10 people challenges startups have to overcome to succeed
From "we back the team above the idea" to "either he goes or I go!", there are endless unsubtle signals telling you it's always all about the people. But in the founder/CEO world of spinning plates, firefighting and other enviable tricks, this message can pass us by. Or those people challenges can feel simply too overwhelming to handle.
Why is that? Not because we are idiots, not committed, or not up to our jobs. It's more likely exactly because we are up to our jobs - high achievers with insane expectations of ourselves and others - that we trust in our improbable ability to focus on money, product, execution, vision, investment, legacy, legals, people, brand and bullshit equally and simultaneously.
And I believe we too often optimistically, if naively, presume others share our own motivations and commitment - along with an ability to read our minds.
People were behind 100% of my 3am fears and 90% of my 4am fears - the "fears" being those mind and gut churning terrors, one symptom of which is the endless replays of conversations yet to be had or which should have been had differently. (The other 10% of my 4am fears being money, which just comes back to people anyway).
So here are my observations why I believe it's all, only and forever be about your people - and how to identify and tackle the challenges that go with that.
1. Onboarding by osmosis
This is not a thing. You cannot successfully onboard and integrate new people by osmosis, nor by sitting them in a corner and telling them to read stuff until they figure it all out by themselves or someone randomly notices that they are there.
Your hard-to-find, expensive-to-hire new employee who has just placed your company at the centre of their world, gets a pretty rubbish message when on their first day they are not placed at the centre of your world. They either drift away to become a directionless renegade, or they quietly wilt away and never deliver on their original promise.
This is a really tough one to get right, not least because you're busy and micro-management is neither desirable nor possible in an early stage company. There is very little scope for overlap of skills and functions, so chances are you are bringing in a person to do a job no one else knows how to do. But that's OK if you take advice and hire well.
What that person is never going to able to do is 'hit the ground running' if you don't show them where the ground is, where they're running to - and why running is even necessary.
As a founder or CEO, I do think you owe it to every one of your new hires to personally sell them the vision - the big why we do what we do, the big who we are and what we care about, and the basic ground rules and context. Then they'll have a decent chance of figuring out how to best do what you brought them in for.
The one week, two week, six week check-ins and 3 month end of probation appraisals are essential. Any niggles that can't be explained by you or your team doing a poor onboarding process, must be tackled within this time frame. Otherwise, they will fester and worsen while depleting your limited resources.
2. Toxic soul destroyers
Beyond simply being all take and no give - toxic soul destroyers can cost you your best people, even your company. At best ruthlessly transactional, at worst psychopathic, these people thrive on games, lies, work avoidance and conflict. Founders who have encountered them, and most eventually do, report that they rarely knew what hit them until too late.
Toxic soul destroyers are more likely very senior as they have learned and refined their craft. And if the individual is really sociopathic, they can be charming to the extent that you (and others) doubt your own judgement.
The most dangerous place to have a toxic soul destroyer is on your board (really hard to remove and they'll probably get you fired first) or as a co-founder (your company is unlikely to get off the ground in the first place, and if it does you'll do all the work while they get all the unearned upside). Remember that not everyone is as nice as you and protect yourself with robust contracts and good hiring/HR processes.
Be aware that this is a real thing and recognise it when you see it. Do not be charmed into skipping process and document everything. Do not go through this alone - talk to mentors, other founders, quietly ask around your network. Then act as fast as you possibly can.
Your moral compass as a company, the very essence of your culture, is determined by the worst behaviour you are prepared to tolerate. That goes bottom up and even more importantly, top down. Just look at Uber.
3. All give no credit
The other extreme is your over-giving, under-appreciated people without whom the business would wither. From the loneliness of the long serving introvert to the emotionally intelligent high performers who don't ask for that promised pay rise because they know you are low on cash - these people never give you grief. They never cause you to wake up at 3am. As a result, it is easy to forget to give them the attention, stimulation and rewards they deserve. You may not even notice as they start to disengage. Do not lose these people through neglect - they are your very best assets.
