Venture capitalists deciding whether to invest in early-stage businesses will tell you that there are three things that they look for: people, people and people. It’s a slightly trite saying, but my experience says there’s wisdom in this approach.
I’ve recently joined the board of a financial services company that has gone from start-up to a multi-billion pound valuation in the lifetime of its founders. In fact, it’s the only FTSE 100 company to achieve this entirely by organic growth. It’s an amazing story and there are lots of lessons it could teach. A major part of the success has been down to one of the key early employees working alongside the founders.
In a similar way, when I started my own company, SellerDeck, we went from start-up to full listing on the London Stock Exchange in less than five years. The first recruit started working for us while the business was still in my house and was absolutely critical. He later became a director and has now gone on to be highly successful at other companies.
And again, SellerDeck’s biggest customer success story started out in a front room and grew to sales of £23m in a handful of years. Sure enough, their first employee went on to become the operations director and was a major driving force for the business during its development.
When you are starting a company, you have limited resources and husbanding them carefully is critical. It may seem difficult to be choosy when you are recruiting your first one or two staff, but it’s an important discipline. In fact, it’s up there with choosing the right business partner. If you get it right, it can be the first step on the road to huge success. If you get it wrong – it could be the end. Put more effort into your early recruitment than on any other issue. Believe me, the venture capitalists have got it right.