The First Five Employees you Should Hire for Your Startup in 2024 (and the 5 You Shouldn’t)

I’ve worked with quite a few early-stage startups (mostly in SaaS) and one of the most basic yet important lessons founders can learn early on is that there is a time and place for most professions. The hard part about building a company is knowing when to hire the right person.

Call me a skeptic, but usually underperformance at these companies usually speaks more to the company than the individual. Especially nowadays, with how hard selling has gotten.

That’s why I thought it’d be a great idea to stop and think about who you should be hiring in this economy? How do you scale correctly?

It varies for most companies, but I think there are a few core hires that every company should invest in both on the technical and non technical side (and a handful you should DEFINITELY avoid).

The Best Hires

1.     Product Developer / Software Engineer – for building an existing product / feature

This one is pretty self-explanatory. If you want to expand your product and deliver features it’s important to be resourced correctly. All too often I hear about overworked development teams, which leads to employee churn or clunky features. One thing every founder needs to realize – great software and product developers are very hard to come by. There’s a huge difference between what is being taught in schools with computer science, and actually building products. And hiring someone who has successfully made the jump requires treating them well.

2.     Technical Leads – when you want to add a big new feature, expand platform significantly

I think it’s important to distinguish technical leads from developers. You can hire a developer to help build a feature that you’ve planned out. But if you’re looking to build out an API service for your platform, integrations with key partners, or other large scale development intiatives – you need to hire someone with experience both managing and developing. And you need to be willing to pay the premium that comes with it.

3.     Account Executive / Account Manager / Business Development Managers – full cycle sellers

If you’re not handling sales yourself, then you need an end-to-end seller. This means they should be responsible for the full sales cycle and receive a part of the pie with successful sales.

Ultimately, if you want to hire talented sellers who know what they’re doing – you can’t just ask them to do cold outreach for you and pass leads over. There are consulting companies that do this, but this is not scalable nor cheap.

Building your sales team from the ground up, with talented individuals, will be the best investment you can make for your business.

4.     Marketing / Community / Growth Manager – an IC who is ideally a leader from the vertical and can build the marketing strategy and support GTM motions as well as building out your initial customer community

I include marketing with community management and growth because you need someone who is willing and able to execute across each domain. Growth will be important when you’re trying to find customers, marketing when they engage with your product/brand, and community management once they are paying customers. Skimping out on any aspect will lead to unnecessary churn and impact conversion so it’s important to hire someone who can execute on this rather than a senior leader.

5.     Sales Leaders – even better if they are from the vertical

There is value to hiring sales leaders early if you need more information around the ICP, vertical, or if the product your selling has an atypical GTM. If you’re selling a CRM – maybe you can follow tried and tested methods but if it’s something more unique, like an Electronic Beehome then maybe you need a different approach.

It’s also important to mention that you should hire a leader who is willing to also try to make sales and lead by example. This is something you should be doing in initial days of your startup, anyway, but if you’re bringing in another leader set this expectation early.

The Worst Hires

1.     C Suite – individuals that will not contribute – added cost. Need to make sure they are bringing something to table tactically / functionally. Usually can do without.

Most of the time, you don’t need another founder unless there is a technical domain your company must have knowledge around. I.E. a leader from biotech is probably needed to build a solution for that highly regulated industry.

Right now, what your company needs is someone who will add to the business and not take away from it.

2.     Sales Development Representatives – Need to give them more of the pie / involvement

I’ve already spoken to this so I won’t harp on this point more. If you want to hire talented individuals, you need to give them a larger piece of the pie. If you are a hiring a fresh college grad to do cold outreach for you, be prepared to invest a lot of time in them.

3.     Product Manager – High cost, little value add

I cringe every time I see a product manager job posting at a recently funded startup. What are you doing!?!?

Let’s take a step back and think about what a product manager does. They focus on a specific component of your software (or hardware) service and grow usage / revenue for that product. All too often, this means when other aspects of the business aren’t doing well the product manager will throw up their hands and say “that’s out of scope”. That’s why I think every company needs to shift away from the curse of the product manager. Especially in early stages. You want someone who is willing to do identify obstacles for the business and resolve them. Generally this means a software engineers, not a product manager.

Do what is right for your business, not what you need to do to attract talent.

4.     Customer Success / Support – handle this yourself until you have huge volume. You need to understand customer challenges

I’ve seen small startups hire a CS manager before, as a “temporary” solution for support needs but all too often this becomes a permanent process. Especially because automating CS workflows takes different skills than operating them. If your product has support needs, it is essential that you automate as much of that process as possible so that you don’t need to invest resources in those workflows. This can lead to inflated customer expectations and even higher costs around delivering support, setting you up for failure on both ends.

5.     Program / Project Managers – These sorts of hires are much more valuable when your company has scaled a bit and needs help with organization.

While I do think building these professionals deliver great value – at a 10 person company, everyone should be doing their own project and program management.

Other Fractional Startup Hires

1.     Fractional CFO

Finance and staying within budget is important, but for a small company there usually isn’t enough work for a full-time employee. Consulting services are highly recommended here.

2.     Fractional Recruiter

For your initial hires, you as the founder should be the lead recruiter. However, it does make sense to look for help when you need to scale quickly. Given the nature of recruiting (work comes in waves), a fractional recruiter is ideal for small companies.

Is there a hire I missed? Am I wrong about the value add of some of these roles? Let me know your thoughts and thanks for reading!