In his recent book The Hard Thing about Hard Things, venture capitalist and Andreessen Horowitz co-founder Ben Horowitz reminds startup CEOs that their top 3 priorities should be “People. Product. Profit. In that order”.The ability to manage people, somewhat unexpectedly, quickly becomes a critical part of a startup CEO’s success. Scaling a team in the context of rapid growth and traction can be particularly challenging. Not only must the CEO continue to help recruit top talent, he must also simultaneously keep current team members motivated and preserve team culture.
As a mentor for accelerator programs like Next 36, Founder Institute or Founder Fuel, I often meet teams of 2–5 founders looking to make their first hires beyond the founding team upon graduation of the program or after a seed funding round. These first hires are particularly critical, as they will define the culture of the team and be the foundation for future scaling.
Over the past year and half, our startup Busbud has grown from 5 to 35 team members on its way to becoming the leader in online bus travel booking. Last week, we announced a $9M Series A raise which will help us to keep growing the team in the coming months. Our recent growth streak has taught us many valuable HR lessons. Almost everything in our HR playbook has changed since starting three years ago. As the CEO, I consider that one of my main tasks is to develop our HR platform and make sure it evolves with the growth of our business.
Six lessons
Here are few things we’ve learned:
1. Draw an org chart: Org charts are for large boring companies, right? Wrong! At Busbud, we were very late to draw an official org chart and to recognize its value. We wanted to keep the organization as flat and collegial as possible. As such, we were reluctant to formalize teams and trace clear reporting lines. While that may be a valid aim initially, the org chart soon becomes the best tool to manage and plan growth. We have now a “current” version, but also a “projected” version for the following quarter. This allows us to clearly see deltas and focus recruiting efforts in areas of need.
2. Define a detailed hiring process: The best way to avoid impulsive hires is to define your hiring process early on. We made the mistake early on of making some hires without thorough vetting of candidates due to urgency or strong candidate backgrounds, which resulted in some thorny situations down the line. We now have a 5-step hiring process, which includes interview rounds with multiple team members, a technical challenge, reference checking and a social event where any team member can veto prospects.
3. Document your culture and policies: As the team grows, it may harder to communicate to every single team member some aspects of your business, such as processes and policies. At Busbud, we’ve created an “HR Book” for both new hires and current team members. In it, we document our vision, values, culture, compensation strategy, performance review expectations, team dynamics, hiring process, etc. Even though it’s written, the document is dynamic. We treat it as software, with new versions released a few times per year.
4. Invest in on-boarding: A new hire’s first day is one of his most important at your startup. With rapid growth, we’ve made the mistake of not properly introducing a new hire to the whole team and giving him all the tools needed to succeed. While onboarding new hires eventually becomes routine for everyone else, it’s important to make sure a new hire integrates well so he can start contributing as soon as possible. Onboarding can include learning about the business (metrics, values, product roadmap, etc.) and the tech stack (the codebase, current projects, etc.), as well as social integration with the team.
5. Set individual objectives: As your team grows, you’ll want to start cascading company-wide objectives to team and individual levels. This will ensure that every team member wakes up knowing how he can impact the business. It will also help drive better accountability and performance measurement. Google uses quarterly OKRs (Objectives and Key Results) to measure its team members. We’re currently implementing a similar framework at Busbud.
6. Invest in internal communication: When a startup is only the founding team, it’s easy to swivel your chair around and get an update from a co-founder on a key project. As the business scales, steady efforts are required to keep the team in sync. You’ll want to invest in collaboration and chat tools, in addition to your project management tools. You’ll also want to promote frequent 1:1 meetings between your key leaders and team members.
No recipe
Of course, there is no single recipe for scaling teams. The most important thing is probably to be ready to make errors and adjust as you go. At Busbud, my founders and I have decided to be very involved with HR rather than passing this to a dedicated HR manager. In fact, we don’t yet have a full-time HR person. We’ve made some mistakes and could have implemented some processes quicker, but we’ve learned a ton firsthand about what kind of work culture we wanted to build.
HR skills must become a key part of a startup CEO’s swiss army-knife of skills. At a basic level, he should be able to attract and retain talent to make the startup grow. At an expert level, he should also be able to create an HR platform that will accelerate the personal and professional development of his team members. As author Dan Pink has highlighted, the real drivers of motivation at work are autonomy, mastery and purpose.
This is not easy work. That said, when you believe that you are encountering major team scaling issues, you can console yourself that other fast-growing startups experience similar issues. Google has hired almost 50,000 employees since it was founded 15 years ago. That’s about new 13 employees per business day! Also, that number is probably in the 15–20 range when accounting for staff turnover. At that rate of growth, HR scaling needs to be more science than art to keep up with the pace of the business.
Looking to join a fast-growing team with a rapidly improving HR platform? Busbud is currently hiring!
[Note: This article was originally published as a guest post in the Financial Post.]
Photo: Flickr