The Controversial First Role to Hire After Your “A Round”

Posted on Oct 28, 2011 | 106 comments


I’ve thought a lot about team construction of early stage companies.

I was once asked on Quora what my idea startup team would be. I wrote the following:

“I like to invest at the seed or A round.  My ideal team is simple:

Assuming 6 people
1. 5 engineers
2. 1 CEO who doubles as head of product management
3. Nothing else

But obviously I am open to other configurations.  The key important things are:
- strong tech DNA
- dominance of tech personnel relative to others
- strong product focus on CEO

I never invest in:
- business people who outsource tech dev to 3rd parties (“to speed up time to market”)”

If you like that feel free to go vote it up on Quora – it fell back a bit in the rankings ;-)

I’m looking to back technology companies so I naturally have this bias and I care deeply about product design, the ability of the team to have a good sense of what is working on the Internet & mobile and thus to make the necessary changes in the market as market conditions change.

You know the old adage (I first heard from Guy Kawasaki) – how much is an Internet company worth? Multiple each engineer x $1 million and subtract each MBA by $1 million and that’s your valuation ;-) As an MBA I can say that.

But what comes after the original team? Who do you hire after you have a product built & shipped and being used in the market? Who do you hire when you raise that first $2-3 million?

My answer will surprise you and I’m sure many will not agree. But I give this advice to nearly every company I work with so at a minimum you’ll know it’s authentic and not intentionally controversial.

Your first hire after that first round of capital is an office manager / company-wide assistant.

“What? You’re joking, right?”

No.

While I’m passionate about being scrappy when you start and controlling your costs, I’m equally passionate about performance when you have a bit of cash. And I’ve seen way too many CEOs / founders get bogged down in minutiae because they were used to it from the scrappy phase. They’ve struggled to scale.

Think about it. Your single most valuable asset in the early days is your senior team and presumably nobody is more valuable than the founding team. And you’re bogged down in expense claims, booking hotel rooms, scheduling meetings, dealing with a leaky toilet, processing payroll, ordering computers, etc.

So what would you look for in an ideal world?

Somebody who:

  • Knows that their job is to be administrative so that they won’t feel like they’re being asked to do a role they feel is “beneath them”
  • Aspires to be more than the CEOs admin
  • Is extraverted and pleasant and has great “bedside manner” with customers, investors, press, recruits, etc. who might be calling
  • Is organized, disciplined & trustworthy
  • Can work with many people. You’re not looking to hire a personal assistant so much as an “office manager” who doesn’t mind helping with coffee, copying, faxing
  • Is numerate and can do some basic data entry, accounts payable, collections, etc, until you’re ready to bring on more accounting staff.

I know that some will say all of these things can be automated and that this is money wasted. I’ve told every startup team I know that when you have your A round done this is your first hire. The number of people who have thanked me has validated my point of view and encouraged me to say it a bit louder.

What have your experiences been?

Image courtesy of Fotolia

  • http://www.mpgstudios.com Jon Lawrence

    This is a really, really helpful post.  As an entrepreneur, sometimes I know I have the proclivity to “do it all myself,” which can definitely detract from from putting the appropriate amount of energy into the things that matter most to helping the business succeed.  

    As my startup looks forward to starting to hire next year, I’m going to take this one to heart and make sure this is one of, if not *the* first hire.  (and I’m kind of checking out hiring a US military vet – some of them might be *great* in this kind of role – they have more info on how to do that at: http://www.dol.gov/vets/aboutvets/mission/mission.htm).

  • http://www.facebook.com/webpromoua webpromo

    Every time I come here I see something very new.Thanks for sharing the information.

  • http://www.pipdigital.com Nancy Dickinson

    I am in the early stages of getting my startup going.  I was just telling my partner I was getting bogged down in minutiae (my exact word!) and that my first hire, after a sales person, was going to be a Guy/Gal Friday.

    If I could have someone I was able to hand stuff to and say, “Please take care of this” I would be much more productive, personally.

  • Robert Thuston

    Suster, I need more of your legitimate knowledge in my life…  I’m committing to visit more reg

  • http://www.metameerkat.com metaMeerKat

    Absolutely! Cannot agree stronger. A company is only as strong as its administration competencies. And being a social innovator (where this is not my strength) I know the value of it…

  • nyckigali

    I like this idea a lot — you do have to find the right person, but having even 10h/week of administrative help can really free up the founders & leadership team’s time to concentrate on big issues.