Properly onboarding new team members not only increases morale in new hires and increases team fit, but also yields better productivity in the team more quickly than an unstructured process.

Careful planning and thought, as well as company size- and stage-tailored methods, are prerequisites, and adaptation and constant evolution in concurrence with the hiring speed and the organization’s over-time structural changes should also be front of mind. Lastly, you need to differentiate between two main types of onboarding: 1) onboarding into your company and 2) onboarding into a team within your company.

To help illustrate how to think about onboarding, I’ve broken the process of building an onboarding workflow down into several blocks: which provide the creative freedom to come up with and evolve an onboarding plan that works for your company. I like to think of them as ‘blocks’ — similar to lego blocks — because broken out as such gives you flexibility on how to deliver and evolve them. How you execute and layer these blocks largely comes down to your company’s culture and the time availability of people that are of significance for the onboarding experience you want to deliver. For example, on this latter point, it is famously shared that Jack Dorsey (co-founder of Twitter and Square) used to personally onboard new employees with a walk where he would share his thoughts on the company’s vision and values, could someone else have done this as effectively? It’s up to you to judge for your own org, hire, and circumstances.

The blocks I highlight below are a mix of operational and cultural elements, they can be intermingled, layered, or done in whichever order you desire, but naturally some make more sense before others (unless you have a reason to do so). Also, you (the founder or leader) don’t have to be the sole architect of these blocks; other colleagues can be the authors of these blocks as well, shaping them as they see fit of the sub-cultures that might exist within their functions or divisions (e.g. tech teams tend to have their own sub cultures). Ensure, however, that any sub-culture still adheres to the values of your organisation — you don’t want to be encouraging factions!

Below are the ‘post offer’ onboarding blocks (once you’ve already thought through and delivered the offer or contract verbally or over more formal communication, and the candidate has accepted it) and their descriptions. Try to think of the list below as building blocks in a process you and your colleagues can create and make into a repeatable process (if more than one hire), specific to the role and circumstance of the new hire rather than a prescriptive sequence.

The technical/asset onboarding block — A seemingly simple, but important one, where you provide the new hire with anything as small as their new ‘badge’ to something more substantial like their new computer, login passwords, access to the intranet, etc. This block can be separate from the onboarding of HR-related matters (i.e. policies) as I will highlight later below. This block can feel very disorienting to a new hire who might have had different tech tools and processes in their previous role, so give it the right time and patience. It will likely vary if the hire is remote vs. in person, so you should think about unique experiences therein. It’s not necessarily the first block you should do if, for example, you want to highlight key risk factors of working in your organisation first (e.g. safety or regulatory requirements).

The cultural/values onboarding block — This is one where leadership (of some sort, be it divisional or higher up) takes the time to walk through what it is like to work with others in the organisation, what might be expected of them to get along with others, walk through the values, the bigger picture and vision, etc. This doesn’t have to be a 1:1 and it can involve multiple leaders if relevant, but the objective is to have the new hire understand the ‘tribal norms’ of your organisation and how they play a part in its success. As part of this chat, you should highlight any meetings or traditions you’d expect them to take part in and their regularity so that they can appreciate their importance.

The colleague onboarding block — Less about explaining the culture and more about showing the culture, this starts with how you introduce the new hire to the rest of the organisation (e.g. via email or otherwise at point of hire), and continues through where the new hire meets your broader set of colleagues over a welcome beer, dinner, lunch, etc. (whatever your thing is). This block is helpful so people don’t feel like a stranger or ‘new person’ forever, and so that a broader group of people know who the new hire is and what they will do. This can be done for a group of new hires, but you should try and keep that group to a small enough size that the broader colleagues can still spend some 1:1 time with each during the welcome.

As part of this block, you can also assign the new hire with a ‘buddy’ that helps them along the way. Pick who will be that buddy carefully, though, as it will require the buddy to dedicate time to the buddy role and properly consider the new hire’s status and/or needs so they don’t feel neglected. If that buddy is regularly absent or doesn’t deliver on expectations when the new hire needs assistance, the whole buddy thing can backfire. In other words, a dysfunctional buddy system is worse than no buddy expectations at all!

The roles and responsibility block — This one is where their direct manager or higher up walks through the org chart, where they sit in the org, who they need to report to whom, and what they will be directly responsible for. Ideally, you make it very clear what success looks like for the new hire and how that affects the org as a whole. You can add, if relevant, a description of how the organization works (eg. how your company makes money and contributes to the larger economy) if the employee may not fully understand how the industry functions (which can be normal for some roles in highly complex industries).

To highlight when this works well, my colleague Gus Curley adds: One legend that emphasizes this point is “during a tour of NASA headquarters in 1961, John F. Kennedy encountered a janitor mopping the floors. “Why are you working so late?” Kennedy asked. “Mr President,” the janitor responded, “I’m helping put a man on the moon.” My analysis is that the Janitor understood how his role contributed to the success of the company. Without the janitor understanding how the engineers work (in that they need a clean workspace to not contaminate their tests which ultimately could put the mission in jeopardy) he might not have cared so much about his own job.

As this anecdote highlights, at the end of walking a colleague through this block, it should be very clear to them what success looks like not only for them, but their team, their managers, and the org as a whole.

Lastly, this block should include a series of expectations for the new hire in terms of where they need to be contributing by certain time points after hire (your choice depending on probation periods as well as how long the training takes for them to be productive, but think of timeframes that make sense (e.g. less than a year)). As part of this you can introduce how the review process will work for your new hire, and how they can also add to your organisation by sharing their feedback on any matter (assuming you have a feedback loop within your org).

