On not hiring

 
Not-Hiring-The-American.jpg

Hiring is hard. Not hiring can seem even harder, but often isn't.

At my last company we went from entrance to exit without hiring one employee. I'm now three years into DuckDuckGo, and still haven't hired.

Needless to say, I'm an outlier. So don't take what I say about hiring too seriously, but perhaps I have something useful to say on not hiring.

Most angel pitches I get seem to suggest the use of funds will go to salary, both to the founders and to immediate new hires. The assumption is of course that these new hires will move the company forward, faster.

Yet every time I see that pitch, I look at my own experience and question this assumption. I'd much rather see initial use of funds around figuring out distribution, i.e. testing out different traction verticals. And then once one or more customer acquisition channels are flowing, then hire.

So why do people want to hire so early?

We need to build x, y and z, ASAP. Before you've figured out distribution? What evidence do you have that x, y and z, once built, will make customer acquisition any easier?

Beta customers saying they want things isn't enough. There isn't a good reason to add x, y and z to your product, i.e. complexity, unless you really know it will propel you faster to new customers. Yes, you can never really know, but I see a lot of people who certainly don't know. 

I understand their position, however. They like engineering; they like working on hard problems; they like the idea of running a team. That's great, but it doesn't make it the right business decision.

We need a real designer because we suck at design. Have you really tried yet? Really? Usually not.

I'm not the world's best designer by any means, nor am I "classically trained" in design as they say, but I like my results, and I bring in the big guns when needed as freelancers. I'm sure you can do the same for at least your initial versions.

It just takes time and effort. Yes, that is time and effort you may not want to spend, but do you need to hire a full-time position because you're insecure/lazy/etc.? No.

Instead, lean on the powers of incremental improvement and the Pareto principle (80/20 rule). Spend time each week looking at a specific parts of your design, and iterate on them. It will get better if you put in the time. And then for finishing touches, e.g. nicer images (the last 20%), outsource via 99designs/freelancers/etc.

A corollary to this one is user experience (UX), i.e. interaction design. I agree this is super important. I also still think the founders should be doing it. Again, iterate, based on real feedback from users, and then bring in consultants and tools to give you ideas and polish.

We have too much to do. Any startup can easily grow to fill 100% of your time. That doesn't mean you're spending your time on the right things, or that hiring someone new and filling 100% of their time will increase outcome potential for your startup.

In addition, there are three main problems with hiring.

The wrong person can negatively impact your startup. There are horror stories, but more run of the mill is they're just mediocre or don't have a true startup mentality. Their presence can turn your company more mediocre, and that is not good.

People also tend to underestimate the time it will require post-hiring and post-ramp-up to manage your hire(s). You've just added lots of meetings and other communication channels. Hiring takes a lot of time, both before and after. Your employee will not be inside your head.

And finally, hiring takes money. It increases your burn rate significantly. Companies before product/market fit, i.e. traction, need to stay around long enough until they get it. That can take a lot of time, like years. There are countless cases where companies folded only to miss their moment and see other companies rise up where they might have done so.

One approach I like that some of my portfolio companies are taking is to tie hiring decision points to traction milestones, e.g. once we hit $xK/month in revenue we'll do our next hire. 

The nice things about this approach are that it allows you to a) manage the burn rate issue and b) take a long time to plan your hire. The latter allows you to make sure you're getting the right person in the right position and that they will have a positive impact on the startup. 

Early on it is not entirely clear what that right position will turn out to be. You have a lot of short term needs, but that doesn't mean they should turn into full time positions.

* Photo is courtesy of The American.
I'm the CEO & Founder of DuckDuckGo, the search engine that doesn't track you. More about me.
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