Starting a High Tech Business: No Cold Hires

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I'm starting a new business called Kynetx. As I go through some of the things I do, I'm planning to blog them. The whole series will be here. This is the twenty-first installment. You may find my efforts instructive. Or you may know a better way--if so, please let me know!

In the past two weeks Kynetx has doubled in size. There's lots to do and the resources to make it happen, so getting more people became a priority. Getting the right people became the most important thing Steve and I could do for the long term health of the company.

I've been in lots of hiring situations before--at iMall we grew from three people to over 125 in a little over 16 months. I've learned a few things. The most important being that mistakes in hiring can cause untold grief later on down the road. You definitely want to get this right the first time--iterating to a solution is too expensive.

I'm in firm agreement with Joel Spolsky on what constitutes getting it right: hire people who are "smart and get things done". That's not easy; the good people aren't usually out looking for jobs. They've already got jobs where they're respected and well compensated because they're "smart and get things done."

One good rule of thumb for getting good employees is "no cold hires." Four out of the five people we hired this past week are good friends who Steve and I have worked with in multiple ventures in the past. The fifth was someone who had worked closely with another key member of the team in mutliple ventures. We know these people well: we know their personality, we know their strengths, and we know their weaknesses. And...they know ours. Most importantly, we know they're "smart and get things done."

Clearly, the more you grow, the harder it is to only hire people you personally know, but, as was the case in our fifth hire, you can tap other members of the team you trust for referrals. And regardless of the source, the owners of a small business ought to be involved in every hiring decision and involve the rest of the team in the decision. The wrong person can be organizational poison and the smaller you are the less tolerance you have to weather bad hiring decisions.

Your personal network of people may not be very deep. That's a place where being older and having worked at more places gives an entrepreneur a definite advantage. Still, you can work on your network and get to know good people. There's an old saying that goes: the best time to plant a tree is 20 years ago; the second best time is right now.

One of the most valuable aspects of warm hires is that you can hit the ground running and get up to speed much more quickly because you have less of the "storming and norming" phases team building. These folks come predisposed to fit in your culture. At iMall, we did a lot of cold hires and the results were mixed. Most of them were pretty good people from a technical point of view, but some didn't fit the culture and that caused a lot of problems.

I'm sure there will reach a point where we are forced to make hiring decisions about people we have little background with, but I will forestall that day as long as possible. Good hiring is easier when you follow the simple rule: no cold hires.