The HR policies and benefits block — This block usually generates quite a few questions, even if many were covered as part of the hiring process. It includes things like explaining the ‘work from home’ policy, the holiday policy, the pay scales for the future, etc. It also includes any regulatory and training requirements the employee will need to be able to do the job. So it is worthwhile thinking about when and how to cover these in a way that makes sense in the flow of ‘lego bricks’ above. Too soon, and you can come across as a very policy-driven organization, too late, and questions that might be important to the new hire to plan for their personal needs will be addressed too long after joining your organisation.

Armed with the above blocks, you can build a custom workflow for onboarding based on the needs of your organization. You can also lean in on your company’s leadership to innovate ways on how to customize these blocks; that’s why it is useful to break them out like this, because as the leader, you might want to take some of them on personally, and others, you might see better to delegate.

In the end, there is one simple rule when it comes to onboarding, after you are done with it, does the new hire feel welcome and appreciated, and have clarity on how they can help everyone and themselves succeed. If you’ve achieved that, kudos, you’ve done it well.

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A note on onboarding tools: Alex Lewis, my colleague and Talent Manager within Seedcamp, has also been researching the topic and seen how other companies implement these blocks using widely available tools and resources. In his words:

The blocks above touch on a number of subject areas within People Operations outside of onboarding, such as employee engagement and performance management. Building out your “People tech stack” can help with automating these steps and save you time at scale, manage and house your processes and encourage communication and collaboration across the company. For example, culture and values come across not only in your interactions with employees in person or via internal comms tools like Slack, but also should be documented for easy access by your team members, building an internal wiki using Notion is a popular and easy to scale tool, utilised across much of the ecosystem. Onboarding colleagues and arranging for technical procurement can involve multiple team members coordinating and can be difficult to manage when your time is thin, or you don’t have a dedicated People person. Tools like Donut can automate this process, and send reminders to relevant team members via Slack. Having an HRIS (Human Resources Information System), such as CharlieHR, can be a one stop shop for new employees to access HR policies and internal reviews to keep check on their progress and responsibilities, whilst platforms like Ben can house all of your benefits in one place too.

However, it is important to remember that tools do not replace the importance of one on one interaction, consistency of communication is paramount. Train your team members involved in onboarding to the highest standard possible, ensuring your new employees are continuously receiving the best experience possible with little ambiguity, so they are being set up for success from day zero.

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Over the past 6 months, I’ve witnessed several founder relationships and several inter-company relationships fall apart for one reason: delaying a possibly adversarial conversation that needed to happen. Had these conversations happened in a structured and well thought out way, I’m convinced that the universe of options available would have been much broader than those that came to be when things were too late and too inflamed.

I hate interpersonal conflict as much as I suspect most of you do. The idea that talking through a problem can quickly escalate into a full-blown conflict always daunts me, and in some cases even has paralysed me in the past.

Most well-adjusted people in a startup just want to get along with their colleagues (many of which feel like family), but I’ve experienced the hard way that failing to address an issue early on can have disastrous consequences later. That’s why I learned to have tough chats to address unresolved/underlying tensions that would otherwise result in a much larger conflict down the road.

Tensions exist in any group, whether you like it or not, and particularly in high-growth environments like startups, tensions are a natural part of evolving quickly. Speed of execution & hiring vs. cost management, seniority of external hire vs. promotion from within — are part of these daily trade-offs. If balanced well, these tensions drive growth. But too many unaddressed tensions over time can lead to a company’s downfall. Founders fighting about the business trajectory and unable to resolve underlying tensions is a classic example of how companies are torn apart from within.

So tensions are, in essence, both good and bad. But why do they often end up in a ‘cataclysmic event’? They get out of hand when you repeatedly avoid having the tough chats.

I define ‘tough chats’ as well-prepared/structured conversations with a constructive end in mind, with an openness to hear the other person out and find ways of reconciling differences to move past obstacles. Tough chats are NOT impulsive; they are NOT knee-jerk chats letting someone know how you feel in ‘that instant.’ They include emotions but are not ruled by them.

The ‘toughest’ part in tough chats, I believe, is in that they require effort on your part for them to go well. They are extra tough because you can’t expect the other person to do any of the work in advance (even though you hope they do). There is no way around it. You have to put in effort and preparation for them to be constructive. They require time, energy, and empathy to understand your colleague’s perspective before you approach them and reflect on how you’d like to react to their opposition.

Additionally, you need to decouple your ego from the outcome, see the bigger picture outside of your ‘victory,’ and visualise a positive/constructive result, even if you don’t get your way. Lastly, take the time to outline the essential topics you want to cover to find a resolution to your problems. You can’t get rid of tensions, but you can move aim to move past individual ones and to find a common ground / solutions to the issues.

The more you get into the habit of having tough chats at the individual or organisational level, the more likely you are to transform conflict avoidance into constructive problem solving and personal/business growth… and… the more you will likely avoid the very thing we all fear the most: a tougher chat down the road.

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There are many great books and courses on leadership, self-development, managing small teams, but they all revolve around one key point of evolution: You.

For any progress you expect your organisation or division to make, it begins with you. You have to be willing to change. You have to be willing to evolve. You have to be willing to improve. You have to be willing to reconsider what you thought to be true in light of the changing context you live in, and you have to be willing to learn from those around you.

This isn’t easy. Stagnation is tempting, change is hard.

The reason why it isn’t easy is because, if you are reading this, you are likely a self-starter. To usually start something, a company or product, means you have to put things into motion. YOU have to take actions, YOU have to create processes, systems, products, conversations, and relationships. After many months or years of driving things, this motivation to be the main source of all creation within your organisation/division can become a habit even after that habit is no longer absolutely necessary.

Once your organisation/division starts to grow, if you’ve hired well and created a culture that allows it, your colleagues will be equally capable (if not more) in driving creativity and leadership from within your organisation. This team-driven creativity can include everything from what to do, to how to do it. Your job evolves into creating room to let this flourish. In other words, your creativity evolves into the enablement of creation.

