The Shift from Hiring Generalists to Hiring Specialists in a Startup

At inception, the founding team of a startup must be small, but mighty. As the company grows, a shift occurs as the team reaches critical mass, and it becomes feasible to start hiring specialists. Recognizing this new stage of growth is essential.

Wearing Many Hats

One way I think of this process is that, as a founding CEO with a very tiny team of perhaps one to four colleagues, I often think of myself as wearing many hats to cover the myriad of things that the startup needs.  From moment to moment, I will be switching between wearing my Corporate Counsel hat, then my Product Development hat,  then my Patent Attorney hat, then my CFO hat, then my Facilities Manager hat, then my Strategic Marketing hat, then my User Experience Design hat, then my Public Relations hat and frequently my Fundraising hat. There are many more hats, but you get the general idea.

The reality is that I am often only marginally qualified to wear some of these hats, however, one of the significant challenges of founding a company is that, in a small team, one must do the best one can to solve the problems of the moment with the limited resources available. A “good enough for now” answer may well be enough to keep advancing the company’s progress. Over time, my goal is to see how many of my hats I can give away (delegate) to others with greater expertise in a given function than I have. That is the process of gradually growing an organization. And it requires boldness to take on work I may not really know how to do for a while, and ultimately it must transition into humility to actively recruit those who are better than I am to take over as soon as I can afford to.

Yielding A Hat

I vividly remember a moment in Accuri’s rapid commercial scaling process as we were expanding across the globe. I had just hired a new manufacturing head who had tremendous experience, and I already had a dynamite Chief Commercial Officer.  Up until that point, I had determined the day-to-day management of the sales pipeline with the manufacturing capacity to balance the number of instruments we were building with our sales so that we would not over-invest in inventory while still shipping products as rapidly as demand allowed.  My leadership team was meeting in my office when my brand new manufacturing head looked over at my commercial head and declared, “We should be meeting every week to align our production rate with sales.” Neither of them even glanced at me as they began setting a recurring meeting for themselves. In my mind, my first reaction was, “Wait. That is my job. That is what I do.” Then I paused internally and reflected on what a glorious moment this was. It was a chance to give up one of my hats to these two experts who were well-equipped to take ownership of that particular task. I took a deep breath and consciously let go. I mentally blessed their work and turned away to tackle the next problem that only I could handle.

This is just one example of a process that has repeated itself over and over as my companies grow.  I am getting better and faster at recognizing each hat-relinquishing moment and yielding to it. Sometimes I see the opportunity and proactively hire for it. It is essential. CEOs who do not master this process will strangle their company’s growth. Additionally, we have to help our co-founders and leaders do the same.   

Thinking Intentionally About Growing Your Team

When a startup is in its earliest stages, everyone on the team will need to wear many hats to cover all the functions required.  When the startup CEO is building out the initial team to knock down those first few critical milestones, every new team member must bring an array of skills to the table along with a tolerance of the ambiguity and dynamics of an early-stage startup. These considerations must guide whom you recruit to join you at the earliest stages. Each addition must come equipped with a broad set of skills to enable them to wear many hats.

As a company grows from one to five to twenty to fifty people and beyond, the functions that need to be performed can be divided up and increasingly performed by specialists. The challenge for the CEO of the company is to manage the transition through each stage of growth of the company, determining along the way the balance between the plethora of skills in a jack-of-multiple-trades person and the value of deeper specialist expertise.

For any given startup, as CEO, I need to determine what are the critical “special sauce” functions that will enable us to build value at the maximum rate. This evolves somewhat as the company advances through the stages of beginning, product development, initial commercial launch, and then commercial scaling. Inevitably we are constrained by limited resources, and we must decide when it is time to invest in a dedicated full-time lead specialist to do a particular function.  Prioritizing what the critical “special sauce” functions of any given startup is some of the art of building a successful team. Some of the factors that go into such decisions are:

• Judge Carefully When to Commit to Full-Time. Deciding that the time has come to dedicate the resources to hire full-time team members in certain functions demands consideration of whether the startup has grown to the point that there is sufficient work for a full-time effort, whether there are enough resources to make that commitment, and, most importantly, whether this next hire is going to meet the most critical, value-building need the startup has.
  
  
• Focus First on Core Value Functions. Generally speaking, when hiring full-time leaders, one should focus first on the essential business value chain functions such as engineering, manufacturing, sales, and customer service. Usually, most of the full-time specialist staff functions such as human resources, corporate counsel, and public relations can be deferred until the company has achieved some scale (e.g., approaching 50-100 people).
  
  
• Build a Balanced Team. Building a successful startup team requires attending to filling out the required functions in balance with each other. The greatest need will depend in part on the existing strengths of the team. Sometimes the right next full-time hire must be someone who fills a significant gap that the current team is poorly equipped to cover just in time for that function to make a difference.  A typical example would be adding a business development person as the product launch is approaching.
  
  
• Invest in Your “Special Sauce.” Different types of companies will have different areas of emphasis needed when building the team. The “special sauce” of the company is the part that delivers the unique, core value to the company’s customers.  In some companies, this is a unique innovation in a particular technology. In others, this consists of novel business processes that enable special customer experiences. In still others, it is operational excellence at scale. Know where your company’s core value is created and preferentially invest in full-time leaders to build up that capability.

These important hiring decisions require judgment, insight, and taking risks. Likely they rank amongst the most critical decisions that the CEO of a startup must make as we balance budget constraints with building the team needed to succeed. There is no perfect formula. Sometimes you must act when an opportunity presents itself, even if the timing is not exactly what you planned. Inevitably, you must fill roles with human beings who never quite fit the job description – and hope that they bring unique characteristics that will lift the team up in unexpected ways. Good luck! 

Special thanks to Brenda Jones for suggesting the topic for this blog post.