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03. Building a team
Why is HR so painful?!?!
You, trying to hire a team. (Source: Meme generator)
Where to start? First, with the bad.
If you want to grow, no matter what type of business you are, you’re in the HR business. And HR is approximately 1.6 million times harder to do than tech.
No matter how good you think you are at HR, this will be painful.
Why? Because, at the start, it will always be your fault. The key to HR is realising this early, because it is baked into startups from the very beginning — don’t let it kill you. You also need to realise you are the one who has to do it. No one else. Remember: don’t go mad and don’t get mad. It’s going to be your fault. And that’s ok.
This sounds melodramatic, so let me try and provide an anecdote that might resonate.
I once had the person whose business judgment I trusted most come and sit in our office as they were between gigs.
Their feedback was that people liked coming to the office but there needed to be a culture of ‘more excellence and client focus’.
I then had to hit the road. I got a verbal OK on a very big, company-changing contract overseas. We raised a round. Everything looked great.
So I thought I’d try and address this ‘excellence and client focus’ point by talking about how — now that things were going well — we needed to be mindful this was the feedback etc. Then I went travelling again to keep selling (see also: Chapter Two... haha).
When I got back, I had a full staff revolt on my hands, and the person who pushed for more excellence sent me an email telling me my personality had changed and I wasn’t nice or kind any more, and this was — among other things — a failure of strategy. The two colleagues I was personally closest to both used this as a chance to tell me about my (many) personality flaws.
I was not feeling very good about the world at this point.
As part of figuring this out, I called a mate of mine who is very senior at an extremely successful AI startup for our usual half-yearly catch-up. We were doing the preamble chat, I said I’d been on the road and that we’d hit this milestone.
Quick as a flash, he said, “so, did staff revolt while you were away?”.
“Yep”, I answered.
“Then everyone questioned your strategy”, he continued.
“Yep”, I said.
“Ahhh, the usual”, he laughed.
I felt approximately 863% less rubbish. And it made me realise:
Anyway, enough of the cheery stuff! What can you do? This chapter is everything I quasi-figured out along the way — and wish I had at my fingertips before my anecdote above. Don’t be me. Trust me, it is very hard to come back from being told you’re not a nice person. It won’t be fun. (On the plus side, you will undoubtedly have less personality flaws than me).
The go-to reading for this chapter is by , who used to run HR at Stripe. (And yes, taking HR lessons from Stripe is sorta like asking Michael Jordan how to win more, but it never hurts to see how the best did it).
Start with your mission and kumbaya sh*t
First, no matter how painful: have a mission. You may think it’s bullshit. That’s ok. But you need to believe. If not, no one else will.
A mission will save you time, keep your investors happy, help keep your staff from leaving, and above all, save you from endless people asking you what your strategy is. Plus, once you have this in place, you can go out and hire. How? Because it helps you figure out the core of your business. From there, you can slice off various tasks others can do easily.
It also lets you know in your own head if something is bollocks or not. People can see whether you believe the real thing or not.
The problem is that there’s also a lot of bollocks in the opposite direction masquerading as a vision.
You, sharing your mission with the team (Source: GIPHY)
And, above all: your mission can be difficult to figure out.
So make your mission something less bullshit, and something that’s yours.
When to do this is tricky. If we trust our mates at Stripe, you should do it after you can’t fit in a single meeting room. That seems a pretty good start.
Once a company can no longer fit into a single meeting room, it’s time to start writing down your operating system and its component structures. Before this point—when you’re still trying to find product-market fit, for example—it’s too early. There’s no point articulating why you exist 🤔 if you’re still trying to figure out whether you should exist.
Ask yourself if you should exist first (Source: The Simpsons GIPHY)
How? Well, the classic way to do it is to start with your company values ⭐, which form the basis of your culture.
There are a bunch of different buzzwords that will come at you at this point:
Put all of this together and you get a big perfect house 🏠. (OK, OK, maybe just a roof over your head).