In order to do this effectively though, you need to continue to invest in yourself, it doesn’t just happen on its own. I define ‘investing in yourself’ as a combination of learning from others but equally importantly, taking time to reflect on your actions/reactions on a daily basis. You need to invest in yourself so that you can learn how to balance between when to get involved and when not to. You need to continuously learn on how to catch trends that can become toxic within a division or organisation and know how to manage them so they resolve themselves positively. You need to invest in learning how to communicate more effectively to those within your organisation (above and below you) but also to those outside your organisation; not only to attract more talent, but also to effectively deal with ambiguous circumstances that inevitably arise in any organisation.

Additionally, building a company and hiring people to help you with scaling it requires you to take ownership and stewardship over not only the outcome of the company, but also over the people that make it possible. You can’t do that if you have your head so far up your ass you can’t be challenged by those around you or can’t be approached out of fear of not being listened to, or worse, scolded or ridiculed. We all have feelings, this doesn’t mean you should feel nothing when someone reaches out to you with feedback, but rather your tendency should not be around how you are right, but rather more towards: ‘what can I learn’ from this to help us all improve and be better off?

As I write this, I’m very conscious of where I am on my own personal journey on this topic. I’ve made many mistakes along the way, and likely will make many more. However, I remind myself that yesterday’s failures aren’t an excuse for inaction today, rather they give me a richer context from which to learn.

To share a personal example, for the longest time, we kept many of our organisation-wide decisions centred around the most senior team members, perhaps due to the fear of change or fear of what the output might be. This however, created workflow bottlenecks and stifled ideas from colleagues (rather than creating an idea-discussing context). It was basically a mode of operating that didn’t give freedom to different heads of departments to really think about how to build their respective products for their respective teams and customers. After some tough chats with colleagues where we identified the root cause of the issue, a new org structure was put in place that granted much more freedom to division heads (but with the requisite accountability) to identify key issues, assess their severity, prioritise by impact, and create new products and execute initiatives. This conversion took some getting used to, and some people letting go of some things, but in the end, the outcome has so far been much better than the previous status quo.

As you embark on your own development, if you’d like some resources to start with, here are a few I’ve found helpful in my journey so far:

• The Great CEO Within — A very practical guide to all aspects of company building. A must read.

• The 15 Commitments of Conscious Leadership — A great book that helps you reflect on ‘habits’ you might or might not be engaging in within your organisation or division, and how by changing them you might be able to change your culture and outcomes.

• Extreme Ownership — A good reminder that you can’t have change if no one takes ownership of what’s happened.

• Commit Action — Not a book, but rather an accountability program that operates on a weekly cadence after you’ve reflected on the goals you have for yourself.

The post Why you need to continuously invest in yourself if you want to lead others. appeared first on Carlos Eduardo Espinal.

Blog post written by Seedcamp Venture Partner, Andy Budd, with support from Carlos Espinal, and edited by several guest editors.

Tech founders generally start a company because they have a vision for a new product; a product that will solve some meaningful problem at scale. They’ll set that vision, assemble a team of makers, and help bring that product to life. As such, the founder is almost always the company’s first product leader.

Knowing When to Replace Yourself

In the early stages of a start-up’s life, founders tend to be heavily product focussed. They’ll spend their time exploring user needs, coming up with usage hypotheses, figuring out what features to build next, and testing them out of the market. As a product person myself, it’s a super fun stage, so it’s not surprising that founders want to be driving product decisions for as long as possible.

However being a good CEO involves more than just building a great product. It’s about building a great company around that product. So as the company grows, founders will find themselves having less and less time to devote to product decisions. Instead they find themselves doing a tonne of other things like raising money, hiring teams, setting culture, putting new processes in place, finding customers, cutting deals, and a whole host of other things.

Sometimes this shift in focus can happen quickly. Especially if the company gets early traction or after a large fundraise which necessitates an explosion in hiring. However I often see founders feeling a little reluctant stepping out of this role. While this is totally understandable — the product is their baby after all — founders can quickly become a delivery bottle-neck. When this happens, it’s often time to hire your first product leader.

The Typical First Hire

Often that first product hire is administrative in nature. The CEO still holds the vision and makes most of the decisions. They just need somebody to help deliver that vision. As such, founders are often looking for somebody who can gather requirements (what the founder wants to build), organize workstreams (who’s going to do the work, how are they going to do it, and by when), structure and communicate priorities (creating backlogs, writing user stories, running meetings and feeding back progress), and ensuring the work gets delivered in time and to the right quality (which generally involves a lot of coordination).

There’s a surprising amount of inter-team coordination and document wrangling needed to manage a modern product workflow, and it doesn’t make sense for the founder to do this work. In the “olden days” this would probably have been done by a project manager. In the modern tech world, that first hire is more likely to be a “product manager”.

Trusting your hires

When you look at the characteristics of a good product manager, they tend to be fairly systematic and process oriented. They want to talk to customers to understand what they think. They want to analyze the usage data to understand how customers are actually using the product and whether what they’ve built is working. They want to build up a picture of market trends, come up with their own hypotheses and test them out in the market. They also want to involve other stakeholders like engineering, design, sales and marketing, knowing that those teams will also want input into the road map.

For a busy founder with a strong product vision, all this new process can feel overkill. So there’s a tendency for founders to tell early product managers what they want them to build. However good product managers want to be more than just order takers. Instead they want to be involved in driving — or at the very least informing — the product vision. As such, hiring your first product leader often requires founders to give up a certain degree of control. Something which may not come naturally and may feel both uncomfortable and inefficient.

Letting go of Ownership

If you’ve hired a good product manager and the company is growing at a comfortable rate, founders are often happy to cede control of day-to-day product decisions as it means they can work on the business rather than in the business. Especially areas like partnership deals, fun-raising and customer acquisition. This doesn’t mean they give up owning the product vision, but it does usually mean that they give more control over how that vision is implemented.

