One of my original claims to investors was "we operate efficiently without any need for an office". At some point having an office stopped looking like a liability and started looking like an asset. An office makes communication easier. Best practices get shared. Policies are easier to keep consistent. At 7 employees, the cost of the office is very small relative to the cost of payroll,but the benefit to each employee is very large. So go ahead and get those swanky new digs.
The other big change was that with the 7th employee, it becomes very clear that the founder needs to stop doing 100% of direct effort and start putting a lot more effort towards managing employees. This is a big stumbling block for most entrepreneurs. We want to do everything ourselves. What a waste. Entrepreneurs have lots of drive and understanding of the business. This resource shouldn't be squandered on one individuals work, but shared across the organization.
At this point in a company's life cycle, there are 2 key tools for hiring:
Tool #4. Don't hire just good people, hire good startup people. A good startup employee has a few key attributes. Look for people that have a lot of adaptability. They take initiative. They are good with ambiguity and change. Look for these kinds of things in the interview process. Give a preference to candidates that follow up and ask (the right) questions.
Tool #5. Hire deliberately. Never, ever, ever hire the wrong person because of pressure to fill a role quickly. It is always, without exception, under every case imaginable better to wait on the right person than to rush into a bad decision on hiring. In the end, your company is only as strong as its people.
I so agree with you about hiring the wrong person. The wrong employee costs in so many ways, most of which are not obvious until they have left and you get the right person.
Posted by: Kaye Dennan | January 18, 2010 at 12:02 AM