Expert insights on HR challenges faced by early stage founders from hiring to company culture, title inflation, company composition, and more.

One of the biggest challenges early-stage founders face is how to build their dream team. What roles should you fill first? How do you manage rapid growth? What’s the best way to establish your startup’s company culture?

We asked expert Nora Jenkins Townson, Founder and CEO of Bright + Early, an HR consulting team that specializes in tech startups, for her top tips. Here’s what she shared:

1. Don’t let “HR” be a dirty word

In her experience, Townson says, “one thing I found was always slowing founders down was actually the people side of the business. It seems like sometimes HR is this dirty word when it comes to startups.”

This can be because HR sounds bureaucratic or “boring,” but pushing it aside and not creating a proper people strategy will only hamstring your growth and productivity.

She says HR is best treated like product design, but where the focus is on “designing really amazing places to work. The opportunity you have isn’t just to put a great product out into the world, but to build the company of your dreams as well.”

2. Approach HR with a product mindset

What exactly does this mean? It means treating your team as your first and most important customer. “All of the things that you would apply to product development, or management, or design, you can apply to the HR side,” Townson says.

For example, you can work with personas, do user interviews, or launch MVP (minimum viable product) versions of programs and iterate on them.

3. Customize your people experience early on

Treating HR like product design also allows early stage startups to create a people experience unique to their goals and culture. Don’t fall for the common misconception that HR is a one-size-fits-all set of rules and practices.

“Most people are scared of HR because they think it’s going to be policies or processes that every other company has, but this approach is a way to get something that’s uniquely you so that you’re not just dropping something corporate on top of your culture and ruining it, which is something a lot of founders are scared of,” she says.

The perfect time to do this is when you’re still an early-stage startup, because it’s a lot easier to experiment with and perfect your HR strategy when you’re a team of five or 10 people versus 100 or more.

4. Let go of your legos

So you’ve raised some capital and it’s time to hire––where do you begin? Townson advocates for “letting go of your legos.” She explains that many early stage founders have a “lego” that they hold close and have a difficult time delegating to others. Perhaps this is marketing because they have a history in marketing, or tech because they are heavily invested in product development. However, to do your best job as a founder and leader, you must pass responsibility for this area that’s near and dear to your heart onto others sooner rather than later.

“You need someone really special to fill that role for you, and that can take quite a long time,” says Townson. She adds that if you’re a team of 10 or less, you generally want one of your first big hires to be an executive hire, whether it’s in a key area you’re struggling or your personal lego area.

5. Beware of too many executives

While it’s important to bring on one or two executives to lead key areas, Townson warns early stage startups against over-hiring executives. “If you have more than three executives at a 50-person company, that’s even a little too many.”

“That can be a bit controversial,” she says, “but you don’t want to be executive-heavy and you want to avoid job title inflation. It’s really tempting when you’re hiring your early team to give people titles like ‘head of,’ but usually around the 30-person or Series A mark, a company has outgrown those people. And the problem is when somebody has that ‘head of’ title, it’s really hard to hire above them.”

When hiring and giving titles, remember that your early team isn’t necessarily your later stage team.

6. Define your company culture, then build on top of it

It’s important for early stage startups to define what’s important to their company culture, whether it’s being ultra fast-paced, slow and steady, focused on sustainability, or something else entirely. You must be able to clearly state what your dream culture is, then build your HR practices to grow and nurture it.

“For example, if you want a highly competitive environment or a highly uncompetitive environment, then I would design my interview questions and processes around those values,” she says. “I would design my career path and feedback mechanisms to reward the behaviour that I want.”

Want more tips on how to build your startup dream team? You can watch our full conversation with Townson here.

You can also speak with a RBCx Advisor to learn more about how we can help your business grow.

This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.


Other articles you may be interested in