Ideally this means giving the product team specific targets (through OKRS or KPI) or areas of focus (through a North Star Framework), rather than telling them what to build next. It also means having product partners who exude a sense of confidence and keep everybody up-to-date with progress, so you’re not constantly chasing folks for updates. So for this new relationship to work there needs to be a high degree of trust.

Where Early Hires go Wrong

Unfortunately the first product hire can easily become a source of tension for the founder and CEO, as they negotiate new boundaries and have a polite quarrel for control. This is especially true if the founder is still driving the vision and wants to be involved in all the details, but lacks the necessary bandwidth.

I often see big culture clashes between founders and product leaders. Founders often have a strong gut feel for what they think is the right approach, and may see research and experimentation and an unnecessary hindrance. By comparison, good product managers have been taught that in order to do a good job they need access to the customer and the ability to run experiments and learn.

As a result you often end up with founders feeling frustrated that their new product partners are bringing in too much process, slowing down or questioning the roadmap (when from the CEOs perspective they feel it’s obvious what needs to happen) and trying to wrest away some of their vision, or worse, drive the product in a different direction. At the same time the new product manager will very likely feel as though they aren’t being given the space to do a good job, or having to manage too many competing inputs, with little actual ownership.

How to avoid the deadlock

Early product hires often lack the political heft to push back on founder expectations, and can find themselves in a really challenging position. In fact I believe product management is one of the hardest jobs in tech as they generally find themselves having to satisfy a bunch of different constituents (founders, sales & marketing, customer, designers & engineer) without having the authority or power to mandate compromise. As such I often see early product managers burn out, and get replaced by more senior execs.

To avoid this drama, you sometimes see other members of the founding team step into the product leadership role instead. Sometimes this will be the CTO/technical co-founder. This is especially true if it’s a very tech heavy product. Other times the lead designer will step up and start owning both design and product.This works especially well if there’s a lot of “interface” to the product.

One of the good things about having co-founders take on the product leadership role is they’re likely to share the CEOs vision, and have built up enough trust to be given the space to execute. However designers and CTOs don’t typically have the operational or administrative experience to execute the role particularly well, so will often bring in a junior product manager to support the operational side of things (ticket writing, backlog management, comms etc) pretty quickly.

Product is a Key Hire

For all of the above reasons, finding the right product leader is super hard. You’re looking for somebody who can work closely and collaboratively with the founders, often having very robust and opinionated discussion, while doing so in a way that doesn’t threaten or undermine the founders vision or sense of control. As such you may find yourself going through several product leaders before you find the right fit, and it’s often as much about the founders own personal learning journey as it is the skills and talent of the product manager.

If you’re going through this process of hiring your first product manager, don’t hesitate to reach out to Andy and he’d love to help. Here are more resources from his website: https://www.andybudd.com/

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With growth being such an important metric for a company post-fundraise, it is of no surprise that one of the very first questions that arises after raising money is how to spend it, both in terms of people but also in customer acquisition.

As most small companies have the founding team acting as the marketing, sales, and product development team, it can be quite tricky to ‘scale’ across any one of those functions. However, the wisdom of having founders’ lead these three things until finding product-market fit is one I believe in and also recommend, mostly because it allows the founding team to be nimble in adapting their marketing strategy, the sales strategy, and the product to match the needs of the customers as per conversations they are having with the customer directly (vs. via an intermediary, who is typically newly hired and desperate to showcase worth, even if not entirely aligned with the company’s PMF context).

In an effort to unpack each of these, we will do a mini-deep dive into these three parts and cover the key things to consider as part of how to best use your newly raised funds.

Starting with Marketing, I sat down with my colleague Natasha Lytton, who is an experienced CMO, Head’s up Seedcamp’s Marketing in addition to leading our Platform. I asked her the typical questions I see asked (or those that sometimes people are too embarrassed to ask) around Marketing.

What is the most misunderstood part of ‘the marketing function’ within a startup?

1. That growth belongs exclusively within the marketing department
2. That one person can cover the whole stack of ‘marketing’ — ie performance and brand
3. That short-term tactics are the wholly grail and that customer acquisition costs (CAC) you achieve today will last forever

When you should be doing marketing vs. someone else?

It really depends on you; your skillset, where you feel most comfortable and what’s going to be the most impactful use of your time. If you have zero marketing experience and know this is going to be a core function in order for your business to grow, I’d be looking to bring someone on to run it asap. I think, as founders, it’s essential you take an active interest in the story of the business, which is essential when it comes to shaping your narrative. Early-stage companies are driven pretty exclusively by the founder so, while you may not necessarily be buying Facebook ads or creating content to help drive SEO, you should be inputting on the story behind the business, defining what sort of legacy you want to leave in the world and thinking about how best to bring that to life.

What should be your first hire, a junior person or a senior person?

I’ve personally always been a fan of hiring people who can grow into roles. However, I think with the market we’re currently in, that’s changing a lot. You used to hire people with relatively little experience (maybe 4–5 years) but who had loads of energy, intellectual curiosity and passion to contribute and learn and grow alongside the business, In the current market, with everyone raising so much more money and expected to grow 100x faster than before, the need for people who’ve ‘been there and done that’ tends to dominate. I’d always be asking:

Will this be a challenge that this person will be ‘excited to do?’ as that will likely determine how willing they are to stick around. I’ve found senior people are more likely to take on roles in very early companies if it’s a different sector/experience for them whereas companies always tend to want to hire people who’ve churned out from competitor businesses, Here I’d add, it’s not essential that someone has direct experience in the sector you’re in for them to be valuable.

Is this person a ‘doer’ and someone who is willing to get their hands dirty

Is this person — be it senior or more junior — someone you feel you’d be able to trust and who can help take you on a journey

As one many a founder starts wondering if the solution to their marketing problem stems from simply hiring a senior marketing person, let’s move on to the core question:

What is a CMO?

