Plunging right in and recruiting a top-notch executive for your startup who has tons of experience working in large companies might seem like a good idea. However, in reality, recruiting candidates without any startup experience can do your business more damage than good.
Taking shortcuts might seem like a good idea to save you time, money and effort, but certain shortcuts can often be detrimental to businesses that are starting out.
Shortcuts Startups Should Avoid
To help startups avoid making potentially damaging shortcut mistakes, Small Business Trends spoke to serial entrepreneur Patric Palm, who now serves as Co-Founder and CEO of Favro. Via email, Palm provided 6 tips for avoiding problems with your startup.
Avoid Recruiting Candidates Without Startup Experience
It’s not unusual for startups to look to recruit experienced executives from big companies to help get themselves off the ground. Such executives can be keen to leave the enterprise scene and work for a hot new startup.
“Unfortunately, these execs have no experience inside an entrepreneurial environment,” warns Patric, advising founders to ensure that the execs they recruit have the right mindset and ability to adapt to the startup space.
Don’t Make the Mistake of Hiring Too Quickly
According to Palm, many scale-ups can grow so quickly that hiring managers forget to analyze what makes a successful teammate.
He advises hiring managers at scale-ups to:
“Slow down and consider the attitudes, skills and values that will make for a reliable and productive teammate in the long run.”
Don’t Attempt to Scale Up Without Automated Onboarding Systems
When a startup is only growing from five to six employees, companies can get by using manual onboarding processes. However, as a startup grows from 5 people to 20 people to 100 people, these manual onboarding processes will no longer suffice.
“Scale-ups must implement an automated onboarding system to increase agility and efficiency,” says Palm.
Avoid Selecting the Wrong Investors
It’s not uncommon for scale-ups experiencing rapid growth to jump the gun when seeking investors. This means, as Patric warns, “they’ll quickly take on funding without stopping to think whether these investors will provide the additional support needed to nurture a startup.”
Don’t Leave Agile Behind
Rapid growth doesn’t mean business operations accelerate to meet the company’s fast expansion.
As Palm notes, when a startup is comprised of only a handful of employees, organizational processes tend to be agile and efficient. But as scale-ups double and triple in size, these processes can easily lose their agility.
“To ensure agility doesn’t get left behind, companies need to have the right tools, people and culture in place,” advises Palm. Refrain from going overboard on expensive solutions.
According to Palm, scale-ups will quickly earn a lot of money and gain customers, making it easy for the c-suite to throw money at expensive tools.
“The problem is that many of these tools don’t scale and will only solve short-term problems — making a company bloated with costly and ineffective solutions,” says Palm.
He gave Uber as an example of this.
“Uber got very far in terms of growth, but is now having issues with cost-efficiency. The point is that while it’s important to grow fast, it’s just as important to build a culture of frugal spending habits,” says Palm.
Are you a small business owner with first-hand experience on some of the pitfalls of taking shortcuts when you’re starting out? We’d love to hear our readers’ startup experiences and tips.
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