Matt is the founder and CEO of Return Path, a company that provides e-mail deliverability services, and he has been a TechStars mentor since 2009.
In software and service companies, people are everything. It's not just that they come first. They come first, second, and third. The earlier stage the company, the more critical each incremental new person is. Think about it—if you have 10 people in your company and you are hiring a new person, you are adding 9 percent to your workforce in one shot! You're also hiring someone who will very likely have an impact on how the DNA of your organization develops since it's still embryonic in the first few years, even if it is dominated by strong-willed founders.
When a startup decides it needs to hire a new person, it wants to hire them right this second. And when it has hired the person, the startup is loath to let them go if they aren't working out because they think they need them so badly. This creates two related temptations to avoid as you build out your team.
Temptation 1: Hiring too quickly. Just having a warm body in that open job that you need filled immediately doesn't get the job done. When you are hiring such a big percentage of your workforce, you have to have a super-high success rate. At Return Path, we have sometimes left critical jobs open for months as we cycle through candidates ...