One of the core challenges/skills needed when building a startup, scaleup, or any other organization is the ability to hire the right people. Equally important is the ability to avoid hiring the wrong people. It sounds like the same thing, but it’s really not.

Hear me out. In most organizations you’ll have a normal distribution of talent visualized by the bell curve. Some will be in the top 10 % - those are the “right” people, some in the bottom 10 %, those would be the “wrong” people. The majority would be in the middle. Note: when using terms like “right” or “wrong,” I mean in this specific context, in this specific organization, and in a specific role. Apart from being humans with value etc., even within the same organization, there might be a specific role or context where someone would be a great hire - and other roles where they would not. Think of someone who doesn’t excel in a sales role, but might be great in customer success.

When building an organization, we focus on hiring the right people—people who are top performers and can support our growth by producing code, excelling in product, supporting our commercial growth, or leading teams. They play a huge role in creating a successful organization, whether that is defined by sustainable, bootstrapped growth or a classic funding-fueled startup journey. Hiring the right people is fundamental in terms of surviving as a company.

It sounds easy, but it’s not. Even when you’re certain that you’re hiring someone in the top 10%, a lot can go wrong. The most common reasons are:

• You did indeed hire someone very talented, but they’re just not the right fit for this role
• You did indeed hire someone very talented for the role as you imagined it, but parameters changed (pivot, market constraints, lack of funding, velocity, etc.), and they didn’t perform in the “new” format.
• Hired for skill, fired for attitude is unfortunately still very true. Sometimes lack of cultural fit or a non-compatible attitude magically appears, even though you made a meticulous interview process, including references.
• Even after a thorough process and a detailed job description, both parties fundamentally see the role differently - you feel that you were explicit about the role being hands-on, i.e. doing sales calls or coding, but the person you hired believes that a VP should not be hands-on.
• They don’t have the trust of the team.
• Or a variety of other reasons.

Unfortunately, you really don’t see the above in real time—it just kind of materializes over time, which makes it a lot harder to deal with. When the problems start to arise after 6, 9, or 12 months, they have usually been present for a while, and what you’re seeing are not the actual problems but the consequences of those problems.

Consequences often come in the form of:

• Team members are leaving. They don’t want to get caught up in a difficult discussion about the issues, so you don’t notice that something is off when the first person leaves. After employees number 4, 5, or 6 leaves, you start to see the pattern.
• Commercial success is not present. The pipeline looks good at first glance, but you notice that deals are being carried over from month to month and quarter to quarter and never really materializing. Deals are not happening, and you start to realize that they probably never will happen.
• Poor architectural decisions begin to affect the team and their performance. That complete rewrite that would make everything better? Surprise - it’s making everything a lot worse.
• And don’t get me started on the problems linked to poor marketing decisions, poor financial/FPA decisions, etc.

Startups used to have a bit more slack since you could often just raise more funding. That is not the case anymore. That means that any of the consequences above would not just be a minor bump in the road but more of a life-threatening situation.

When things start to go wrong, as a founder or leader, you have to make an incredibly important distinction:

• Is this a situation where you hired someone who is not in the overperforming 10% group but is “just” delivering a slightly under/or around average performance? In that case, add it to the long list of problems to fix. It’s a problem, but not necessarily the most important problem to solve right now.
• Or did you actually hire someone in the bottom 10 percent? If that is the case, you have to react fast.

Not resolving big problems usually leads to big consequences, eventually killing you. Hiring people who impact the business in a (very) negative way is one of those big problems.