Staff and Other Annoyances
first hires are the most crucial. Don’t screw it up
By Frans M. Coetzee
This is Part 4 in Frans M. Coetzee’s series "Here Be Dragons:
Managing a Tech Start-up," which discusses the pitfalls and glories
of starting up your own tech company.
Once the basic building
blocks for the company are in place, it’s time to bring general staff
on board. These first employees represent the genetic heritage of the
newly birthed company. How they interact will provide a template for future
neuroses. As such, hiring is the most difficult and most critical part
of the start-up. Unfortunately, given the pressures to get started and
the aggressive timelines promised to the VCs, this is also the time when
a lot of companies accost and hire anyone passing by the front door, whatever
their skills may be.
In this piece I offer
some general hiring advice and then focus on the hiring of those members
of staff who tend to cause much of the stress between the technical and
business parts of the company.
In starting out, hire
the very best staff you can find, even if you have to compensate them
highly. At this early stage you cannot cost-cut your company to success.
Do not hire average people; hire the right people for your business.
The first hire is
the most difficult. This person will be the first outsider to make the
jump to a risky position, with no one else’s presence for reassurance.
This person will also set the tone for the rest of staff to come. Expect
landing your first employee to be difficult and unexpectedly time-consuming,
and make the initial deadlines in your business plan somewhat flexible.
If you have no staff, you tend not to meet deliverables. Be aware that
good talent is scarce. For example, there are many programmers out there;
don’t fall into the trap of hiring "script kiddies" who
have only superficial knowledge. In the universe your company inhabits,
only the chosen few can write an operating system.
Make sure that the
other executives understand the differences in quality among your staff
members. In particular, don’t let another company officer pressure
you or any other executive into settling for the wrong person.
Learn to interview
people. Never hire people before you have met and thoroughly grilled
them. And do grill them. Grill them as much as you need to to be sure
your staff is what you want it to be. Never assume or accept reassurances
that someone has a skill until he or she has proven that skill. Be wary
of handing over all authority before the employee has proven him or herself.
This caution applies especially to friends you’re thinking of hiring
and whom you think you know.
Performance in a large
corporate setting is not a guarantee of performance in a start-up, either
for technical or business skills. In a corporate setting, you are living
by the structure set up by past management. In a start-up, you will be
creating the structure from scratch. But although this structure will
be unique to your company, some basic corporate professionalism and understanding
of business rules are critical. If you want to build a $100-million company,
for example, hire people who have worked for five years in a company of
Look for employees
who can grow and learn as the business expands. In particular, beware
of people who deal with their own limited capacity by stultifying the
core product until they understand it. Paradoxically, stultifiers are
usually extremely useful early on in a small company: they often produce
a fast first delivery, but in the long run they will put your feet in
Of course, everyone
with a technical degree is above average–in fact, they will assure
you, they are all prodigies. Unfortunately, skills are acquired only in
conjunction with personality. In true armchair-psychologist fashion, here
are a number of archetypal work styles that are especially deadly to the
new start-up executive.
Never hire someone
who cannot finish a task. The old adage concerning product development
is true: the first 90 percent of the work takes 90 percent of the time;
the other 10 percent takes the other 90 percent of the time. There are
people who always leave the last 10 percent undone. You really, really
do not want a staff member who sees nothing fundamentally wrong with typing
a few "magic commands" to make the software run or who breezily
dismisses problems with phrases such as, "Well, you can just tell
the customer to do the following fix." Sadly, most customers are
not magicians, and they feel that your taking their money makes it incumbent
upon you to make their lives simple.
Treasure people with
a relentless tendency to streamline and improve efficiency. That does
not necessarily mean they optimize performance. You want to see a reduction,
not an increase, in the effort needed to manage existing product functionality
after each phase. Never break this rule when selecting a project leader.
Never hire a "wheelbarrow"–that
is, a person who works only when you are instructing him or her. Progress
will cease as soon as you leave that person’s office. You cannot
watch everyone all the time.
Beware of hiring "yogis."
These staff members meet their deadlines consistently and reliably only
by a sort of Panglossian down-definition ("Where we ended up is where
we were heading, which is where we are–isn’t it great?").
You can identify them early on–their project plans are always out
of date, or they claim to live in a "fluid, ever-changing environment"
that makes planning and detailed specifications impossible.
Finally, beware evangelists
who promote untried technologies without any proof. They may make your
company, but more likely they’ll break it. Verify the claims on all
new technology, especially if you are secretly attracted to it.
