Featured Article

Building the right team for a billion-dollar startup

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

Comment

illustration of unicorns
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. 

More TechCrunch

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

15 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

17 hours ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise

X, formerly Twitter, turned TweetDeck into X Pro and pushed it behind a paywall. But there is a new column-based social media tool in town, and it’s from Instagram Threads.…

Meta Threads is testing pinned columns on the web, similar to the old TweetDeck

As part of 2024’s Accessibility Awareness Day, Google is showing off some updates to Android that should be useful to folks with mobility or vision impairments. Project Gameface allows gamers…

Google expands hands-free and eyes-free interfaces on Android