Another way to do this is a little more bottom up — think through what you do without thinking about it, or maybe just the things you say waaaaaayyyyy too much, and they can be your values.
For what it’s worth, here are Bilby’s current values:
These are unlikely to make sense to outsiders — which is kinda how we came up with them:
So to recap, having a mission is not bullsh*t.
It makes hiring easier. It makes fundraising pitches much easier. It makes HR easier (as it’s less personal — it’s always better to have someone leave because they want to chase a different mission than because they think you’re a jerk). It also means you can depersonalise stuff from you. And you really, really want to do this.
Finding your team
First up, I want to get something out of the way. Finding people is the easiest, and the most fun part. Walking out of a job interview where you’ve met some mega uber genius, checking their salary expectations and seeing they are in budget, and then thinking through all the things you can now make is FUN.
The hardest question is not in finding them, but knowing you are financially safe enough to hire them 💸. Be aware that this anxiety doesn’t really leave you for a long time. It’s super tricky to know when you should or should not hire. Everyone has an opinion and those giving you their two cents worth aren’t the ones waking up at 2am stressed over money or HR issues.
So: make your decision, and try and make peace with it.
Make sure you have the funds to hire in the first place (Source: Most Expensivest GIPHY)
That said, let’s assume you’re going to take the plunge. Let’s go through some of the methods to find people. I will assume for the sake of argument that your budget will mean using recruiters is not an option. While they have access to wider networks and can actively search for candidates, they cost a lot and they’ll hit 🤛 your inbox hard for many years to come.
When do you hire? When you need it.
But know this: your first hires will probably be hit or miss — Swiss army knives often break in battle, yet broadswords are rubbish at opening wine. Knowing which one to hire when is far more art than science.
At the early stage, you’ll be broadly looking at three types of teams, with all very different types of people, and different needs.
The common denominator: you want people who are comfortable with ambiguity. But also, you want people you can trust. This is very hard, and it changes a lot. So the more you can find people from a background you understand, and the more you can specify what their role will be, the more likely you’ll get the person you want.
Where to find staff
The next thing you need to remember is that the best hire is different at different stages. Given this is a guide for early-stage folk, right now you probably want to maximise for breadth rather than depth. Get the Swiss Army knife. But remember, they will possibly hit limits when you grow, and that is your fault, not theirs. Different times need different types. You will need to help people adapt.
Claire Hughes Johnson called this “scaling to the call”—meaning that as a company grows, the individuals within it are called to lead in larger and more complex roles. Even if a person’s job hasn’t changed, the scope of it has, and the individual must ‘scale to the call’ to maintain their performance and produce results.
This sounds great. For the founder, it’s not always so good — because it is hard to put yourself in the shoes of the person who has just had their job changed on them again. My line is that if you scale, expect them to call ... you out. That’s a good thing when people do. Always better to have the bullets coming from the front rather than the back. And more importantly, it reminds you that with people, we as founders can always do better.
Assessing candidates
Ok, you’ve got folk from your list above. What next? Start with the basics — make a job description you’re happy with. Usefully, LLMs are excellent at writing these. Just plug in some basic biographical information about your company and your answers to the following questions:
Then put in salary and where you want them to work, and you’re ready to go.
How to see if they are good at their job or not is a much harder question. (Note: I will dwell on the tech answer to this with more detail in the next chapter because it is a bit different).
For me, what I look for is some sort of outperformance on something (ie: given X, you seem much better at Y than I would expect). The other thing I look for is that people are broad — ie, they’ve been able to jump around different things.
Note, as per above, this is all very dependent on the phase of your company. Early stage companies need breadth. As you grow, you’ll need more depth. Knowing when to shift is probably going to be a challenge for latter stages; the exception to this is your tech stack. I will write more on this in the next chapter, I promise!
Interviewing for cultural fit
Ok, so you have a rock star. Now, how will they fit in?
Judging this is much more art than science. But something that helps is not to use the interview process to figure out who you want. Start with a hypothesis (i.e., your job description document, see above).
