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Building the right team for a billion-dollar startup

Bain Capital Ventures’ Sarah Smith on hiring, diversity and creating culture


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Image Credits: Bryce Durbin/TechCrunch

From building out Facebook’s first office in Austin to putting together most of Quora’s team, Bain Capital Ventures managing director Sarah Smith has done a bit of everything when it comes to hiring. At TechCrunch Early Stage, she spoke about how to ensure the critical early hires are the right ones to grow a business. As an investor at Bain Capital Ventures, Smith has a broad view into the problems that companies face as they search for the right candidate to spur organizational success.

In our conversation, Smith touched on a number of issues such as who to hire and when, when to fire, and how to ensure diversity from the earliest days.

What to consider when you first think about hiring

When a company is making its first hires — and then evolving into a bigger organization — the processes and needs may change, but the culture should be consistent from the beginning, according to Smith. From there, an emphasis on good early managers is critical.

I would really encourage you to take some time to think about what kind of company you want to make first before you go out and start interviewing people. So that really is going to be about understanding and defining your culture. And then the second thing I’d be thinking about when you’re scaling from, you know, five people up to, you know, 50 and beyond is that managers really are the key to your success as a company. It’s hard to overstate how important managers, great managers, are to the success of your company.

So we’ll talk a little bit about how to think about that, as there’s a lot of questions around helping people grow into management for the first time. You, as a founder, might be managing people for the first time, so how to think about setting up the company for success.

(Timestamp: 4:15)

How do you build culture in the new remote environment?

As the world moves to office-optional or flexible working environments, the emphasis on culture and maintaining a strong company identity can be difficult. Smith has some concrete suggestions on how to overcome that.

I think for no matter what company you are, no matter what size you are, having the entire company get together for an all-hands at least once a week while you’re remote is a really good way to make everyone feel like one team. A lot of companies have done this as they’ve shifted to remote or even started from remote. And, you know, that’s a chance to fill everybody in on what’s going on across the company, what shipped last week, celebrate successes and talk about things that aren’t going as well as they could.

… It’s a heartbeat, that you start with a company on a weekly basis by doing some kind of company all-hands. And then I think having a, you know, a CEO or founding team Q&A, even at like 10 or 15 people, it can be really helpful just have a half-hour every week that people can be on on Zoom or whatever platform you’re using. Ask questions, just get a chance to call out any concerns really early and not let things fester. And that’s what can happen when you can’t see each other in person.

(Timestamp: 10:46)

The importance of hiring managers early in the process

One thing that Smith emphasized repeatedly was the importance of hiring good managers and hiring them or people with their skill sets relatively early. It’s another element of creating the team that, if unattended, could lead to problems down the road.

So you as a founder will certainly be managing pretty much from day one the first hire, and you will eventually hire more managers. And the reason this is so critical to scaling for growth is that every manager, you know, typically has five to six direct reports. So by the time you have five managers in the company, they’re probably managing about 30 people. That’s enormous impact that each of those people have on on the enormity of your company.

So it is critical that you find people who have strong instincts around people management, empathy, and really building that emotional connection, especially in a remote world. And the reason that’s so critical is, a number of studies have shown this — the most famous one probably is Google … who could actually really understand the impact of this and they studied 180 teams. They found that psychological safety was the number one driver of team effectiveness. And managers sit at the intersection of creating psychological safety, which is making people feel that they’re not going to be humiliated; they’re not going to be punished for speaking up with ideas, questions, concerns, or mistakes.

(Timestamp: 12:23)

Make diversity a priority

Diverse teams make for diverse thinking, which makes for better decision-making and better products, says Smith. It’s vital for startups to consider bringing on qualified people with different points of view as early in the process as possible, she said.

No matter what, it’s important that from day one [that] you have an eye on how to build an inclusive culture, where in an ideal world, even that first person you’re bringing onto the team could walk in and feel fairly welcomed. And again, back to the psychological safety piece, where you really want people to bring their best selves and they bring their perspectives and their ideas. And, you know, I think it’s pretty common that a team might grow to like four or five from within the network, including the founders, I think once you get to like number six, if you don’t have some type of gender or racial diversity yet, like, it’s gonna start to get really tough.

Because if you imagine, like, you know, I’m actually the first female partner at Bain. I walked in, and there’s eight male partners. I could do that, because it’s not the first time I’ve been the only one in the room. But it’s definitely something where you think about the experience of that person walking in and being one of the others once you start getting above five people, six people, seven people… now it starts to feel, it’s just an extra burden that they carry. And then what a lot of the best practice actually is to try to hire two or three people who maybe are diverse. And then that way, it’s not just on the shoulders of one person to sort of be the diverse voice in the room, but it actually feels spread out a little bit, and, you know, doesn’t rest on any one person. So that’s pretty critical.

Here’s the full transcript of the session.

You can also check out other sessions from TechCrunch Early Stage here. 

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