Starting your first business is like falling in love for the first time: You are as excited as you are clueless. There are many magical moments when you are building your first business, including hiring your first employee.

It’s magical because it means your business is growing. It’s also nerve-wracking, because even if you’ve been in charge of hiring before at another company, this is your company and your money. Hire the wrong person and it’s you directly who loses out.

For those of you at that magical moment of your entrepreneurial life, here are few tips about hiring your first employee:

1. Spend a lot of time on that first hire

Hiring the wrong first employee can kill a startup. Y Combinator president Sam Altman says a mediocre hire (someone who doesn’t believe–heart and soul–in what you’re doing) can poison the culture of the company.

He points out that Airbnb spent five months recruiting and interviewing for their first employee because the founders wanted someone who believed in the company’s potential as much as they did and who wouldn’t bolt at the first sign of a crisis.

Altman suggests spending about 25 percent of your time on that first hire. That might sound high, but if you don’t, it could cost you your whole operation.

2. Hire your first employee for who they are, not who you think they can be

You are likely to interview candidates whom you feel aren’t exactly what you’re looking for, but who you like as people. It’s tempting to tell yourself these candidates will “grow into the position.”

Don’t take that chance when you’re hiring your first employee.

You have to be excited to work with them, and they should be as close to perfect for the position as possible. Use their past accomplishments to judge this. Do not use your gut instinct on whether they’ll blossom into something they haven’t proven to be in the past.

Focus your questions on past accomplishments, previous work experience, and what excites and motivates them, rather than subjective questions to gauge their potential.

3. Remember you’re building your corporate culture

When hiring your first employee, you are also building a process and a set of rules for hiring future employees. Before you interview anyone, draw up a list of traits that you want your company culture to convey and only hire someone who will help the company convey these traits.

Your first hire will be 50 percent, then 33 percent, and then 25 percent of your workforce as you grow. Anyone who plays that big a role in your workforce needs to “bleed” the corporate culture of your company.

They should be as invested in its success as you are because they become part of the founding process.

4. Care for your first employee and invest appropriately

You must invest in your first employee. Provide the training and resources for them to become the best version of themselves.

If you hire and lead right, that person is going to stay for a long time. You’re not just hiring someone to fill a position, you’re investing in someone’s future as an investment in your company’s future.

5. Trust and empower your first employee

If your company is to grow, and have a scalable structure and thrive when you are not around, then it has to have ’empowerment’ in its DNA.

Your first employee relationship is the best time to build that. If you’ve hired right, you should have no problem giving your first employee more responsibility as the company grows.

6. Don’t get squeamish if you have to drop the axe

If you find out your first hire is not going to work out, you need to act fast. It’s not just for you and the company, it’s also for that employee.

They deserve to be in a job that suits them and where they can grow as an employee and a person. Don’t hold off on letting them go if you see things aren’t working out.

You can never spend too much time and effort on hiring your first employee because they will set the tone for the rest of your hires. It will be worth doing all those annoying interviews and sifting through the truth and stretched truth of everyone’s resume to find the right person.

The very survival of your startup depends on it.

The post 6 Lessons on Hiring a First Employee That You Shouldn’t Have to Learn the Hard Way (But I Did) appeared first on Cross Ocean Ventures.

And then it happens for real … the little company is thrust into the big unknown via takeover by a larger company, which relegates it to being just a business unit of the larger company.

So why do big companies acquire small ones? Usually there are three reasons:

Market: A small company has existing revenue/sales in a market that the big company wants to enter.

Technology: The small company has a technological product or innovation the larger company can use to build value on.

Talent (a.k.a acqui-hire): Small, innovative upstarts attract great brain power. Usually, creative, self confident talent strives in these small companies, so this becomes a major reason why big companies want to acquire small ones. Facebook, Twitter, Yahoo, Google, Apple, LinkedIn and Airbnb have all acquired smaller companies and immediately shut them down just so they could acquire the engineers behind them.

Encouraging “Intraprenuership”

If acquiring talent is the case, the big company acquiring the smaller one has to be extra careful not to alienate or scare away this talent. Usually, the best of the talent are the ones who would normally leave first after the small company is acquired.

Here are few tips for you to keep the atmosphere in the company ‘intra-prenuer” and ‘intra-ventor” enough for the acquired talent to stay and for the big company to benefit from it.

1. ‘Sell’ Your Company to the Newly Acquired One

Your big company might be buying the small company, but now it is time for the big company to ‘sell’ their ideas, future and hope to the newly acquired one. So, from day one there needs to be a narrative, and a key message and that narrative and message has to be repeated. Channel your inner politician and stick to this one message that you need to repeat. For example, if your key message is one of “hope and trust’, you should keep saying it at every opportunity and make it a big flag for the new management to keep waving.

2. Recruit the Influencers

Early on, find the influencers in the small company you are acquiring. They don’t have to be the best salespeople or the top innovators/programmers. The influencers you’re after are usually the ones that others make circles around at company parties. These influencers have a large network of friends in the company. A good tip to find them is to literally watch team members interact during office parties.

Once you find influencers (at least one from each key department), then recruit them. This is done best one-on-one. Tell them about how your big company is now planning on utilizing this new unit and how you trust them, how you are open and supportive. But, before you preach to these influencers (these people are usually socially astute so don’t think you can manipulate them), you have to be open, honest and a great listener and you have to be willing to listen to them. Being the social hubs they are, they are likely to know the general concerns that are cropping up among the employees of the smaller company.

3. Strive for an Initial Winning Project

There is nothing like momentum. So, once your new recruits are on board and trying to make this new business unit work and produce, it is critical that you find a good project that will produce results. Many people in small startups are drawn to them because of the creativity they can employ in their jobs there. They tend to be afraid of losing that ability to be creative in a larger company.  

So, don’t hesitate to spend time and resources to develop a great project to start the momentum by showing everyone that your big company is a good company to work for in terms of creativity. The success is very important and failure is very costly when it comes to this first project, so even though you want to be quick, you need to be confident, too. And it is also important that the success will be owned primarily by the the newly acquired business’ team. Don’t let the new big company people hijack the praise as a result of this success. That would just defeat the purpose.

4. Create the Process that is Right for the Company Culture

Each company is different and once your big company acquires that small one, the company culture will inevitably change. Study the culture of this smaller business, learn the dynamics and, if possible, after the first success (see above), come up with the right structure to foster more ‘intra-prenuership and intra-ventorship’. It has to fit, so don’t do this prematurely. Wait until you truly understand the culture, see what works, and recruit people from the old team to help you design this new process. The center of this process would be how we can recognize and reward the ones that produce with creativity and execution. On top of that, it should have a low level of bureaucracy to get it going and execute on things.

As a last word, I want to add this; respect the small company you are acquiring. Respect the people that work there. They might not have big company experience and might come across naive to you, but don’t judge. Try to understand and respect them. Listen well, and don’t think you can manipulate them. Your goal is not to trick them to foster ‘intra-prenuership’, your goal is to convince and empower them to keep creating and producing. Keep that in mind and you will be fine.

[Photo courtesy of Nguyen Hung Vu on Flickr]

The post 7 Important Tips to Hire the People That Will Actually Make a Difference appeared first on Cross Ocean Ventures.