Someone who leads the entire marketing function of the organisation. This is the person who should be updating the founder on what marketing is delivering, setting the marketing strategy, working with the CFO to define budgets and reporting (as and when necessary) to key stakeholders — ie investors — on impact.

When should you hire a CMO?

Really depends on the stage of your business. If you’re hiring a CMO and it’s a marketing team of one, you’re not really hiring a CMO. I think a lot of this comes down to titles and how this sits within your organisation as a whole. People are increasingly less willing to give out C level titles pre-Series A (which I think is right). A ‘proper’ CMO should signify someone who is going to come in and own a substantial budget and run a decent sized team. I’d also be looking at bringing someone on when you have significant marketing targets you need the business to hit to help you achieve your core goals.

How should you judge a CMO?

CMOs are one of the quickest roles to churn out as everyone wants to grow, and they want to do it tomorrow. I think a lot of this comes down to setting clear expectations right at the start. With early-stage businesses, a lot will be unknown and so while goals are important, the requirements of the organisation and the individuals within them to flex as the company likely will is also important.

I would personally judge a CMO by:

• Leadership quality
• Founder trust and relationship
• Ability to quickly course correct if something isn’t working
• Ability to create a balance of short and long term strategies and tactics to drive growth while future proofing the brand in the long run

What kind of budget should you discuss with your CMO?

Traditional rule of thumb in consumer marketing is 10% of funding should be spent on marketing. This should then come down as the company scales and as next rounds get bigger.

Do you have any questions you’d like to ask about marketing hiring and creating a marketing function after having recently raised? Feel to ask those questions in the comments section below!

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Working with External Recruiters and Firms

One of the biggest challenges founders are facing more and more is hiring fast and hiring well. To achieve this it isn’t uncommon to both bring a talent function in house, but also, in tandem, to work with external recruitment firms.

Working with these firms isn’t always straightforward however, as many promise you the world and fall short if they aren’t well versed in your industry and key people therein. Additionally, there are a variety of ways to work with recruitment firms and each has their own unique twist to it.

To help decipher this process, I’ve teamed up with our very own Head of Talent, Alex Lewis, to address some of the typical questions that surface when engaging with firms for the first time.

Getting Started:

Planning how best to start recruiting is a bit of a minefield. You have various options from search firms to contingent agency recruiters, to embedded and hiring your own internal recruiter. Each has their own pros and cons, but hopefully these FAQs will shed some light on your chosen path.

When to engage with a recruitment partner is a common question — personally, I’m of the view that initially, founders should do their absolute best to engage with candidates themselves, from getting roles advertised to headhunting through cold outreach and leveraging existing networks. For example, as Haroun from Dala, a Seedcamp company, was looking to hire, he did some cold outreach, and found some great candidates who did respond because (after asking them), they knew he was the decision maker rather than a recruiter who doesn’t know the business as well as the founder.

Once these outreach efforts are exhausted or you are under serious time pressure to scale, then it is best to begin an engagement with an external recruiter or firm.

Picking a Recruiter:

There are a few options you have to consider:

Executive Search Firms

Executive search firms focus on leadership hiring, primarily focusing on Executive (C-Suite), VP or Director level roles. This is a high-quality method of recruiting that consequently tends to have a significant price tag attached to it. Each firm’s methodology will vary, but it is a very detailed process that would tend to include global candidate market mapping, a selection of candidates presented to you for approach, and a rigorous vetting and preliminary interview/assessment prior to them being submitted into your company’s formal process.

They tend to perform advisory roles and will have substantial amounts of research available. Having a relationship with a search firm as a founder is very useful, but they should only be used when you have exhausted your personal network and efforts to fill a role.

Recruitment Agencies

Recruitment Agencies are a dime a dozen but good ones are invaluable. The general difference between a traditional search firm and a recruitment agency are the level of role they typically work. Some recruitment agencies have executive search capabilities but leadership hiring would typically not go higher than a director.

Recruitment agencies will tend to have a selection of consultants with very specific niches. They will have a database of candidates they can contact to fill your role and will do high-level headhunting. The candidates they submit to you will typically be across a few other “clients” and as they work on commission, unless there is a long-term partnership or relationship, they’ll be inclined to favour the client paying them the greatest fee — this will vary though; some agencies are more balanced than others.

Embedded Partners

Embedded talent acquisition/embedded recruitment is a relatively new but very popular model, developed as a more flexible and smaller scale version of an RPO, with a management consultancy approach. They would come in and act as your internal talent team, helping you scale at pace until a time that you build out your own internal function, or exist in support of your existing function at a time of significant scale. Outside of hiring, they would also be able to assist with things like optimising your employer brand and wider people ops initiatives, plus wider research to make you a more effective hiring machine/more attractive employer.

When you know what type of capability you require, track record is important to understand, for example if you’re hiring niché roles ensure the partner you are working with have experience in these roles and are able to prove they have done this through providing case studies, references or showing you candidates they have placed with other businesses, as long as there aren’t confidentiality issues.

What to Expect in Terms of Costs:

This is a tricky one to answer, but with executive search firms, you can expect to pay 25–30% of base salary, or in some cases where the individual is extremely senior, part of the entire first year compensation.

With recruitment agencies anywhere from 15–25% of base salary is the industry norm but this is flexible and often dependent on the volume of hiring being done.

Embedded partners again range anywhere from £8k-£20k per month per consultant/partner, however some pricing structures differ depending on if they take a commission or discounts applied on the number of consultants deployed.

Do I need to pay a retainer or can I simply do it on success?

Search firms often will work on retainer, either as a ⅓ up front, ⅓ on delivery of a qualified shortlist and a ⅓ upon successful completion of the hire, or ⅓ upfront and ⅔ on completion, different firms will have different structures, but the above options are the most typical.

