Everything in startups is selling. Selling to financiers. Selling to customers. Even for consumer-facing online services, UI and product design is about selling users on what actions you’d like them to take.
Recruiting new employees is one of the most important selling jobs that a Founder/CEO does in the first couple years of a startup’s life (and subsequently for that matter). But earlier in a startup’s life there exists a real delicate balance in setting expectations for new people joining the company. With recruiting especially, it is important to sell reality amplified, not sell at all costs.
Unlike other constituents where you often have some leeway to sell and then orient your organization to deliver, once you’ve “sold” someone into in organization, they become the organization.
So any miscommunication or disappointment about factors that were or weren’t included in bringing somebody on board are now incorporated into your organization itself. These dimensions of course include roles, responsibilities, and compensation, but also include culture, working-style, and environment. And the smaller and more embryonic the company, the more meaningful an impact that a misalignment can create. The last thing you want is to introduce a new individual into a startup who will soon development resentment about being sold a misaligned permutation of reality, or worse, an empty bag of goods. It’s better to have them not become a part of the organization at all in the first place if only they’d add substantially to it in perfect theoretical circumstances.
While this misalignment can happen at all levels within an organization, the more senior the person joining one, the more the intangible factors matter. This issue is precisely why I’ve seen many instances where the main hang-up with a very early hire is if s/he retroactively receives a Co-Founder title. At the same time it’s both meaningless and ultimately meaningful – it sets the tone for how they’ll be treated moving forward and their role within the company.
For similar reasons, I don’t think it makes sense to ever kick the can with any part of compensation, titling, role, or responsibility “until there is more clarity within the organizational structure.” Of course things change over time – especially in startups – but without clearly defined parameters at the beginning, there more possibility for an incongruent set of expectations and further deviation from both parties’ conceptions of a situation. It surprises me how many times I hear about people being hired into a startup where their tile/role/comp will largely be decided (or promised a real upgrade) after a trial period. What almost always happens is that the new employee has grander expectations about what is to come (if it ever does), and is then trapped into a different job than they thought in their head they were accepting. In most cases these people don’t last long in the company, not because they didn’t have the capacity to execute, but because there was a fundamental breakdown in trust in their ability to do so and be recognized for it.
So when recruiting a new employee, by all means put the best foot forward. But ensure that any assured promises made will indeed come through. Best to amplify the best parts of reality, rather than conjure up alternative versions of it that sound good but just don’t exist.
I am a cofounder and Partner at NextView Ventures, a seed-stage venture capital firm helping Internet founders get their companies off to the best possible start.
David Beisel is a co-founder and Partner at NextView Ventures. He has been focused on early stage Internet startups his entire career, both as an entrepreneur and venture capitalist.
As an investor in the digital media space, David was most recently a Vice President at Venrock and previously a Principal at Masthead Venture Partners. Prior to becoming a venture capitalist, David co-founded Sombasa Media, an e-mail marketing company best known for its flagship product BargainDog. Sombasa was successfully acquired by About.com where David served as Vice President of Marketing.
David holds an MBA from the Stanford Graduate School of Business and an AB in Economics, magna cum laude and Phi Beta Kappa, from Duke University. He also founded and leads the Boston Innovators Group, an organization which holds quarterly entrepreneur events drawing a thousand attendees.