Make the effort to do informal one to ones with all your people - but especially the non-problematic ones - and give the quiet and modest people the framework to safely boast. An ex-employee of mine said that something I told him changed his life - simply, I'd said I need you to quickly and concisely boast to me about something you have done that improves this business, because if you don't actively tell me about it, how can I possibly know?
Sadly, hard work doesn't earn recognition on its own. Someone has to see and credit that effort for it to have value and to energise the employee and the wider team. I strongly recommend you create a process that surfaces things that deserve credit - I have done "Friday triumphs" where everyone in the company shares an achievement from the week. Find something that works for your quietest people. Your louder ones will talk anyway - don't let them hog others' airtime.
4. You have way more people to worry about than you thought
Unsuccessful interviewees, investors who're not feeling enough love for their money, stressed out clients whose jobs are on the line, the person you accidentally snubbed at a networking event, and the 'someone who knows someone' that saw you looking tired and emotional on a train (or maybe that last one's just me!) There are way more people to worry about than those front of mind in your 3am or 4am fear.
But as I age I find I have fewer f#@*s to give - so it takes prioritisation. This is what I ask myself:
Will this hurt the morale and productivity of my existing people?
Will this affect the likelihood of attracting and retaining new talent?
Will this impact the availability and confidence of the money - whether customer, grants or investor, present or near future?
Beyond that, the desire to fight or to please is a distraction you can't afford. You'll never please everyone anyway, so save your effort for what matters.
5. Yes and!!! vs. No but...
This about encouraging failure, risk taking and openness, versus creating a culture of suspicion and blame. Founders by their very nature tend to be "Yes and!!" types - I certainly am. For us, the struggle is how to focus and how to keep everyone doing the right things in the right order. A general air of semi-coordinated chaos reigns, which may or may not be as bad as it sounds.
At this point, it's tempting to bring in management with experience of process and operations - most likely 'non-start-up' types. And most likely "no but..." types. This inherent conflict can be good, as diversity of thinking is essential. But it takes work, compromise and extreme care - especially at an early stage.
A single "no but..." can kill an idea before it is born. More dangerous, if management turns an open, innovating culture into one where mistakes are punished and people fear taking a risk, then employees leave and you have just 'managed' your young company out of existence.
6. The rockstar, ageing or otherwise
The rockstar (or the magical rainbow unicorn sales person equivalent) is often dropped from above into the company in times of stress, or brought in at key stages of progress at an unprecedented cost to deliver some important transformation. In my personal experience, parachuting in a rockstar very rarely works. Here's why:
Rockstars know their high opinion of themselves has been hard-earned and is fully justified. They believe they are better than everyone else because, well, they are - right? This rarely plays well in a team and is especially toxic if the rockstar implies they are here to fix a mess of that team's doing.
Their practical skills have often aged out, and they are unwilling to learn the basic technologies that the business runs on. They're a bit above all that and have typically got used to people doing the day-to-day basics for them.
Their genuine and impressive skills may simply not be directly relevant, so the expectations of them can rarely be achieved at the same level when applied in a different niche.
Because they either can't or won't roll their sleeves up and execute, productivity can drop significantly - particularly if they engage in unnecessary process change or retooling, to show their impact.
They are very expensive relative to the rest of the team and this causes deep resentment and upward salary cost pressures across the business.
An inflated opinion of their past success often means they do not learn fast and they do not respect their juniors. Like the toxic soul destroyer, they commit the cardinal sins of blame and taking credit for others triumphs.
As you can probably tell, I've seen this one play out in multiple companies. I think a rockstar is almost as damaging as the toxic soul destroyer and probably more expensive.
7 Sorry, did I forget to mention that the goal posts moved?
When you think fast, and when you think about your business at least 18 hours a day, 7 days a week, then in all probability your thinking has got ahead of those around you.
It's easy to find yourself running from meeting to meeting to crisis to meeting, with barely time to eat or pee - yet alone bring your team up to speed. Yet this is the time communication, and more fundamentally reassurance and empathy are essential - especially to those that have the most faith in you. Your internal advocates, the people who keep you most grounded to the vision and plan - those are the people who have to know where your head is going. With your entire team very close behind (once you've applied some focus and filters to your thinking).
