Founders: The hiring strategy that can turn scrappy to stellar
- Making a bad hire can cost founders dearly in both cash and opportunity.
- Bringing industry veterans into a startup that wants to scale often upsets the status quo — but can increase the chances of long-term success.
- Two case studies of team-building — at VMware and DigitalOcean — illustrate the benefits of adding seasoned players to your startup roster.
Not compromising on who you hire can be a struggle at a startup when you have limited funds, and top talent may be skeptical about joining your fledgling company. But making a bad hire can cost more in both cash and opportunity if you have to let someone go and start over again. When I was building VMware’s new East Coast office in Cambridge, Massachusetts, from scratch, I wasn’t just told to hire twenty people, I was told to hire the best twenty people I could get. Despite the pedigree of experienced applicants with degrees from MIT and Stanford, which was de rigueur for hiring practices at tech companies in the early 2000s, our founding CEO Diane Greene would not let me bring on new team members until I had hired a minimum of twenty seasoned industry veterans who were also not jerks; the latter being a very subjective and hard thing to test!
At the time, it was frustrating to say “no” to so many candidates who looked good on paper, but I learned that our first amazing hires ensured our company’s long-term success. This move was the epitome of hiring with a vision for the company that we wanted to be when we grew up. With their expertise, experience, and genuinely good natures, we not only attracted more great talent but also formed a group of leaders and individual contributors (ICs) who set the tone for the whole team. They knew how to mentor junior team members, how to make decisions, and, most importantly, they were great communicators, which is critical for any rapidly growing business. These early team members allowed us to move fast and execute well without lowering the quality bar. Super early startups can benefit from even just one of these team members, even if they are a contractor or advisor.
When I arrived on the scene at DigitalOcean in 2016, I found a culture somewhere between ultra-inclusive and Silicon Valley tech bro meets NYC. Over 50 percent of our workforce worked remotely, and there were many programs to ensure remote workers felt included when we did in-office activities. If we all went to see the new Star Trek film in New York City, we’d encourage remote workers who lived near each other in other cities to go see the film together and send us the bill. On March 14, Pi Day (a classic nerd event for the tech community), we catered a variety of pies into the New York headquarters and sent individual pies to all our remote employees. There was a solid onboarding process for new employees that covered everything from employee benefits to technical overviews of our products, regardless of what role they played in the business. Sammy the Shark was our company mascot, and twice yearly we flew all our remote employees to New York for an all-company Shark Week to bring teams together to learn and connect.
DigitalOcean had grown at light speed in four years. We had around 150 employees, and with a fresh $83 million of cash in the bank from our last fundraise, we were about to double in size. Most of our leadership team had never managed a business this size, and few had ever been team managers. We got some things right, such as our onboarding process and Shark Week, among others, but had to unwind a lot of negative cultural elements that caused strife, such as a wee bit too much partying after hours in the office and a lack of career development programs that resulted in unhealthy leadership practices. Part of the solution for the latter was hiring internal leadership coaches to help develop managers, but there was a lot of work to be done to shift our culture to create a high-performing team.
I oversaw all the engineering, product management, design, and marketing teams (yes, I had marketing too— that’s a different topic). More than half of DigitalOcean’s employees were in my organization, and more than half of those employees had less than five years of experience, with many never having worked in a startup. They were smart, ambitious, good humans that could figure out what to do, but without any prior points of reference, they lacked the necessary seasoning that I had seen at Akamai and VMware that allowed those two companies to move fast and scale. I loved having so many wonderful people on my team, but we just didn’t have the time to get them all up to speed when we were desperately trying to break out of the growth plateau the business was facing. So, taking a cue from Diane’s mandate to me when I first joined VMware, I decided that in this new wave of hiring we would not bring on anyone with less than eight years of experience, and, ideally, at least half of that experience had to be at a startup that had scaled. I was looking for muscle memory and context that my (albeit amazing) team lacked so we could just go.
This move was the epitome of hiring with a vision for the company that we wanted to be when we grew up.
This mandate was not received favorably by many of the employees on my team who felt I thought they were not good enough. They were good, but they just needed colleagues above or next to them that could raise the bar for everyone. I could have done a radical restructuring and rebuilt the team, but we had the runway that allowed us to weave in talent and add leaders, so we went for it. As new hires came on board, it became readily apparent that these talented engineers, product managers, designers, and marketers enhanced the team. I remember one engineering manager coming into my office a few months after the mandate and saying, “You know, I was offended when you told us about the new hiring rule, but now that I am working with these new people, I totally get it. I am learning so much and I am becoming a better leader just by having these role models.” That manager has no idea about the huge sigh of relief I let out after he left my office. It was a big risk to take, but one that got us on track toward an organization that could scale beyond our scrappy early years. It was unfortunate that I had to make the team uncomfortable for a time to get back on the rails, and I hope you can avoid it by getting it right earlier on by setting and holding the bar.
