As an early stage deep tech investor, we see it as our duty to support our portfolio companies 360 degrees - especially in the first 6 - 18 months after the investment. We understand that at this stage, you have a small team, maybe even just the founding team, and a lot on your plate. This in fact is our ideal set up and the reason why we only do seed investments - because this is where we can add the most value.
From our 20+ years of experience in building up tech companies and bringing together great, passionate people to create breakthrough innovation, we have learned a lot about what it takes to build up a well-functioning organization and find the right talent to realize even the biggest ideas and visions.
Most of this might not be new to you since there are a lot of best practices out there regarding HR - but it’s our curated list of Top learnings from building up several tech teams, and we want to share it with you.
Get the right people on the bus
This concept from Jim Collins’ book “Good to Great” sums up the number one key learning we’ve taken away from building up and investing in multiple tech companies - Get the right people on the bus first. That way, you’re not only making sure you have the needed skills on board before you head off, but you’re also heading in the right direction. Adding valuable knowledge, experience and input to your driver seats can be crucial and having a fresh pair of eyes take a look at your roadmap may give you very important impulses that can have a huge impact down the road. Besides that, the most talented people - the ones you’ll want on your team - are much more likely to stay if they get a say in where they’re heading with their professional lives as well. Of course, this doesn’t mean that you should hand off certain responsibilities in your company completely. At Freigeist, everyone has their own fields of expertise, but in the end we always come together and take a look at challenges from all angles, to be able to make the most profound decisions. This is what you should establish in your company - a strong leadership team in which everyone covers different areas, with an open exchange of thoughts and a willingness to listen to different points of view.
As a founder, you are likely to feel very confident about your vision and that you have it all figured out already. But it’s a hard fact that no one can deliver 100% on every single area of growing a business. Having a strong leadership team with diverse backgrounds and different key competencies is always the right way to go. This includes diversity in gender and nationality, as well as in seniority and expert fields. Which brings me to my next point.
Know your strengths and weaknesses
Don’t try to do it all on your own. Understand your key strengths and weaknesses and make sure to put your time and energy into the areas where you can generate the most value. As your company is growing, you won’t have the capacity to cover every single field. So instead of doing a bit of everything, you should focus on your strengths and let other key hires fill in with their expertise. Because having the right people in the right seats also means making room for them. Finding your place and your responsibilities in the company as it is growing, when you used to be in charge of everything, can be challenging, but being a founder is always about making the right decisions for the company’s good.
We will help you analyze your strengths and weaknesses and support you in filling in the blanks, first with our own team, then by hiring the right people at the right time.
Establish a strong “HR muscle”
In order to get an overview of the key hires that need to be made in the foreseeable future and the liquidity that is needed to make those key hires, we always advise our portfolio companies to develop a Hiring Plan. It’s always a good idea to start looking for talent early. Finding the right people can take time, and you don’t want to be looking for a Head of Sales 2 weeks prior to your Go-To-Market. Understand that things will always be hectic and there will never be extra time to focus on HR - you have to make it a priority, which is crucial if you want to build a successful company.
Building a strong HR muscle can either mean hiring an HR manager full-time, or finding an interim talent manager or agency to work with for the first key hires. This depends on the stage of your product, or more precisely, whether you’ve found your product-market-fit yet. Because prior to finding your product-market-fit, you’re likely to only make a few key hires which could be done by an interim HR manager, or by leveraging your own network. But once you’re at an early growth phase and the demand from customers is increasing, building up a proper HR organization is an essential driver of success. It’s not just the scouting and hiring process, but onboarding, career development, training, employee happiness and so on. The importance of HR is often underestimated, which is why we support our portfolio companies first hand in setting up the right HR organization.
Present your vision as an employer
Another important learning we’ve taken away from accompanying countless recruitment processes in the past years is how important it is to establish a company culture and vision early on. Especially at an early stage, you have to be very good at sharing your vision and sparking other people’s excitement about it. As a young startup without a track record or a lot of funding, you’re basically a blank paper. Why would key hires leave their well-paid, safe jobs unless they see an opportunity and are just as excited about your vision as you are?
A good way to start out is by setting up a professional company website, and an about page, that gives potential employees an idea of the culture, values, benefits and the vision of your company. In the beginning, most of the recruiting will happen through active search - either by you, a headhunter or an HR manager. At a certain point, however, you can save a lot of time by investing in employer branding and presenting a company that people will want to work for, so that the talent will come to you directly. We’ve talked more about the importance of branding in our article on Brand & Product.
This all ties back to our first point of getting the right people on the bus - if you can get the right people excited about your vision early on and present them an opportunity to grow together with your company, to be part of something big and to lead the company to success together with you - you will have a very strong and powerful organization that can take you anywhere.