Then cultural fit. If you feel like someone will learn fast and act as part of the team, then usually things can be pivoted.
The best interviews suss out how someone:
Here, the trick is to not get too abstract. Rather, think about how these values fit into what you are trying to make. There’s a Pablo Picasso quote they like to repeat at Stripe:
“When art critics get together, they talk about Form and Structure and Meaning. When painters get together, they talk about where you can buy cheap turpentine 🎨.”
(Note: Once your business is big enough that you can no longer meet every candidate, you have a quality control problem for cultural fit. The pros here recommend . This is sort of a sniff test. I haven’t got to this stage yet. When I do, I’m sure it’ll be awesome :)
Amazon’s Bar Raiser Programme explained
The Bar Raiser program was created to help Amazon hire consistently stellar employees.
Bar Raisers — as described in — are an exclusive group of interviewers who are considered good stewards of Amazon’s standards and culture. One Bar Raiser is included on every interview panel. The Bar Raiser is never from the team for which they’re performing the interview, and they run the equivalent of the hiring committee meeting. They can also single-handedly veto a candidate. Amazon invests heavily in training Bar Raisers to manage hiring decision conversations and to make sure interviewers are holding candidates to a consistently high and objective standard, and it’s viewed as a high honour to be a Bar Raiser at Amazon🎖️.
Onboarding
Recruiting can be expensive, particularly when you’ve gone through the effort of finding good people, and then they turn around and leave because they had a lame onboarding experience. So don’t scrimp here. The better the onboarding, the faster your new team members will be firing on all cylinders.
Follow the base outline below to make sure new hires feel welcome (Source: Brooklyn 99 GIPHY)
Onboarding checklist for new teams
Before Day One: Say “Hi” ✉️
Day One: Make them feel welcome 👋
Week One: Get on the same page 🎯
Month one and beyond: Keep checking in 📞
What to do with your team
OK, you’ve got all these people now working for you. Awesome!
But... now you are starting to grow a little. Or, you’re travelling a little more and the existing staff members don’t get to see you around the coffee machine as much.
That means decisions can’t be made face to face any more. Communication gets complicated because it flows through multiple channels, and trouble often breaks out as everyone outlines their preferred direction.
That usually means you need to find some way to manage people and get them to do what you want. And, as part of that, you suddenly become a manager.
This is emotionally really confusing and confronting. How do you stick it to the boss when, well, you are the boss?
For you, as a founder, this is when your team is likely to be rather unhappy with you. As I said at the start of this chapter, don’t be me. As much as possible, try and fix all of this stuff before it blows up — remember, when it does, you’ll be the one who jumps on the grenade.
How? I’ll outline a couple of possible ways below. But the key to remember is just do your best. Don’t question yourself. Don’t take it personally. Just don’t stop.
How do you make them better at their job?
The first and most obvious way to resolve any HR problems before they happen is to make everyone awesome at their job and get them to win.
That sounds great. Err, how?!?
Here things get a little more interesting. There are two major ideas in the canon of HR as to how to improve your workers.
The first common way is to structure their tasks better and get more buy-in from them. This philosophy was popularized by the famous , whose book is kind of the bible of the Silicon Valley startup HR crew.
As he puts it:
“The output of a manager is the output of the organizational units under his or her supervision or influence.… every hour of your day should be spent increasing the output.”
Under this school, one translates everything important into easily measured terms — and to hold people accountable for these. That allows everyone to know what progress is being made. This so-called OKR system is then used by Microsoft, Google, Amazon, Oracle, etc.
The other approach is a bit more Kumbaya and is more recently popularised by , who argues that:
“A team is a group of people who trust each other... The role of a leader is not to come up with all the great ideas. It’s to create an environment in which great ideas can happen… Leadership is not about being in charge. It’s about taking care of those in your charge.”
In essence, if people have an environment of trust, then they’ll work better.