As an executive in
the company, you will come across a large number of titled business people:
VPs, SVPs, directors, GMs, and others. A note of explanation to CTOs:
these are the people who used to live in the other buildings on campus
and failed calculus. Despite this grievous limitation, these people have
skills that you, the CTO, frequently do not have, and a successful company
requires a full complement of skills. Unfortunately, the campus divide
does not disappear when everyone joins the workforce. And as a company
executive, you will be a focal point for friction.
Sad to say, I do not
believe bridging the gap between technical and business staff can be fully
accomplished. In the popular culture of business today, both the technical
and business sides wear their respective ignorance as badges of honor.
My advice is to force each side to become marginally competent in the
othe's skills, but to enforce clear guidelines of operation so as
to mitigate the major difficulties in interactions between tech and business
staff. I will touch here on those who will most likely make technical
interaction difficult: the sales and marketing staff and the product managers.
Sales and Marketing
As a technically trained
person, I am tempted to wish a plague on all sales and marketing departments.
But as it happens, the person in business I have had the most respect
for was a marketing genius. And having watched one of our sales associates
skillfully separate a customer from the contents of his wallet, I was
uncharacteristically overcome with a feeling of profound admiration. But
the majority of start-up horror stories involve friction between geeks
and sales. Some notes, which may ease the situation, follow.
Let us naively assume
that the customer knows exactly what he or she wants. But then exactly
what the customer wants you cannot deliver with a generic product. If
you are going to scale your production, you must sell generic products.
Otherwise, you’ll end up being a consultancy. It is still the job
of the sales staff to sell what you have; if they cannot do this, they
are of little use.
since "partnering" with customers and listening to them came
in vogue, salespeople see their task as making the customer happy, not
extracting cash from his pocket at good margin. If the salesperson feels
the custome's pain but not yours, you are skydiving without a parachute.
There has never been
a salesperson who had a bad meeting. Make sure you run a rigorous reality
check on salespeople’s reports on how things are going. Pick up the
phone and find out why–if everything supposedly went well–he
has the custome's pit bull’s teeth in his ankle. Customers
love telling you where you and yours messed up. Often they love it so
much when you seek their insight that you can go back later and resecure
the contract. Customers love vendors they can claim to have turned around.
Finally, never, never,
ever let your staff sell concepts or contracts in advance of an actual
product being developed. This will force a customer request that results
in your having to do a full-blown mock-up, as well as an accelerated delivery.
At some point, sales
and technical staff will seriously drift apart. This separation sets the
stage for that business savior of all business saviors: the product manager.
This is the person who focuses on one product line (usually a line that
is somewhat more mature than the others), collates information, produces
priorities on features, and determines the sales price. A good product
manager is invaluable. Sadly, too often the product manager is a poor
salesperson and a poor technical person, introduced into the company to
allow both sides to defer conflict further down the timeline.
Because of the tendency
in the business world to create dummy managers, never have a person without
experience as a primary product manager. Make sure your project managers
are smart. If the product manager does not have ideas that surprise you
within six months of his tenure with the company or if he cannot tell
you why you are now–or soon will be–better than the competition,
fire him. (If you really have nothing to build a business with, the company
will collapse anyway, and you’ll need the payroll savings to flee
Every product manager
should have plumbed the depths of some technical area, or else he will
drown in every bathtub. A less experienced or superficial manager will
read technical requirements and consider them an a la carte menu.
He or she will order a house with a foundation and a skylight, but with
roof and walls to follow pending funding. Since even the worst product
managers are semifluent in business language and have more technical understanding
than most business people, their credibility will be deemed unimpeachable,
and their opinions will hold sway at the most inopportune moments.
One last note on personnel
is about "toxic" staff members. In particular, the most troublesome
employees are those who create, as a first order of business, a personal
conflict with delivery partners (on the product or development side).
These gladiators, rather than admitting to or dealing with nonperformance
problems, divert attention by plunging into interminable and ultimately
insoluble personality conflicts. New executives are usually totally unprepared
for the extent and severity of these mind games. Unfortunately, my experience
is that if this situation recurs after initial accommodations have been
made, the limb, wherever it is, has to be amputated and the wound cauterized.
Whether you are a
CEO or CTO, expect that nothing will give you more heartburn than interpersonal
relationships with your staff. There are no easy answers.
About the Author
Frans M. Coetzee received
a Ph.D. in electrical engineering in 1995 from Carnegie Mellon University,
in Pittsburgh. In 2000, after stints as a researcher at Siemens and NEC,
he cofounded Certus International SA, a security software company, which
was later acquired by GenuOne Inc. He served as CTO for both companies
through August 2003. He is currently working on Wall Street.