Family, friends, and fools. Those are what investors and startup founders call ‘the FFF’. When bootstrapping a company, entrepreneurs usually have to turn every penny. As long as their service or product is completely unknown and has no traction with customers yet, it is hard to get funded by VC money. And so they turn to family, friends and fools to extend their runway.
It took us, founders of Lempea and Rain, a while to realise that the FFF was also the right way to go about our initial recruitment.
Early in my career, as I started working for a subsidiary of a large international corporation, I was genuinely impressed by the diversity of the team. My colleagues came from all kinds of backgrounds with degrees in theology, law, paper engineering, mathematics, telecom engineering, physics – you name it.
Big Co diversity
We’re talking several decades ago here. Even though all of us were Finnish nationals and only about one-third of us were women, our team was considered very diverse for its time.
I quickly learned what a richness diversity is. Our different points of view helped us solve many challenging business cases. And so I went through corporate life, convinced that this was the only way to achieve great results.
But guess what happened when I entered my startup career with two Big Co colleagues? It turned out that for a micro-sized startup, diversity was not the way to go.
Although I had never founded a company before, I trusted that my experience in the large enterprise would help to guide us in recruitment and building the team.
False positive CVs
The first thing I noticed was that in startup land, CVs are not at all the key to successful recruitment. In a large organisation, you have the HR department and external agencies who scan and test candidates. Even if a ‘false positive’ gets accidentally hired, there are many ways to retrain, reallocate or replace people. And in many cases you can tap into a pool of internal applicants – people already known within the organization.
With a startup, the risk of hiring the wrong candidate based on their CV and an interview is much greater. And when that happens, you’ve lost considerable time and money, and you’re back to square one.
Next to being completely occupied with office management, procurement, brand positioning, service and product development, selling to customers, pitching to investors, accounting, invoicing and what not, we were also flooded with phone calls, emails, LinkedIn and chat messages from people selling people – notably developers.
The FFF of recruiting
At some point we worked with a headhunting agency. A partner company of ours had had good results with them and we got a great guy who quickly picked up on our way of thinking and managed to find some great candidates. However, as soon as this headhunter was replaced, the whole relationship collapsed. I guess we had been lucky as long as it lasted.
So, what do you do?
To save time and trouble, I found there is no other way than to go for the FFF. What is true in early funding, – that you need to approach everyone you can trust, everyone you know from earlier business cases, and everyone crazy enough to jump on board of your unknown project -, is also true in recruiting. That’s how we pulled in our first ten colleagues.
For sure, diversity is an essential competitive asset in the long run. But when you’re just starting out, you need to establish a solid foundation based on trust, in the fastest and most cost-effective way.
This is at the same time an investment in harmony and common values. In our case, we look for substance experts who are curious grown-ups, team players, and who keep their promises.
You need those trusted early team members with common values as part of your foundation. Only once you’ve put your winning team in place, you can start working on diversity.