The problem: these two things don’t always play nicely with each other. Getting work done in an efficient way and building an environment of trust do not always co-exist.
So, perhaps the best way to think about it is to pick your battles.
Very few people like being held accountable; expect to be the bad guy/gal.
The other way to do it is to develop your own model of leadership and management. This at least means you can control yourself — and then you can sort of A/B test which of these models works better for you.
Leading your team
This is by far the trickiest section.
Why? Because whenever someone doesn’t like you, or people think your organisation is heading in the wrong direction, then that will be a “failure of leadership”.
Investors, friendly folk, advisors, etc: they all LOVE talking about leadership. This is often a polite way of saying something isn’t working, and therefore, — as per the first rule of HR — you are the founder, it’s your fault.
The problem is that there are multiple definitions of what leadership is. And there are infinite ways that you as founder are failing right now.
So you can end up in an HR doom loop: something isn’t working → it is going to be your fault that it’s not working → this will be called leadership → then you will start to self-gaslight, thinking you need to be more X or Y or Z. (See above for my anecdote, and be smarter than me).
Fixing this ain’t easy — mainly because it can’t be fixed.
Rather, have faith in yourself. Whatever type of leader and person you are, you have obviously done something right. Trying to be someone or something you’re not so you fit a model of leadership, a thing that by definition has no model, is a mug’s game. Don’t play it. You do you.
That said, there are definitely some useful tricks of the trade.
1. Understand the difference between leadership and management
“Leadership is strategic, and management is more implementation. Leadership is about setting direction, knowing where you want to go, convincing others to go with you, and explaining why you’re going there: setting standards, setting expectations, setting tone. Management is about implementing that: getting the processes right, getting the people right, getting the teams right.”
Technical problems have a solution and an achievable resolution, while adaptive problems are continuously well, adapting. They’re an infinite ♾️ game, if you will.
A technical problem might be that you consistently miss your customer service-level agreement of responding to an inquiry within two hours. An adaptive problem might be how to set product priorities in the face of evolving user needs and increasing competition.
Managers are superb at solving technical problems. But tackling adaptive problems takes leadership. Once you become a great manager, you can get very comfortable. But once you become a true leader, almost every day is uncomfortable. Don’t confuse the two.
Life when you're a great manager, but NOT a leader (Source: gifsboom.net)
“Leadership is disappointing people at a rate they can absorb. Leadership is ultimately about driving change, while management is about creating stability. Stability is important in a work environment, but confronting challenges and realizing new ideas require discomfort. This means that you and your teams must abandon the stable and familiar in favor of an uncertain—but exciting—new direction.”
A rule of thumb that is quite handy here is that more experienced employees require leadership more than management, other way around for less experienced staff.
But vice versa, more experienced employees often look less active and have less energy.
There is possibly a good way to figure out how to choose between experience and energy, to know when to lead rather than manage.
Some of my worst HR mistakes, for example, have been when I have tried to shift someone from a managerial style relationship to a leadership style relationship. This is a very tricky balance.
Remember, just because you think someone should have a different relationship with you, that doesn’t mean they think that. Tread carefully, because you are treading upon dreams.
2. Be the boss, not the cool kid
First, you can't be your team’s friend. It won’t work. Because at some point, you will need to hold people accountable. That will be very painful. They will not be happy with you. They will bitch about you. Some will leave. The more you feel like a friend, the more this will hurt.
When building Bilby, something I screwed up a lot was knowing when to turn the boss switch on or off. Something I still do. That’s partly because I am Australian, and in Australia everyone hates the boss. It is a constitutional entitlement (our Prime Minister once told all bosses to give everyone a day off to drink because we won a sailing race).
"Any boss who sacks anyone for not turning up today is a bum." - Bob Hawke
Don’t do that. There needs to be a boss. That is you. You’re not really being their friend by being their friend.
