How to build your very first team 
in your startup

Sara Green Brodersen was 16 when she had her first brush with entrepreneurship. She has been a two-time co-founder and a two-time CEO as well. Recently, she took on the role of Chief of Staff at Add to Event, UK's #1 marketplace for event services.

After her first official entrepreneurial stint at Deemly, she co-founded Canaree, a SaaS no-code platform for accurate financial modeling. She also wore the CEO hat at Canaree. Overall, she has over eight years of experience leading and growing B2B SaaS businesses. She is actively involved in the London startup and tech ecosystem and passionate about inspiring startups’ diversity.

As part of the Freshteam Leadership Series, we caught up with her and discussed her entrepreneurial journey and the lessons she has drawn from both her stints on what goes into building your initial team in your startup. She talks about some of the challenges she has faced and how she has dealt with those. Let’s dive in!

Co-founder relationships
 

Sara met her first set of co-founders through previous work. Not all co-founders stayed on, and the team had to go through a couple of iterations—either they left on their own or were let go because the management decided that it was the best for the company.

The CTO who co-founded Deemly with her stayed on till the end, and Sara says it clicked well between the two of them probably because they had worked together for several years before starting up on their own.

She met her second set of co-founders at an accelerator program in which her first company participated. The initial meeting led to interesting conversations, and eventually, they formed great relationships. Interestingly, Sara joined Canaree as a consultant for a few months to see if there was a match before she took on the role of a co-founder and CEO in the startup.

How do you let go of co-founders (and what you should do to avoid that situation):

There’s no easy way out for this. It would be best if you had those conversations, no matter how challenging, awkward or delicate the situation is. 

Sara says the most challenging thing in doing the iterations concerning letting a couple of co-founders go was related to performance. And the team realized it was because they had not aligned on what they expected everyone to deliver. It’s imperative to plan this down to the number of work hours per week, showing up at meetings, and delivering on deadlines. The team realized there was a mismatch between what the majority of the team and what one of the co-founders wanted.

In hindsight, Sara feels they should have made the decision earlier than they did. The cost of delaying this: the impact of the co-founder spread to everyone else in the team. The others started feeling demotivated and felt unfairly treated because they were putting in a lot more.

The company did emerge stronger after the co-founder was let go.

Criteria for hiring the first set of team members

Sara set off by adding a technical person to her teams in both the startups she has headed. Subsequently, she hired product and designer folks, as is the norm for any tech company. The kind of people she looks for while hiring members for the first team are:

It’s a lot of effort for an early-stage company to have a hiring structure in place. The main pillars for hiring in the initial stages are having long conversations and assessing the coachability of the potential candidate. But when you scale up your startup, Sara says she evaluates the potential candidates against the set of values they have as a team. She also involves the existing team members in helping the co-founders to assess if the potential candidate is a good fit for their startup culture.

Culture

Culture is something that exists even if you are not conscious about it or work on it. That’s because it consists of the people who are already in your team. You can change that or impact it to a great degree by hiring the right kind of people and setting up processes. You can do this both formally and informally.

The CEO must invest time and effort into culture-building in the initial stages - more than you might think necessary, at least until the startup has the resources to hire a Head of People. Startups should also focus on building social activities or behaviors that cement who they are as a company and what they want to achieve.

One of the values that Sara has consistently held dear throughout her entrepreneurial journey is transparency. An example of how she put that into practice is: she would share the presentation slides discussed in board meetings with the team. 

She says this helps them know the startup’s strategic direction and shareholders’ thoughts and compare and translate that to where they are as a team currently. Sara says this has been quite impactful on her teams and has helped get them to move in the right direction.

It’s also important for founders and CEOs of startups to know what their values are. Hopefully, the management or the co-founders share a similar set of values. If you’re ten people, it’s great to set your values as a team but if you’re 2-3 people, it may not be the most vital activity to spend time on. You need to work on culture constantly in any case.

Aligning a team to march towards the larger goal

Sara believes it is essential to involve the whole team in the hiring process. Being able to choose who will come on board helps create an initial connection with someone new. 