Personally, I think it is better to be overly authentically and vulnerably you than to be non-communicative. That means you admit what you don't know, you admit when you screwed up and maybe even you occasionally admit when you're scared. You certainly listen and act if your team say they are confused or scared. The alternative is withdrawal or full-on deception - and no one follows a person that does that. A leader only exists in the eyes of those choosing to follow.
8. If they are the wrong people, you have to let them go fast
Sometimes you hire the wrong person and you know it - they don't have the skills or attitude you thought and you don't have the ability or luxury of time to fix that. It's clear-cut. So act fast, act kindly, be respectful and move on. I have let people go at the one and two week mark and those were absolutely correct decisions. The 3 month probation point is the big one for me - there shouldn't be any major niggles on either side. If a manager is advocating extending probation, it's almost certainly because they want to put off dealing with a person that hasn't worked out, or they have messed up the hiring, for example through an inaccurate role spec.
It's much tougher when the performance issue comes later, particularly when a loyal employee is simply unable to develop at the same pace as of the rest of the team. It is harsh, but in a small company, especially a start-up, the entire company is held back when one person isn't moving forwards at the same pace. You have to act.
You can never ignore an underperformer or problem person and just hope they'll go away on their own. They won't. Worse still, they'll pull down your best performers. It is completely untrue that someone is better than no one. (Or as I once heard it put: "a hole is better than an asshole"). Adding the wrong person to a productive team, or even to a tired/stressed/under-staffed team, will reduce overall performance and morale.
9. The "it's not you, it's me" conversation
Sometimes you have to let people go because the company - more specifically you - screwed up. Maybe you were over ambitious in your plans, maybe you failed spectacularly and miserably. And sometimes you grabbed a great person when you spotted them in the hope the sale/project/grant was just around the corner - then it wasn't.
When it comes to redundancy, that's your bad - not theirs. Be fast, fair, open, respectful - do not protract the process, do not leave doubt, do not give false hope or introduce ambiguity. Support the employees with references and contacts, and help in any way you can. Do it all in one go and do not use redundancy as an excuse to clear out poor performers. Be utterly fair, and look upwards and across the business, as well as to the employee base, as you make those cuts. Go off payroll yourself, if a financial crunch is the cause of the redundancies.
If you're in a small office, you may want to do your planning off site. In my experience, there is never any privacy and never any secrets in a little office. The worse thing for morale is whispers behind doors and half overheard conversations. Do not delegate the task of telling people. Demonstrate leadership, communication and transparency - taking full accountability is critical if you want to maintain respect from the people left behind.
10. How do we keep the vibe and grow the business?
You know those rare moments when there hasn't been a disaster, a trauma, a screw-up or even a hint of a dark cloud? The sun is shining. You're all doing your thing, doing it well and you're happy - this is where you all want to be and world domination is completely inevitable. (Go on, try harder!)
How do you keep the bits that work brilliantly, while also getting the hard work of growth done, especially as you bring in more people and become less hands on? I suggest you encourage your team to call you out and keep you wise to the detail of what is going on. I've had more than one employee tell me when I've been scaring people, for example (a different post!) Brown bag lunches, team stand ups, whatever works for you - but do something that enables two-way vibes to keep flowing.
Pre-empt the problems with good contracts, good HR record keeping and clear accountability and responsibilities. Set clear expectations, and act as soon as those expectations are not kept. You may even want to think about KPIs or OKRs from the outset, rather than later, so they don't feel arbitrarily imposed by others at the growth phase.
Understand the statutory employment rights on both sides. Maintain your appraisal framework. Keep good written records. I have learned this the hard way - as in the expensive mess that happens when you don't. That's why my next business is working on this very issue.
I'm not great with process, but I strongly believe that when it comes to people a clear process and good record keeping has the potential to save your skin, and save your business. With the right people, you can achieve anything. With the right processes as well you will sleep past 3am.