Agencies will take a retainer if it is a larger volume of hires to mitigate the risk of deploying multiple assets to fill the roles, but this also gives you assurance that the firm is deploying consultants to work these roles exclusively for you, so make sure this is in place if they elect to close on retainer.

Embedded partners don’t typically work for a retainer, they may require a security deposit on a minimum length of deployment or will have a “notice period” of x months to roll off to cover loss of earnings.

Can I pay with Equity?

Yes, some search firms, especially the larger firms, have recognised that earlier stage companies are unable to pay their fees, so offer equity exchange contracts for their services. Make sure you understand your cap table thoroughly and speak to your investors (if you have them) before going ahead with this. The percentages should be equivalent to advisory equity circa 0.125–0.5%.

How do I best manage the process once initiated?

This differs by type of firm but you can tailor it to your preference. Search firms will agree on clear deliverables in certain timelines and some even have their own platform where you can monitor progress. Agencies again vary, but you can request weekly updates on stats. With embedded partners, typically you’ll have a weekly meeting and quarterly check-ins.

What outcomes should I expect and by when (quality and speed)?

There are a lot of variables at play here e.g. complexity of role, type of arrangement — but there is an element of opportunity cost when using quality and speed as expectations of success. When you first start working with a new recruitment partner, expect there to be a bit of a bedding in period where they get to understand what you think good looks like, what you expect and get to know you as a founder and a business. After that, you can make sensible judgement, but to assess quality, request data. Number of candidates contacted, spoken to, submitted for first interview and then assess interview funnel efficiency through conversion rate like you would a sales funnel.

What if I need to fire the person they recommended

Terms for this will exist within your contract with your agreed supplier, most will have claw back clauses stating that once you have made the decision to hire the individual, the third parties responsibility has diminished, however often there are refunds available on a step decreased based on x number of weeks of employee service.

What if I need to fire the recruiter?

If there is no retainer in place, again check your contract, but just let them know they are not performing and wish to remove them from the search. Make sure you give good feedback as to why. If there is a retainer in place, you may still owe a % of total fee.

Can I have two recruiters searching for the same candidate or is it a waste of time?

The short answer is yes; however, this doesn’t count for exclusivity arrangements or a retainer, as a retainer usually implies exclusivity. On standard contingency search, it makes sense to employ multiple agencies to represent your roles, especially if there is considerable headcount. If you are concerned about candidate representation, a first come first served rule usually applies, with written confirmation required from the candidate for representation as proof, which can be requested by you if conflict arises.

Hopefully these questions help you get started with the basics of recruitment and shed some light on the whole process!

The post To use Recruiters or To go at it alone, that is the question! appeared first on Carlos Eduardo Espinal.

As a founder, there will come a time when you’ll have to hire someone more senior/experienced than you, whether it be simply a function of age, or experience, it is important to keep in mind that setting up your new colleague for success is critical for you to also get the most out of the relationship and also learn from their experience.

Whilst I’m sure the list below could be much longer, below are five different points that are worth considering when bringing on someone more experienced.

1. Clearly define their roles and responsibilities — One of the biggest causes of friction with you and with others in the organisation will come from role ambiguity. Someone in the organisation is likely already taking leadership roles in what the new hire is going to be doing, so making sure there is a clear handoff is important to not have the new hire feel like they are arguing and/or competing with existing team members on final decisions.
2. Set clear Goals/KPIs and remove KPI ambiguity where it infringes on their performance or the performance of others where they have no authority — Following from the above point, it is equally frustrating for a new hire if they are tasked with items or are given KPIs that rely on others, but don’t have the requisite authority to action things or are in conflict with the KPIs of others.
3. Identify and break down cliques aligned to founders so they don’t have to fight them — As organisations develop, people who have worked together for a long time can develop cliques. This makes it harder for new people to join and become part of the culture. This is likely one of the hardest things to figure out because you should also not ‘break’ the values your company operates with, but you should also try and break down any cliques that prevent people from joining in. For example, if you hire someone who is not athletically minded, and your existing team has a tradition of going rock climbing after work, then you have created a culture that omits that new hire and they will always feel ‘left out’. Just keep track of that and break things down where you can. You should feel like your culture evolves vs. ‘breaks’ as you add new and more diverse team members.
4. Clarify and align on company culture so no issues that stem from wrong tone with customers and suppliers and employees — Sometimes people with experience in other organisations can become ‘institutionalised’ with the way they worked in their previous organisations. This is partially why you might be hiring them, for example, to gain wisdom from how they did things, but with that can also come bad-habits, and you just need to make sure those don’t create friction, particularly when it comes to customer-facing functions. The last thing you want is creating division between you and your customers because a new hire treats them differently than you did.
5. Catch up early and often and break down walls that you identify that prevent them from achieving what you set them out to do — Because someone is more experienced than you, doesn’t mean that they will get things right all the time. In other words, don’t just leave them to ‘crack on’ because they might know what they are doing. Make sure you (and they) have the bandwidth to try what they need to try (and possibly fail), and as long as that comms bandwidth is there, you’ll be able to make time for the appropriate feedback loop. Lastly, keep in mind that they, knowing that they were hired for their seniority, may also feel a sense of pride/duty to ‘pretend’ to know what to do because they were hired to do something. Break those barriers down with continued communication so that you can check assumptions.
6. Be careful with titles. It might be tempting to automatically give someone more experienced an inflated title, but keep in mind that might complicate bringing on someone else above them if necessary in the future and/or might give the more experienced person the temptation to intrude into other areas outside of their remit which can further aggravate how other team members feel about role clarity.

None of the above points are rocket science, and yet they are so easy to get wrong and hard to fix retroactively. In the end, sometimes things just don’t work out and you need to let someone go, but at least if you consider the above six points and feel like you’ve done them well, you can rest assured that it might have been the candidate and not you if it ultimately doesn’t work out… but hopefully it does!

