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September 29, 2020
The Keys to Scaling Talent As You Grow
  • Sonya Brown
    Sonya Brown
  • Hannah Kim
    Hannah Kim
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The moment at which a small business starts to scale is both daunting and exciting. The leadership team might have spent years planning to be a $20M or $100M+ business. Once that future is on the horizon and the company’s steady trajectory begins to accelerate, leaders are faced with a number of questions such as: How does this affect the product roadmap? What does this mean for our success metrics? These and a thousand other questions raise their head. 

One of the biggest challenges for a business that is beginning to grow is scaling talent. As every leader knows, a company is only as good as its people. Scaling is a positive moment, but it can feel unstable. What are the keys to scaling talent effectively, and hiring in a way that complements – and further accelerates – company growth?

To analyze the challenge of scaling talent as you grow, we sat down with founders from three NVP portfolio companies: SENREVE, Junk King, and YipitData. The insights of these founders – coupled with our own team’s experience on the growth equity side of the business, led us to four key principles:

Hire to delegate

“One word: Delegate,” says Jim Moran, Co-Founder at YipitData. “When you’re a founder and your company is starting to scale, you shouldn’t do anything twice, or do the same thing day in and day out. You should define the role and find someone to do that job better than you will. This was very important for us at YipitData.”

Moran’s experience is illuminating. In the early years of a company, everyone involved wears lots of hats, especially the founder. There are only a handful of employees, so each person takes on many responsibilities. However, as you start to scale, there comes a moment when hiring for domain experience can pay dividends. As the company starts to scale, the smart thing is to quickly hire, and properly train and delegate the tasks that were previously being carried out by people who perhaps lacked deep domain expertise.

“This is absolutely critical,” says Coral Chung, Founder and CEO at SENREVE. “When the company is small, there are more smart generalists around the table that add tremendous value. But at some point, specialization becomes really important for the next level of scale. At a certain inflection point, the company is growing more quickly than any smart generalist can learn. The biggest factor that often slows down the company is a leader’s inability to let go of wearing too many hats.”

Michael Andreacchi, CEO at Junk King, echoes Chung’s sentiment: “New talent brings additional brainstorming power to team meetings and concept sessions that can lead to additional development. With additional staff, you can accomplish many initiatives, rather than focus on one to the finish.”

Focus on scrappy young talent

As you grow, you’ll have the increased ability to hire – but this doesn’t mean that resources are infinite. You need to think very carefully about the profile of the person you bring in. Make sure that they are going to offer maximum ROI, and be the right fit for the scaling phase.

In our experience, scrappy young hires can produce excellent results. With this profile of hire, you typically get someone who is eager, willing to learn, and in possession of a very strong work ethic.

This approach works well at YipitData, where, as Moran explains, young hires “can learn a technology skillset – the basics of programming and data analytics. They can get a sense of what it could be like to start their own company one day. Young people are often looking to set up an ambitious career, and thrive when they know that this is a good place to learn.” Moran finds that take-home exercises during the interview process are a powerful way of uncovering the very best of the young talent available.

Of course, hiring younger talent isn’t a magic bullet. As Andreacchi says, “Scrappy young hires can be hit or miss. The reality is you need to embrace turnover with this type of hire until you find the right individual. However, when you get it right, you typically get an extremely loyal and dedicated employee; someone who is not afraid of change or challenge, and may bring all-new, out-of-the-box thinking to the organization.”

Additionally, given the current working landscape, remote work is becoming the norm. Younger hires are generally more adept at and comfortable with this. Moreover, in a remote world, younger hires can be brought in from all over the country, not just in your particular geography, expanding reach and in some cases leveraging lower-cost living areas. 

Finally, younger hires tend to be more open-minded and experimental in ways that experienced talent isn’t. “We love young talent,” says Chung, “because in many ways SENREVE is doing things that are disruptive to traditional retail or traditional luxury. So naturally, they bring fresh ideas that are very authentic to our brand.”

Consider fractional hires and fractional expertise

All the experience, without the cost burden of a full-time salary. Fractional hires can be a wonderful way to skillfully scale talent as you start to grow. Not only are fractional hires less of a drain on resources – sometimes, a bit of part-time expertise is still all that you actually need, for the time being.

For example, at SENREVE, Mark Chou was brought in as Head of Growth, but in a part-time role. This helped the company remain cost-conscious, while also unlocking industry-leading experience. As Chung explains, “We have done this type of hiring from the start, because it’s very flexible and budget-conscious. We’ve actually had several consultants convert to full-time, because their life circumstances changed and they loved the SENREVE, people, brand, culture and product.”

Fractional hiring has proved to be a similar success at Junk King, as Andreacchi explains, “Contract or consultation work can be very valuable when the brand does not have the ability to hire full-time due to salary/benefit constraints. This can help provide the expert advice required to help move a brand forward in a certain department, without the brand having to bear the brunt of the full expense. If lucky, the contractor or consultant has an opportunity to influence the department and help mentor/manage the existing team to more successful performance, having long-term positive effects on the organization.”

Don’t be afraid of bigger hires

“I think the business gives signs when it’s ready for bigger hires,” says Chung, drawing on her experience at SENREVE. “For example, one sign is when these bigger hires start reaching out inbound. I would say: don’t resist when that happens! I have been eagerly keeping an open mind in terms of having a lot of conversations to explore.”

The open mind that Chung talks about is key. We’ve seen that as the company starts to scale, founders are receptive to more peripheral hires, such as a content writer or a part-time Business Development Representative. But bigger hires – a Head of Sales, a CFO, or a CMO – they get wary about. 

However, remember: If a hire doesn’t pay for itself, you can always change tack. If after six to twelve months, things aren’t working, we always advise founders to look at other options. Hires aren’t for life. It can be upsetting when you make bigger hires that don’t succeed in the way you had envisioned, but if you develop a framework and trust the process, then you will save yourself from disappointment. 

“You must be confident that the position will bring more value than the cost of the salary,” says Andreacchi. “From my experience at Junk King and elsewhere, once you make the decision on the first employee, the next three or four are much easier, because you have seen the benefit and realized the impact on the ability to successfully scale the brand. Never look at overall salary; simply look at the monthly payroll to evaluate if the brand can manage the monthly outlay. When you talk in big numbers versus the per-month responsibility, it seems more manageable. And remember: If the bigger hire brings in a level of communication that allows the founder to bounce ideas, to think out loud, to listen to others’ work and life experience, it actually allows the founder to expand their own ideas and direction.”

At YipitData, bigger hires have been important, but Moran doesn’t sugarcoat the challenge: “For the bigger level hires… it’s very difficult. It’s just extremely hard to hire well for a new senior level role (Norwest was a huge help for us with this). It requires founder-level focus through every part of the process. Before you start recruiting, go speak to great people in that role in other companies – you’re not trying to recruit them; you just want to get advice and a sense of what ‘great’ is in that role. Don’t try to hire someone who is world-class in every dimension; you need to be willing to compromise on the skills you don’t need.”

Hiring during a period of growth can be challenging. If you’re at a stage where you’re scaling quickly and need advice, recommendations, or lessons learned, we can help. Norwest’s in-house talent team can be a great resource. They have helped our portfolio companies place many strategic and C-level hires at scaling companies across a range of verticals. Reach out and we can discuss your hiring needs.

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