As you approach $50m, $60m, $100m ARR
You can hire folks that always worked at Big Companies
You'll need them
— Jason ✨BeKind✨ Lemkin #ДобісаПутіна (@jasonlk) January 5, 2022
It’s easy to say “only hire people with start-up experience.” It’s also very tempting to hire folks that have worked at the partners, in the ecosystem that you work in, and at the companies you aspire to be like.
And at some point, you have to scale. To scale, you do need some folks that have been there. Not everyone can be doing it for the first time.
So when are you ready? When can you that risk on a Big Company hire? That seemingly great sales leader, marketer, etc. from Twilio? From Box? From Datadog?
I offer up a 4 point test to know if you are ready:
Roughly, you are ready to hire folks with no start-up experience at all once you:
- have a proven onboarding program
- have documented systems and processes
- have a second layer of management
- have a brand
These are table stakes for BigCo folks to thrive in a start-up. That, and enough capital to run. BigCo folks, especially VPs, cost most. Not just in salary, but because they hire more folks under them.
Let’s break it down a bit.
#1. Is your onboarding good enough? It’s terrible at most start-ups. How do you guarantee a new hire hits the ground running in her first two weeks? If you’ve never worked at a great BigCo, you may not even know what this is. But the best BigCos really onboard their hires well. You learn how things work, what resources can help you, what the cadence is, who to talk to, and often, who your mentor is. BigCo folks cannot learn by osmosis.
#2. Are your systems and processes well documented? They almost never are at a startup. This will profoundly confuse BigCo folks, who need documented processes and systems in sales, in engineering, in product releases, etc. And you want these systems and processes. You will sell better, and ship better features once you have them. It’s just, they are rarely there before you hire your first true VPs.
Thinking of a joining a startup for the first time?
A quick guide on training and onboarding:
1-10 Employees: Nonexistent
11-20 Employees: Terrible
20-40 Employees: Some
If worried, Then join something larger
— Jason ✨BeKind✨ Lemkin #ДобісаПутіна (@jasonlk) May 6, 2022
#3. Do you have two layers of management yet? If you only have VPs, you probably aren’t ready to hire BigCo folks yet. VPs without a layer of Directors or something similar under them just don’t have the time to train and teach. That’s the Director of Sales’ job in many cases, at a practical level. Together with the head of sales operations (do you even have one of those?). Without that extra layer of management, they may never learn the product, the sales motions. They may never learn the secret sauce.
#4. Do you have a brand? This is subtle but important. Sales and marketing and feature priorities are tough at Big Companies, too. But they are different. When you have a brand, you are generally the default choice already, or at least one of 2. Your real competition is often budget, and time. The question is often Why Now once you have a brand. Before you have a brand, the question is generally very different. Before you have a brand, the question is Can This Crazy New Vendor Solve My Acute Problem Better Than a Brand? There so little in common here. BigCo folks know the Brand playbook. How to leverage it, how to compete with folks with lesser brands, how to sell trust in that brand. But that’s what you need before you have a brand.
Once you are at $20m+ ARR, have a layer of good VPs, and enough cash in the bank, you’re ready to hire BigCo folks. Earlier can work, too. But if you hire them too much earlier, make sure you can at least meet this 4-part test.
(note: an updated SaaStr Classic post)