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Ok, probably dramatising it a bit here, but now that I have your attention…

Cap Tables are more important than sometimes people give them credit for. They are the ledger of value in the company you’ve built, but they are often neglected and updated last minute or relegated to a lawyer to draft and thus hard to conceptualise and realise the impact decisions such as SAFE’s can have on your ownership long term.

To help you out with not only creating your own cap table, but also modelling out future events, check out the 3-part video series Felix Martinez and I put together to illustrate the most typical fundraising examples. Hope you enjoy them!

Episode 1 — Creating A Cap Table for an Angel Round.

Episode 2 — How to Model a Pre-Seed round with Options.

Episode 3 — How to model a Seed round with SAFEs/ASAs/and Convertible Notes.

The post Your Cap Table is your life! appeared first on Carlos Eduardo Espinal.

This blog post was written in collaboration between Devin Hunt, David Mytton, and the fearless editing of Nelson Casata

I recently caught up with a long time friend, co-founder of Lyst, and Venture Partner at Seedcamp Devin Hunt about his view on the role of Product Manager. What followed was a fun deep dive into the evolving nature of the role, but also an exploration into its relative infancy in terms of what best practices are, and why this makes it challenging for founders looking to hire a PM to know what to look for. This blog post is a summarised and synthesised version of our chat, but hopefully it helps you answer the following questions:

• What is a product manager?
• Where can I meet one?
• When should I hire one?

First, let’s start by defining the role of a Product Manager (PM). A PM is more than just one thing, it’s a role that encompasses several disciplines. To make it simple, I’ve broken out those disciplines into four categories: Product Leadership, Management, Design, and Sales.

Leadership, in the context of being a Product Manager, means making the critical decisions based on your team’s research and the product vision set out by the founder. In our chat, Devin shared that there are two unique streams in building product: developing the product vision, and executing on it, which he calls product operations. Whereas a founder might be hyper critical in setting product vision (at least until they trust the PM), the product operations (think customer development, iterating on ideas, tech requests, etc) still require decision-making leadership.

Typically, the blend of leading product operations and marrying that up with the product vision of the founder is what defines the key leadership attributes of a PM, especially in younger startups.

In effect, the PM will become an arbiter between product vision and product operations. They will have to understand customer development and initially do it jointly with the founders, but later manage what success looks like.

Which brings us to *Management.* Within management, a good PM is able to manage the team that delivers and maintains the product. This ranges from managing the priority stacks from both the engineering and design teams, the customer service requests, and the like. In effect, this is where the core of the confusion sometimes happens around Product Managers being perceived as Project Managers. Clearly there is some overlap, but there is more to the role of a Product Manager, than simple Project Management.

Next, comes *Design*. Whilst some of the best designers in the world don’t have a formal education in design, it helps to have an eye for what is ‘quality’, particularly quality for your customer. The PM needs to know how to calibrate the trade-off between quality of the product shipped vs. the’ speed’ of shipping. The PM needs to be able to understand what good delivery and a good user interface looks like, but doesn’t need to be the one doing it. It’s not uncommon for a PM to start recruiting a design team to support in making those design decisions, and scale those design teams as further funding rounds come. Andy Budd will be publishing a series of deep dives on around design with us at Seedcamp over the next few weeks — stay tuned.

Finally, I added *Sales* as the last ‘wish list’ attribute. Ultimately as much as the title of the book by Daniel Pink is around ‘to sell is human’, I’d argue that to build a product is to build a product around human interactions. I wrote a piece a while ago on the relationship process and product cycle and feel that a PM benefits from understanding what customers need and want and a background in some form of sales can be handy. David Mytton, who we’ve been lucky to have as an EiR with us at Seedcamp for a few years, adds that the commercial element of a PM is largely overlooked: the full go-to-market strategy needs to go alongside product functionalities.

Now… How to find a PM? Well, one of the interesting observations Devin shared with me is that in a human resource constrained ecosystem (think Silicon Valley where lots of the PMs are hired by big tech firms), there have been many lateral hires that have ended up being good product managers with the right level of encouragement. As I explored with Devin what were the key attributes that stood out for a good PM, responsibility, trust, ability to manage and communicate, and organisation stood out as strengths over intrinsic ‘design’ skills or engineering skills, for example. As such, as you reflect on people in your network that could be PMs, don’t overlook ex-sales, ex-engineers, or ex-lawyers if they understand your segment & customer. They could very well be trained to be great PMs for your business.

To conclude, when is the best time to bring in a PM? As soon as you can afford to if you are a commercially minded CEO, and if you’re a technically minded CEO, likely still as soon as you can afford, although you can potentially get away with it for much longer provided you evaluate your role as not preventing you from leading the wider organization effectively.

In the words of David Mytton: The best founder teams have two people, one commercial and one technical. They’re the skills of a PM in two people. I think startups tend to grow the engineering teams out of line with the commercial, though they should be growing together. The PM sits across both. There’s a lot of logistics in customer development in the early days, so seed stage is probably around the right time to gear up those efforts.

On this subject, Alex from Forward Partners wrote in a recent blog post of this very point which I agree with. Read his blog post, it’s quite good.

“Typically a startup’s founder will fill the role of the Product Manager for the first 12 months. This is essential as every good founder should have an intimate knowledge of both their business goals and their customers. However as the founder takes on a more focused role as CEO of the company, she will have less time to manage the product and will instead start prioritising the strategic direction of the business. Constrained by budget and often encouraged to focus on hiring support around technology or growth, she will make do until the startup is at a large enough size that she is able to afford dedicated help with her product. Yet this can often be too late. By the time that your business has secured seed-stage or later funding the foundations of good product thinking (also referred to as having a good “Product Muscle”) should be well and truly in place. This should coincide with the first 12 to 18 months of your product’s lifecycle. Being able to present a deep and meaningful understanding of your customer to investors, along with a story of increased revenue due in large part to adapting the product to better serve your customer base, will go a long way in securing future investment. With this in mind, we believe that a Head of Product should be amongst the first key hires that you make during your first 12 months.”