This doesn’t mean be an asshole. It just means you are always on show (no matter what). Leaders - whether you’re a ridiculously early-stage startup or the CEO of a multinational - do their best communicating when they don’t realise they’re communicating. And more importantly, everyone is always watching you. So, if in doubt, be friendly to everyone, but try not to be their friend.
3. Enable your team
You are not building a cult. (If you are, this probably isn’t the handbook for you).
But to be successful you do need to unite people behind your mission. This is where I defer to the playbook for a few quick wins on how to do this best.
We are not a cult. Make sure your employees have a voice (Source: Xbox GIPHY)
How to get your team on the same page
Feel like you’re herding cats instead of building your startup? You are not alone. In most, if not all cases, you will have a group of high-performing individuals who are great on their own but less so as part of a team. Even more so if they’re remote. As soon as possible, you want to move them from being a team of stars to a star team (see what we did there). There isn’t really a hack to this. You just need to embrace every ounce of your radically transparent being and encourage everyone else to do the same.
Quick wins:
Slow burns:
How to unite your team behind a mission
Once you bring others inside your business, you need to wrap your arms around these people because you’re now building something together. You’re not building YOUR vision (as per above, this is not a cult) 👥, you’re working towards a shared vision. This is where people love pulling out the JFK man on the moon story:
In 1962, President John F. Kennedy visited NASA for the first time. During his tour of the facility, he met a janitor who was carrying a broom down the hallway. The President then casually asked the janitor what he did for NASA, and the janitor replied, “I’m helping put a man on the moon.”
Some love it, others think it’s bullsh*t. Either way, you’ll remember it and that’s all that matters. That doesn’t mean you need to go and tell the cleaner at your co-working space about your startup, but the aim is for everyone on the team to feel part of said team, working towards the same thing.
Quick wins:
Slow burns:
How to lead your team through change
Some people thrive with change and uncertainty; others drown. And most are somewhere in between. As things change — and they will — you need to stay open, even if you don’t have all the answers. Involving your team, helping them feel included, informed and in-the-know is what we’re after.
Quick wins:
Slow burns:
Measuring progress
For each team, you want 1–5 key results per objective that you’re committed to accomplishing in the quarter. Identify which are must-hit goals.
Overall, we should expect to score in the 70–80 percent range over the quarter. A small number of our goals (20–30% for any given team in a quarter) might be hard commitments. These should be marked as “must-hit,” and we expect to reach 95% attainment or more. If these goals are trending behind, we expect to sacrifice other goals in service of hitting them.
Alongside the written review process, you likely have a mechanism to assign employees a performance designation or rating and submit people for promotion to the next job level. If you don’t, I suggest you build one. When I talk to people at companies that don’t have formal performance reviews, I often find that promotion and performance rating processes are still taking place in some form, but they’re happening behind the scenes—often without the knowledge of the person being “reviewed.” If employees discover that this is happening out of sight, it can undermine trust. Instead, your assessment and recognition processes should be transparent, and you should guard against them becoming political and ineffective.
Mentoring, and how much of your time you should devote
“People need two different categories of mentors: One that's three to five years ahead of you who’s doing the job that you want to have next, and a mentor who's much older and has already achieved the level of success you’re after”
Note that you will need a mentor yourself, and it is extremely useful to also find them for other people. But as this is a handbook for founders, I am going to focus on what you might be called upon to do.
Many of your employees, or other related parties, may not directly report to you, but will want to try and learn from how you approach problems.
The key to this is to know when you are acting as the boss, and when you are acting as a mentor.
What’s the difference between these two things? When what you tell them might affect your company and its prospects, you will need either to lead or to manage. But when the situation has little impact on you, then it can be a mentoring relationship.
When you’re mentoring, remember that it’s a very different dynamic:
“As a mentor, I usually try to avoid recommending a solution to a problem, because discussions between mentors and mentees naturally involve information asymmetry and a lack of full context”
Guide your mentees in the right direction without giving them a step by step answer to help them learn (Source: NBC GIPHY)
So what should you do instead?
Here are some of the alternative approaches mentors can explore instead:
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