own in 12 months? The answer should be yes.
• Life-long students. There will be an amazing amount to learn as your company grows, and you want people who are eager to learn new things and adapt. These people will also be the best at handling the ambiguity of your company’s evolution since they will see it as another learning opportunity.

Who you don’t want:

• People who focus solely on the internal operations of your business. The time for CFOs, admins and other business operations people will come later, but for now, you need to focus all your company’s resources on proving you have a viable business. Over-investing in your operations is a great way to have a well-run company that runs out of money.
• People looking for the next big thing. Once you start to get traction, job hoppers will start to show up, and you will notice them because they have not spent more than a year at their last 3 jobs. These people are not the bedrock you need to build your team upon since they will jump ship the minute a more exciting company comes along.
• Anyone who is set in their ways. If someone justifies their decision making by saying that they have done this a dozen times before, that should be a red flag. No matter how many times you have done something, if you can’t explain why it is a good idea then you are just clinging to the familiar.

Venture Funded (20-50)

You have proven your product appeals to customers. It is time to prove that you can generate revenue and grow. This is both an exciting time but an extremely high risk time. Most companies that survive the very early days will die here.

Who you want:

• CEOs in waiting. You need to have people on your team that you feel could jump into the CEO position if necessary. These people understand the entire business, strategy and market inside and out. They have a great relationship with investors and can provide the support/advice you need on a daily basis.
• Project leads. Gone are the days when you could manage the business yourself, it’s gotten too big. You need people who you can give direction and be absolutely sure that with no further interaction will execute flawlessly.
• Samurai. These are the brilliant individual contributors that wander between the functions of your company solving the most difficult problems. They are more than just firefighters. They are the glue that keeps the company moving forward. In many ways, they are the informal leadership of the company who might not have direct reports, but make sure the gears are turning.

Who you don’t want:

• Trophy executives. These are people you add to your team exclusively because of their pedigree and not because you have a clear need. Your investors will be eager to add executives to your team that have solid resumes and give them peace of mind that the company is in good hands. Hiring people with strong track records is great, but you should have an equally strong reason to hire someone that goes beyond their resume. If the only reason you are hiring someone is because “they were at Facebook,” then you should reconsider.
• Professional middle managers. There will be a time when managing will be a full-time job, but your team isn’t there yet. Hiring middle management too early will add bureaucracy and slow down your execution. Empower your leaders with more responsibility instead of looking outside for management help.

Scaling (50-500)

You have proven your business is viable, and now it’s time to scale that business as large as you can. The question now is whether you can go from $10M to $100M to $1B (and maybe $10B).

Who you want:

• If you don’t already have them, you need a CFO and a finance organization. There will be so much money flowing around that someone needs to keep track of it and make sure it flows in the right direction.
• Entire teams. Growing at this stage is a numbers game, one that is easier to play if you can hire entire teams instead of just individuals. Acqui-hires are one good route, but you can just as easily hire someone and then ask them to refer members of their previous team. Hiring a team all at once accelerates team productivity since they have already worked together, assuming their chemistry matches yours.
• Evangelists. Gone is the time when you know everyone who works at your company, and without significant effort, there will be employees that you will never meet. You need to make sure there are people in your organization that share your passion for the business and can convey that to the people you can’t reach. Those are not always leaders, just team members that are full of passion.

Who you don’t want:

• Distractions. At this stage, many people will try to pull your company into new markets or into new directions. That kind of diversity is just a distraction for you since you need to grow the business you have already. If someone is constantly suggesting drastically new ideas, perhaps they would be better off starting their own company.
• Tons of outsourced/contract employees. The pressure to grow your team will be intense, and outsourcing is always an easy solution. However, unless your company has made outsourcing part of its core operations, the overhead associated with it can overwhelm you. You also need to think of your team as your competitive advantage, so don’t outsource your company’s core competency. That being said, you should consider outsourcing everything that is not your core competency.
• People who refuse to grow with the company. The reality is that not everyone you hired previously will want to grow along with the company. They might have been excellent when you were smaller, but if they cling to the way things were, they will start to hold you back. You will need to part ways with some of these people, but be sure to treat them fairly when you do.

Enterprise (500+)

Enterprise companies are different environments. At this point, your business is growing strong, your organization is in place and you are operating like a big company because you are a big company. Your biggest challenge is continuing to grow despite having less agility and higher costs.

Who you want:

• People who love your industry. You don’t have the promise of being the next big thing since you already are a big thing, so you won’t attract the starry-eyed startup crowd. However, there are plenty of talented people who want stability and love your product/industry. Those people will still see your company as more than a job. They will see it as an opportunity to do what they love.
• Innovators who will drive change from within your company. These are people who have the entrepreneurial spirit but don’t want to go out on their own. They can keep your company from stagnating by pushing you ahead and preventing stagnation.

Who you don’t want:

• People who enjoy playing office politics. These people are usually easy to spot as they talk fluently about product, business and industries but are short on details. When you press into what they accomplished on their own, details are scarce. These people pull down the productivity of your entire company.
• Resume builders. These people are looking for a specific title that seems well beyond their experience. Chances are that they did this their last few jobs as well, so they are well beyond their skill set even with their current level. You should take chances on promising up and comers, but make sure they are the real deal and not the result of years of title inflation.

Team building is an art, not a science, so you will make mistakes. When you do, recognize it quickly and correct the problem immediately since waiting only makes it worse.

How do you know you have built a great team? If you wake up in the morning and realize that your team would do amazing things even if you didn’t go into the office, you are on the right track.

This article was originally published at Sean on Startups, a blog about starting and growing companies.

Reprinted by permission.