I’ve put together a list of resources below, in various blog posts, books, podcasts and tools to dive in on further on the topic:

Blogposts:

https://a16z.com/2012/06/15/good-product-managerbad-product-manager/

https://davidmytton.blog/product-managers-are-not-responsible-for-how/

https://www.mindtheproduct.com/

https://blackboxofpm.com/

Books:
Crossing the chasm

Inspired: How to Create Tech Products Customers Love

The Lean Product Playbook: How to Innovate with Minimum Viable Products and Rapid Customer Feedback

Product Roadmaps Relaunched: How to Set Direction While Embracing Uncertainty

Podcasts:

The product podcast (Spotify)
Build with Maggie Crowley (Spotify)

The Saeed Khan Hypothesis: Understanding the State of Your Product, Your Processes, and Your People Sets the Foundation for High-Growth Products (Spotify)

Seedcamp Product Summit:

https://seedcamp.com/product-summit-2021/

The post Do I need a Product Manager? (and when) appeared first on Carlos Eduardo Espinal.

During our recent Seedcamp Founder Summit, we had the honour of having Nicky Moffat CBE kick-off our event with a fire-side chat on leading teams. From Wikipedia, “Brigadier Nicola Patricia Moffat CBE, known as Nicky Moffat, was the highest-ranking woman in the British Army from 2009 until her resignation in 2012.” With her story and experience as a backdrop, we covered what it took to be a leader of small teams scaling all the way to teams in excess of 4,000 (which she herself led, during her last posting in the Army).

Whilst there is no lack of leadership insights to be gathered from fellow tech-leaders, it was interesting to hear the unique challenges Nicky had throughout her career in the Army. In some ways, they paralleled those of any tech company (attracting, training, leading, and retaining key team members) and as could be expected, in many ways they were drastically different. Nicky kindly shared various anecdotes during her chat, which she requested we not share, but what was clear across all of them was the high pressure environment Army officers operate under, the unique challenges she had to overcome within the various roles she held, and the sheer size and scale of the organisation and variety of challenges that can present to any leader. As she shared her stories, three themes for developing leadership within an organisation bubbled up. The three themes were:

• Becoming the Master of Your Brief
• Creating the Context for Leadership (to happen)
• Leaving no Stone Unturned

Becoming the Master of Your Brief:

Before you can lead others, you need to become the master of your domain. Part of leading, is mastering the items you are responsible for, and likely will have others be responsible for down the road. During her chat, Nicky shared difficult anecdotes of her life where she learned the importance of this lesson. In particular, she shared:

• Just as a soldier’s weapon is their body (and thus fitness is something he/she needs to invest in day in and day out), if you’re a knowledge worker, your mind is something you need to invest in daily. You need to stay mentally ‘fit to fight’ throughout your career.
• When you have doubts in an area you are responsible for, you need to double down on it and invest the time to achieve mastery, review all the relevant factors that contribute to that element, and then train until it becomes second nature. Don’t hesitate to gather information from as many sources as possible to achieve this goal.
• Remain curious. It is that curiosity that helps you in understanding what is going well and what isn’t.
• Remain resilient in your quest to master your brief (and yourself). You will have moments where you fail — but you need to pick yourself up again, learn from those mistakes and not let them keep you down.

Creating the Context for Leadership (to happen):

As a leader, you need to create an environment where others can flourish in their leadership. After you’ve mastered your brief, and you find yourself leading others, what you will realise is that not everyone will share your values. Nicky shared her view on how to best align the organisation around a shared vision, but more importantly how to create an environment where others could become leaders within the culture she created. Here are her key points:

• Firstly, start by cataloging the positive values you find in the organisation or those values you want to have that lead the organisation.
• Then, start identifying your traits and those of your early hires (and or existing colleagues) to see how they map to where you want to go.
• Identify the bad apples, as they infect others, and either correct them, or get rid of them
• Set the culture clearly, don’t delay
• Hold people accountable to that culture
• Highlight and promote those that live up to it
• Don’t let walls build up in your organisation, do your best to break them down
• Break down cliques, there are no favoured groups in your success. Spend time with your team equally.
• Make sure all roles are acknowledged as having value if they live up to the culture you set. Don’t let people feel like they aren’t important to the bottom line.
• Set a clear vision for what you want to achieve. Communicate your vision and culture early and often and it’ll pay dividends later.

Leaving no Stone Unturned:

To conclude, Nicky stated the importance of re-visiting your mastery often, polishing what’s necessary, reflecting on what’s missing, and hiring for diversity of thought. Nicky highlighted that diversity in your team begins with a deep exploration of yourself and your weaknesses (gaps), that if left unresolved, your organisation will suffer if not corrected. Additionally, she emphasised that diversity is not only about those attributes that are visible, but also about attributes that are invisible. What’s important is that you hire for diverse ‘thought’ as that’s what will truly give you perspective.

In order to do this:

• Know what kind of leader you are — for example, are you an authoritative team pace setting leader?
• Find someone different from you to balance things out — if you are authoritative, for example, find someone who is more of a democratic affiliate leader. This will provide your team with perspective and balance.
• In effect, find someone that complements you and has their ear to the ground
• Trust them, and be open to their feedback. There is no point in bringing them on board if you are going to simply ignore their input.
• This applies to your entire leadership team, don’t just build your team in your image

In conclusion, whilst Nicky admits that the challenges startup leaders have are different from those that are in the armed forces, her insights into small team and large team leadership dynamics showcase how much there is to learn from common challenges in leading people, and more importantly leading and starting with yourself.

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