The Advice I Give All First-Time Founders

Rob Hayes.

Aaron Patzer had come to a crossroads. He knew he was onto something with Mint–but he realized he couldn’t be a successful CEO and also run product for the company. “He’s one of the very few founders I’ve seen who knew it was time to let go and hand things to someone new,” says First Round partner Rob Hayes, who worked closely with Mint. “He wound up hiring this great guy Aaron Forth, and it helped move the company to the next level. That moment when a CEO gives up their core competency to someone else so they can focus on running the company is the moment they become a great leader.”

Hayes started investing in early-stage startup founders a decade ago, and he always gets the same question: “What should I be doing right now?” Through this experience, he’s narrowed down his answer to three things. Patzer did a brilliant job at all three, and notably the most important thing on the list: Hiring the right people. “The other two are don’t run out of money and always have a North Star,” says Hayes.

While each of these pieces presents a huge challenge, this framework can be very powerful. “Founders who achieve these goals always succeed,” says Hayes, citing Mint’s lucrative sale to Intuit. “If they’re constantly thinking to themselves, ‘Okay, this work is in front of me–am I actively achieving one of these three things?’ they don’t fail.” We recently sat down with Hayes to delve into these three areas of focus and tactics to win at each one.

Hire, hire, hire

Hiring amazing talent is both the most difficult thing a founder will ever do and the most transformative for their business. “If you’re not spending at least 50 percent of your time hiring–and that’s the minimum–you’re already on the road to failure,” says Hayes. Despite this fact, he’s seen dozens of entrepreneurs avoid this responsibility. And it always comes back to bite them. So why delay?

“Hiring people sucks. You spend a ton of time on it that you then can’t spend doing the things that you think need to happen ‘right now.'”

Concentrating on hiring can feel like you’re slamming on the brakes. “Here you are talking to a bunch of people and none of them are good enough. You begin to flounder and feel terrible,” says Hayes. “This is when you make one of two terrible decisions. You hire someone just to get anyone on board, or you decide to spend no time on hiring at all. You think to yourself, ‘No, I can’t do this right now. I have to build product. I have to put out this fire. I have to tend to this customer. But really you’re making a huge mistake.”

Hayes often meets with founders who say they’re putting hiring on pause for one of the above reasons. “The most effective thing I can do in that case is introduce them to other founders who have been through this,” he says. “They’ll have a long conversation about what it actually means to achieve scale–and they’ll be able to see for themselves that growth is all about hiring the people who can give you momentum. It’s true every single time.”

He also advises reluctant founders to start small with hiring–ideally with hires who can take something off their plate that they really shouldn’t be doing. “I’ll say, listen, you need to hire a part-time controller to deal with your finances. They’ll immediately say, ‘No, I’m handling that right now,’ and I’ll say, ‘Okay, so you’re spending at least a couple of hours this week putting together numbers for your board deck. Is that the best use of your time?’ When you put it that way, it’s clear that it isn’t. There’s a finite number of hours in the day that you can work, and only you can decide how to get the most out of them.”

CEOs need to understand that if they spend their time inefficiently, they’re directly costing the company. So what are the things that someone else can do who will not only be better at the work but cost less? “When they finally hire that part-time controller, every founder is like, ‘Wow this is amazing!’ Then they feel good about moving onto harder hiring challenges.”

Hayes advises founders to begin with allocating one whole month to hiring: “In the broader scheme of things, a month isn’t going to kill you. And if you can get the people you need on board and ramped up, three months from now you’ll have a completely different company.”

In addition to hiring being difficult, some founders get nervous about bringing on people who may be more talented than them. This can be a very dangerous line of thinking, Hayes says. You need to realize that surrounding yourself with smart people will only make you look smarter. “A lot of people don’t get this. They say, ‘I can’t hire a product person because what if they take it in a completely different direction than I would?’ And it’s like, ‘Yeah, they might, and that might actually be the best thing for the company.'”

“When you hire amazing people who are better than you at what they do, you look like a genius.”

“I explain this point in terms of leadership–you can’t be a leader without having people around you who you trust to do the right thing. And that means they’re not always going to do it the same way you would. It’s not your job to micromanage them,” Hayes says. “Your job is to get great people and get the best out of them. Even if this makes you uncomfortable, you’ll find that really good things happen.”

If a founder is intimidated or apprehensive about hiring, they need to narrow their focus to the single most important next hire. Think about what is mission critical to the company. “This will probably be some sort of engineer,” says Hayes. “Once you know what you need, spend all of your time hiring that one person. Once founders land someone awesome in a role like this they tend to get into the hiring mode. They see how fast changes start happening and they realize hiring is like an adrenaline shot. So I tell them, just invest the time in making that one hire and see how you feel.”

Hire before you have to.

When Hayes heard that Matt Van Horn was leaving his business development role at Digg, he immediately wanted to connect him with a First Round company. So he introduced him to Dave Morin at Path, whose first reaction was, “I love him, but we don’t need a BD guy for another six months.” But Hayes wouldn’t let it drop. “I told Dave, ‘Look, You’re going to spend longer than you think and find someone whose not as good sometime in the future.’ I’ve seen people in this situation blow past their six month deadline and lose out on potential business.”

When you do the math on an amazing prospective hire, it’s probably worth paying several months of unexpected salary to land incredible talent and jumpstart a part of your business you already know you’ll need. In Van Horn’s case, Morin made the early call and hired him as VP of Business. “When you happen to come across these really good people, don’t let an arbitrary schedule tell you you don’t need them until March of next year. Just get them in the door,” Hayes says. “You’ll get all that time back that you would have spent in the recruiting process too.”

Don’t just hire the best–hire the best people for you. 

“You should only be thinking about whether people are the best for your particular company. Whether they’re the best depends on your culture, your management style, how decisions get made. Are you a bunch of individual contributors? Are you hierarchical? Are you consumer or enterprise? Are you engineering driven? Product driven? Marketing and sales driven? All of these things matter.”

Even once you find someone who fits all this criteria, you may hit roadblocks. Many of the founders Hayes has worked with over the years have come to him with the same line: “They find someone they love, but say, ‘I could never hire that person. They would never come here.'”

“If you don’t think you can convince amazing people to work for your company, you’ve got a much bigger problem.”

“If you really think there’s nothing you could offer an awesomely talented person, then how amazing do you think your company is? You’re basically saying, ‘My company’s not as good as that company,’ or ‘the opportunity that I have here isn’t as good as the opportunity they have there.’ Well then, shit, who would want to come work for you in that case?”

In short, if you can’t convince the people you want that your startup is the best possible opportunity, then you should go find something else to do. A lot of founders get caught up in comparing the package they can provide to compensation elsewhere. But this comes back to finding the right people for you. If someone would rather stick at Google where they have a giant guaranteed income than join a startup with unlimited upside, then they’re not the person you want. You have to let them go.

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