It is crucial to create a great onboarding experience for the new hires by involving all the team members in the hiring process. It’s a great idea to loop in the existing employees to help the new hire figure out their systems, assist them with the training, and introduce the startup’s planning processes. 

The two-time entrepreneur also believes in setting up processes to clearly lay out the startup vision and goals, besides tracking them to figure out what that means for the team and individual members. Sara is data-driven, and she heavily relies on data to manage people.

If you have middle managers (like the C-level employees), ensure they have the tools necessary to manage their direct reports - be it technical or soft skills.

Involving team members in the hiring process of new folks:

In the Pre-Covid days, Sara and her team used to go out for coffee or lunch to meet the potential hires, which is now replaced by online video calls. The broad rules are:

• All team members have the power of veto when it comes to hiring a new member. They need to write down the reason for saying “no,” which is anonymous. Sara says they didn’t end up using the veto power during both her stints as co-founder/CEO and that such decisions have always been unanimous.
• If anybody has any questions or doubts about a potential hire, they have open discussions to address those.
• It is essential to get everyone on board and be excited about the new folks joining in, especially in a small team.
• Sara has not been in a situation where the existing team members were divided about a potential hire. If she had found herself in that situation, she says she would have gone with the majority vote rule and what they felt worked best for the team and the company, depending on its growth stage.
• Sara equips her team members with questions they can ask the potential hires. It could be related to interpersonal skills to what kind of people they are to “this is the problem we’re facing currently... how would you solve it?”. Such questions allow the team members to see how the potential hire approaches a particular problem and is like a trailer to observe how the new hire and the team interact.

Aligning team to the founders’ vision:

Sara says this might sound a bit fluffy but communication is the most critical thing founders can do to align their team to the larger vision. The management team or the co-founders need to think about how they communicate, where they communicate, who needs to know what, where information is accessible, and so on.

Sara says if people know what’s going on, they make astute decisions enabling them to do their jobs better. 

Objectives and key results (OKRs) are an excellent way to manage the high-level vision and priorities and convert them into actionable activities on the ground. Sara says this tool has worked well for her teams in both her startups.

Letting go of an early team member:

This happens very often in a lot of startups. Sara says the key is to hire slowly and fire fast. It’s good to take time to get people on board but if it’s not working out, you can’t keep hoping and praying that it will. 

Giving people a chance to improve is always a good idea because sometimes, it could just be a mismatch in understanding what the management expects from a particular member. In the instances where Sara has been in a similar situation, she has tried to find the root cause of why they’re not performing well. Many things could have gone wrong: maybe they don’t feel motivated enough, perhaps they’re stretched beyond their skills, or the co-founder has not been clear on what they expect from the team member.

The first step is to talk to them and not be critical. Something like, “Hey, I noticed that the quality of your work is not as it usually is… Are you happy? Is everything fine at home? Is there anything that I can do to help?”. The main thing is to build trust and have the team members open up to talk about their issues.

The responses for such questions in Sara’s case have varied from - “Oh, I didn’t know you think like that. Let me do it better” to “My dad passed away last week and I didn’t feel like talking about it, and I didn’t tell you.” 

Sara says in most cases, she and her co-founders have been able to course correct the situation and keep them on board. In other cases, despite having had multiple conversations, it just doesn’t work out. It would be best if you gave them notice. Something like, “I need you to improve in one month or we’ll have to let you go.”

It’s not rocket science. Communication is critical. Understand that bad performance is usually a symptom of something else that’s going on. Hiring and firing people is expensive. So, if there’s a way to work things out, that’s always better.

It makes sense to have a probation period for the new hires. In both the companies where Sara was the CEO, the probation period was three months. This makes sense for both the startup and the new employee as they both have a way out.

Sara says she meets many founders who talk about that one employee who has not been performing well, and six months later, they are still talking about that person. It doesn’t have to take that long. As soon as you see a situation, address it and have that conversation. Make a plan with the employee that’s not six months long but check back in two weeks to see how things are progressing.

If nothing has improved, maybe give them another chance. You might sort of have to provide them with a warning depending on how bad the situation is and how valuable the employee is. If even that doesn’t work, you know you have to have that uncomfortable conversation with the employee.