Who to Hire

Originally posted on 11/14/19

Collin Gutman is a Co-Founder and Partner at SaaS Ventures, with over a decade of cumulative experience as both an investor and a startup founder. Prior to founding SaaS Ventures, Collin co-founded Acceleprise, the world’s first pure enterprise tech accelerator. Collin also has been an entrepreneur, having founded WorkAmerica, a social impact workforce development startup. Collin holds a BA cum laude from Yale University, and is an avid DC sports fan.

There are two schools of thought when building a startup: hire what you can afford when you need it, or hire the very best fits and most qualified individuals, even if it takes more time. One of these schools isn’t always “right” and the other “wrong,” I think both have a place, and the circumstances of your company may necessitate one strategy or the other — you may lack a certain type of talent in your geography, or you may not have the money to pay top dollar for experienced talent, for example. So I’ve tried to set a general framework for how and when to use both of these approaches, though rarely will these rules be so easy and linear to apply, and exceptions may be more frequent than the rules.

My general philosophy is that you hire what you can afford and hire in a timely manner for individual contributors, but aim high with leadership positions. You can always promote, but can rarely demote, and leadership mis-hires are far more costly than line employee mis-hires. The cost of leaving an account manager or salesperson seat vacant can be far more costly than asking your management team to continue to temporarily fill a VP or C level seat for a few more months.

In the early days of a startup, you likely can’t afford experienced, top tier talent. But your first few hires often want leadership titles. The solution is usually to offer a “manager” or “director” level role, but not a VP or C level role. While it may seem that you don’t have the leverage to do this, I’ve seen more startups get burned from having a “CMO” who is really a marketing manager and being unable to make necessary changes than the other way around. So fill the seats you need filled to execute the business, hire the best that fit in your budget, but above all else — make sure not to leave your organization vulnerable with vacant seats for entry level positions where you’re simply being too picky.

On the leadership side, on the other hand, you’re giving away significant chunks and giving them a significant hand in the success of the business. If you can’t afford to hire a rockstar VP of sales or CMO, don’t make a mediocre hire. Wait until you can afford a top tier one — get by until your next fundraise. You’ve gotten the company this far, you and the other executives can fill the gaps until you have the capital to fill out your management team with top talent.

A+ talent can lead B level talent to victory, but even A’s can’t succeed if they’re being led and managed by B players.